1899 Holdings, LLC v. 1899 Limited Liability Company

Filing

UNPUBLISHED AUTHORED OPINION filed. Originating case number: 1:12-cv-00297-CCB Copies to all parties and the district court/agency. [999342718].. [13-1166]

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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 13-1166

1899 HOLDINGS, LLC; STANLEY KEYSER; KEYSER DEVELOPMENT
CORPORATION;
KEYSCO
REALTY
CORPORATION;
QUEEN
ANNE
BELVEDERE
REVITALIZATION
LIMITED
PARTNERSHIP;
NINETEEN/TWENTY−ONE WEST PRESTON, LLC; IMDBOSS, LLC,
Plaintiffs – Appellants,
v.
1899 LIMITED LIABILITY COMPANY; SMALL DEAL FUND, LP; 1899
SPECIAL MEMBER, LLC; RALEIGH CONSULTANTS, LLC,
Defendants – Appellees.

Appeal from the United States District Court for the District of
Maryland, at Baltimore.
Catherine C. Blake, District Judge.
(1:12-cv-00297-CCB)

Argued:

January 28, 2014

Decided:

April 24, 2014

Before WILKINSON, KEENAN, and DIAZ, Circuit Judges.

Affirmed by unpublished opinion. Judge Diaz wrote the opinion,
in which Judge Wilkinson and Judge Keenan joined.

ARGUED: Meighan Griffin Burton, WRIGHT, CONSTABLE & SKEEN, LLP,
Baltimore, Maryland, for Appellants.
Paul S. Caiola, GALLAGHER
EVELIUS & JONES LLP, Baltimore, Maryland, for Appellees.
ON
BRIEF: Michael I. Gordon, Robert Hesselbacher, WRIGHT, CONSTABLE
& SKEEN, LLP, Baltimore, Maryland, for Appellants.
Brian T.

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Tucker, Steven G. Metzger, GALLAGHER
Baltimore, Maryland, for Appellees.

EVELIUS

&

JONES

LLP,

Unpublished opinions are not binding precedent in this circuit.

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DIAZ, Circuit Judge:
In this case, we consider whether Appellants, Plaintiffs
below, have adequately alleged claims for breach of contract and
other state-law causes of action against several of their coparticipants in a project to restore and redevelop Baltimore’s
Northern District Police Station.

Finding that Plaintiffs had

failed to state any viable claims, the district court dismissed
their complaint.

For the reasons that follow, we affirm.

I.
A.
In 2001, Stanley Keyser and Wendy Blair formed a Maryland
limited

liability

company

called

1899

LLC

(the

“Company”).

Initially, 1899 LLC had two members: Keyser Development Corp.,
controlled by Keyser, and W.L. Blair Development LLC, controlled
by Blair.
purchase

Through the Company, Keyser and Blair planned to
Baltimore’s

Northern

District

convert it into a commercial development.

Police

Station

and

In doing so, they

sought to obtain certain state and federal tax credits available
for projects involving the restoration of historic buildings.
The

project

quickly

ran

into

obstacles.

Environmental

hazards, among other difficulties, increased development costs
beyond

what

Keyser

and

Blair

had

anticipated.

To

ensure

adequate financing in the face of these problems, Keyser, along
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with

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several

entities

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controlled

by

or

affiliated

with

him

(collectively, the “Keyser entities”), 1 began contributing funds
to 1899 LLC.

These investments continued for several years, and

by 2008, Keyser and the Keyser entities had contributed at least
$3 million.
In

2005,

to

secure

still

additional

financing

for

the

project, Keyser negotiated an agreement with John Bowman, Jr.,
the president of an investment firm called Tax Credit Capital,
LLC.

Keyser and Bowman eventually agreed that Small Deal Fund

L.P.--an

entity

affiliated

with

Bowman--would

invest

$1.9

million in the project in exchange for 99.9% of the operating
profits, as well as the tax credits the project would generate.
To facilitate this investment, Small Deal and 1899 Holdings, LLC
(one of the Keyser entities) executed an Operating Agreement,
dated January 31, 2006, through which the two firms became the
sole members of 1899 LLC.
A

number

relevant
“Managing

to

of

this

Member”

the

The two previous members withdrew.
Operating

appeal.
and

Small

First,
Deal

Agreement’s
it
as

provisions

designated
“Investor

Holdings
Member.”

are
as
In

essence, Holdings was responsible for day-to-day management of

1

These
entities
included
Plaintiffs-Appellants
1899
Holdings, LLC; Keyser Development Corp.; Keysco Realty Corp.;
Queen Anne Belvedere Revitalization L.P.; and Nineteen/TwentyOne West Preston, LLC.

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the project while Small Deal agreed to provide capital.
agreement,

however,

“[i]f

the

available

debt,

Per the

equity,

rental

income or other proceeds [were] insufficient” to complete the
project, Holdings agreed to “pay such deficiencies.”
Relatedly,

Holdings

warranted

that

it

would

J.A. 152.
“cause

the

completion of the . . . Project substantially in accordance with
the

plans

and

specifications

. . . free

and

mechanics’, materialmen’s or similar liens.”

Id.

clear

of

all

The Operating Agreement also specified that any financing
Holdings provided to 1899 LLC would “be treated as a Capital
Contribution,” rather than as a loan.

See id.

This policy had

one exception: Holdings was permitted “to make short term loans
to the Company prior to Construction Completion and such loans
[would] not be treated as a Capital Contribution” as long as
they were repaid within 120 days (or 180 days upon substantial
completion of the project).
executed

the

Operating

Id. at 152-53.

Agreement,

At the time they

Holdings

and

Small

Deal

warranted that there were no “loans or advances . . . from the
Managing

Member

or

its

Affiliates

to

the

Company

. . .

outstanding for more than 120 days” (the “Warranty Clause”).
Id. at 149.
The Operating Agreement gave Small Deal the power to remove
Holdings

as

Managing

Member

under

certain

circumstances.

Specifically, as relevant here, Small Deal could remove Holdings
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if

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it

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violated

(and

failed

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to

cure

within

thirty

days)

any

provision of the Operating Agreement, provided that its conduct
had a “material adverse effect on the Company or any of its
Members.”

Id. at 162.

An “uncured violation” of Holdings’ duty

to “provide funds” would be “deemed to have a material adverse
effect.”
In

Id. (emphasis added).
addition

to

a

standard

merger

clause,

Agreement included one other relevant provision.
rendered

in

connection

with

the

Company’s

the

Operating

“For services

development,”

a

developer, IMDBOSS, LLC, would receive a “Developer Fee . . . in
an amount equal to 20% of appropriate development costs.”
at 101, 160.

Id.

This fee, estimated to be $500,000, would be

“deemed earned in its entirety as of the date of Construction
Completion.”

Id.

at

160.

The

fee

was

to

be

paid

“from

available debt and equity proceeds of the Company, to the extent
such proceeds [were] not required for other Company purposes.”
Id.

The Operating Agreement provided that the “remainder” of

the fee could be “deferred” at 6% interest, but it was “in all
events” to “be [paid] by December 31, 2014.” 2
After

Holdings

and

Small

Deal

Id.

executed

the

Operating

Agreement, Holdings and the other Keyser entities contributed

2

The Amendment to the Operating Agreement, discussed below,
would later change this date to December 31, 2017.

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additional
duty

to

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funding
cover

to

any

the

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project,

shortfalls.

consistent

with

Nevertheless,

Holdings’

the

project

continued to struggle financially.
On August 12, 2008, allegedly “[a]t the insistence of Small
Deal,” Holdings executed an agreement on behalf of 1899 LLC with
Raleigh Consultants, LLC.

Id. at 30.

Raleigh agreed to serve

as the “day-to-day construction manager” of the project and to
“perform cost data processing.”

Id.

According to Holdings,

after this agreement, it was “effectively removed” from managing
the

project.

repeatedly

Id.

Specifically,

requested

access

to

Holdings

financial

alleges

records

that

and

it

other

information, but Small Deal and Raleigh “refused to respond to
those requests.”
In
financial

Id.

September

2008,

difficulties,

to

address

Holdings

and

Amendment to the Operating Agreement.
Amendment
Maryland

provided
Historic

that
Tax

Small

Deal

Credit

project’s

Small

Deal

ongoing

executed

an

Among other changes, the
and

Fund,

additional capital to the project.

the

another

L.P.,

entity,

would

the

contribute

Other than with respect to

the enumerated changes, however, the Amendment stated that “the
Operating Agreement is ratified and confirmed in all respects”
(the “Ratification Clause”).
Shortly

after

Holdings

Id. at 203.
and

Small

Deal

executed

the

Amendment, Small Deal accused Holdings of breaching its funding
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obligation
Holdings,

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the

under
dated

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Agreement.

Operating

November

13,

2008,

Small

In
Deal

a

letter

to

threatened

to

remove Holdings as Managing Member, noting the existence of “no
fewer

than

Company.”

17

liens

Id. at 206.

and

lawsuits

directly

affecting

the

In response, Holdings acknowledged that

it was “unable to cause the Company to timely pay operating
expenses, or payments on the Company’s loans.”

Id. at 55.

But,

citing various forms of alleged misconduct by Small Deal and
Raleigh, Holdings denied that Small Deal had authority to remove
it as Managing Member.

Undeterred, Small Deal formally removed

Holdings on December 15.
As provided by the Operating Agreement, 1899 Special Member
LLC--an entity appointed by Small Deal--automatically replaced
Holdings.

Special Member acquired Holdings’ interest “for an

amount equal to the greater of (i) $100 or (ii) [Holdings’]
Capital Account balance . . . on the date of removal.”
163.

Id. at

The Agreement made this sum payable to Holdings “upon the

earlier of fifteen years from the date of removal or the sale of
all . . . of the Company’s assets.”

Id.

Sometime after Holdings’ removal, 1899 LLC completed the
project.
B.
In December 2011, Holdings, Keyser, the Keyser entities,
and

IMDBOSS

sued

1899

LLC,

Small
8

Deal,

Special

Member,

and

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Raleigh in Maryland state court, asserting a variety of statelaw claims.

Defendants removed the action to the U.S. District

Court

the

for

District

of

Maryland,

invoking

diversity

jurisdiction.
In their amended complaint, Plaintiffs first alleged that,
prior to Holdings’ removal as Managing Member, Bowman--on behalf
of

Small

Deal--orally

“agreed

with

Stanley

Keyser

that

the

outlays that had been made and would be made by [Keyser and the
Keyser entities] . . . would be considered loans to 1899 LLC and
not

capital

contributions.”

complaint

explained,

completion

of

the

the

J.A.

funds

project.

The

32-33.

were

due

complaint

As

loans,

immediately
alleged

the
upon

that,

by

failing to repay the loans, 1899 LLC breached the terms of the
oral agreement.

In the alternative, the complaint sought return

of the funds via claims for unjust enrichment.
The amended complaint also alleged that 1899 LLC, Small
Deal, and Special Member breached the terms of the Operating
Agreement by wrongfully removing Holdings as Managing Member.
According

to

Holding,

the

removal

was

not

authorized

by

the

Agreement and violated Defendants’ fiduciary duties and duty of
good faith.
breached

the

Additionally, the complaint alleged that Defendants
Operating

IMDBOSS’s developer fee.

Agreement

by

wrongfully

withholding

Finally, it requested that Defendants

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provide “a full accounting of the Project’s capital accounts,
income, disbursements, distributions and finances.”

Id. at 39.

Defendants filed a motion to dismiss, which the district
court granted.

See 1899 Holdings, LLC v. 1889 Ltd. Liab. Co.,

No. CCB-12-297, 2013 WL 142303 (D. Md. Jan. 8, 2013).

The court

first held that the parol evidence rule barred Plaintiffs’ loan
claims.

According

conceded

that

contributions
Amendment.
the

the
as

to

the

court,

alleged

loans

took

oral
place

Plaintiffs’
agreement

prior

to

counsel

had

treat

the

to

execution

of

the

Moreover, the court determined that the existence of

loans

was

Agreement,

as

inconsistent
ratified

by

with
the

the

terms

Amendment.

of

the

Because

Operating
the

parol

evidence rule bars evidence of a prior agreement that conflicts
with the terms of a written instrument, the court held that the
loan-related contract allegations failed to state a plausible
claim.

Relatedly, the court dismissed the alternative unjust

enrichment claims.
where

an

express

It explained that such claims cannot lie
contract--here,

the

Operating

Agreement

Amendment--“covers the subject matter of the claim.”
Second,
accounting,

with
the

respect

district

to

court

Plaintiffs’
noted

that

“a

and

Id. at *4.

claim
demand

for
for

an
an

accounting is generally not an independent cause of action in
Maryland, but rather a remedy to another cause of action.”

Id.

Having already concluded that the loan claims were not viable,
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determined

that

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the

claim

for

an

accounting

also

failed.
Third, the court held that Holdings had failed to plausibly
allege a breach of contract based on its removal as Managing
Member.

Taking

judicial

notice

of

state

court

documents

indicating the entry of judgments on liens against the project,
the court determined that Holdings had violated its duty “to
cause completion of the project free from liens.”
Accordingly,

the

court

held

that

“removal

of

Id. at *5.
Holdings

as

Managing Member complied with . . . the Operating Agreement.”
Id.
Finally,

the

court

dismissed

developer fee without prejudice.

IMDBOSS’s

claim

for

the

The court read the relevant

provisions as establishing that the fee was not due until 2017,
and

thus

determined

that

IMDBOSS’s

claim

for

payment

was

premature.
Plaintiffs timely noted this appeal.

II.
Plaintiffs

argue

that

the

district

court

erred

in

dismissing each of the claims in their amended complaint, an
issue that we review de novo.
505, 508 (4th Cir. 2013).

See Cioca v. Rumsfeld, 720 F.3d

“‘To survive a motion to dismiss, a

complaint must contain sufficient factual matter, accepted as
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true,

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to

Filed: 04/24/2014

state

face.’”

Id.

a

claim

(quoting

to

Pg: 12 of 25

relief

Ashcroft

that

v.

is

Iqbal,

plausible
556

its

662,

U.S.

on

678

(2009)); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007).

In

assessing

the

sufficiency

of

a

plaintiff’s

allegations, the court may “consider documents attached to the
complaint, as well as those attached to the motion to dismiss,
so long as they are integral to the complaint and authentic.”
Philips v. Pitt Cnty. Mem’l Hosp., 572 F.3d 176, 180 (4th Cir.
2009) (internal citation omitted).

Additionally, the court “may

consider matters of public record such as documents from prior
state court proceedings.”

Walker v. Kelly, 589 F.3d 127, 139

(4th Cir. 2009).
In

a

contract

dispute,

“the

construction

of

ambiguous

contract provisions is a factual determination that precludes
dismissal on a motion for failure to state a claim.”

Martin

Marietta Corp. v. Int’l Telecomms. Satellite Org., 991 F.2d 94,
97 (4th Cir. 1992).

Under Maryland law, “a written contract is

ambiguous if, when read by a reasonably prudent person, it is
susceptible of more than one meaning.”

Calomiris v. Woods, 727

A.2d 358, 363 (Md. 1999).
A.
We

first

dismissing

consider

Plaintiffs’

evidence rule.

whether
loan

the

claims

district
pursuant

court
to

erred
the

in

parol

Because we have diversity jurisdiction over this
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case, we apply Maryland’s substantive contract law.

See Francis

v. Allstate Ins. Co., 709 F.3d 362, 369 (4th Cir. 2013), cert.
denied,

134

S.

Ct.

986

(2014)

(“A

federal

court

sitting

in

diversity is required to apply the substantive law of the forum
state, including its choice-of-law rules.”); Lab. Corp. of Am.
v. Hood, 911 A.2d 841, 848 (Md. 2006) (noting that Maryland
courts “generally apply the law of the place where the contract
was made”).
Under

Maryland

law,

the

parol

evidence

rule

“bars

the

admission of prior or contemporaneous agreements or negotiations
to vary or contradict a written contractual term.”
727 A.2d at 361.
agreements,”

it

Calomiris,

Because “a written agreement discharges prior
“render[s]

legally

inoperative

communications

and negotiations leading up to the written contract.”
361-62

(internal

quotation

marks

omitted).

Id. at

Plaintiffs

argue

that the rule does not apply to their loan claims because: (1)
the alleged oral agreement to treat their contributions as loans
occurred after execution of the written Amendment; and (2) the
oral agreement is not inconsistent with the terms of either the
Operating

Agreement

or

the

Amendment.

We

reject

both

contentions.
1.
With

respect

to

the

timing

issue,

Plaintiffs

point

to

language in their amended complaint stating that Small Deal, “on
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numerous occasions until the end of 2008, . . . acknowledged,
agreed to, and acquiesced in the treatment of the advances as
loans.”

J.A. 33 (emphasis added).

Because the Amendment was

executed in September 2008, they argue, the loan agreement is
not a “prior” or “contemporaneous” agreement susceptible to the
parol evidence rule.

See Calomiris, 727 A.2d at 361.

At the hearing on Defendants’ motion to dismiss, however,
the district court remarked that the conversations relating to
the alleged loan agreement took place “sometime in the spring
and summer of 2008, after the [Operating Agreement], but prior
to

the

[Amendment].”

J.A.

279.

In

response

to

this

observation, Plaintiffs’ counsel stated that the conversations
“were certainly after [the Operating Agreement], yes, and before
the

[Amendment].”

claims,

the

admission.

Id.

district

In
court

its

order

treated

dismissing
this

Plaintiffs’

statement

as

an

In the court’s view, Plaintiffs had “concede[d] that

the alleged agreement . . . preceded the written Amendment.”
1899 Holdings, 2013 WL 142303, at *4.
“[A] lawyer’s statements may constitute a binding admission
of

a

party”

if

unambiguous.’”

the

statements

are

“‘deliberate,

clear,

and

Fraternal Order of Police Lodge No. 89 v. Prince

George’s Cnty., 608 F.3d 183, 190 (4th Cir. 2010) (quoting Meyer
v. Berkshire Life Ins. Co., 372 F.3d 261, 265 n.2 (4th Cir.
2004)).

When

the

district

court
14

treats

a

statement

as

an

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admission,

we

discretion.
On

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review

determination

only

for

abuse

of

See Meyer, 372 F.3d at 264.

appeal,

statement

that

Pg: 15 of 25

did

Plaintiffs

not

carry

attributed to it.

contend

the

that

significance

their

the

counsel’s

district

court

They argue that “counsel was referring [only]

to the initial agreement to treat the advances as loans,” not
any further conversation confirming that agreement.
at 26.

Reply Br.

We find this distinction unpersuasive.

In the colloquy, the court referred to “conversations,” in
the

plural

form,

indicating

it

had

in

mind

all

of

the

discussions regarding the loans, not just the initial agreement.
In

response,

counsel

neither

disputed

the

court’s

characterization of the conversations, nor made the distinction
on which Plaintiffs now rely.

That counsel did not do so is

telling: as the court’s observation was clearly directed to the
issue

of

claims,

whether

the

counsel’s

parol

failure

evidence

to

mention

rule

barred

the

Plaintiffs’

distinction

indicates he had no such distinction in mind.

likely

Moreover, counsel

himself employed a plural pronoun, and he phrased his statement
in definitive terms.

See J.A. 279 (“They [the conversations]

were certainly . . . before the [Amendment].” (emphasis added)).
Accordingly,
sufficiently

we

clear

interpreted it.

find

and

that

both
the

that

the

district

statement
court

was

correctly

We thus hold that the court’s treatment of
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counsel’s

Filed: 04/24/2014

statement

discretion.

as

an

Pg: 16 of 25

admission

was

not

an

abuse

of

Because Plaintiffs are bound by the admission on

appeal, see, e.g., In re McNallen, 62 F.3d 619, 625 (4th Cir.
1995),

we

reject

their

argument

that

the

loan

agreement

postdated the written Amendment.
2.
Plaintiffs also contend that the alleged loan agreement is
consistent with the Operating Agreement and Amendment.

Because

it does not “vary” or “contradict” the terms of the written
instruments, they argue, the parol evidence rule does not apply.
See Calomiris, 727 A.2d at 361.
The district court found that the oral loan agreement was
inconsistent

with

the

terms

of

the

writings

based

on

the

interaction between two clauses therein: the Warranty Clause in
the

Operating

Amendment.

Agreement

and

the

Ratification

Clause

in

According to the district court, by ratifying the

Operating

Agreement

agreed--as

of

the

in

date

the
of

Amendment,

the

Holdings

Amendment--that

effectively

there

were

“outstanding loans or advances” from Holdings to 1899 LLC.
1899

Holdings,

regarding

the

the

2013
oral

WL

142303,

loan

at

*3.

agreement,

Holdings’
the

court

no
See

allegation
held,

thus

“directly contradicts the plain language of the later written
Operating Agreement and its Amendment.”

16

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Plaintiffs

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assert

that

Pg: 17 of 25

the

district

court

erred

selectively quoting the language of the Warranty Clause.

by
As

they point out, the full clause states that “[t]here are no
outstanding loans or advances (excluding, for this purpose, any
loans pursuant to Section 6.11 and development advances with
respect to the Project) . . . which are outstanding for more
than 120 days.”

See J.A. 149 (emphasis added).

Based on this

language, Plaintiffs contend that the existence of the loans is
in fact consistent with the Warranty Clause in two potential
ways: first, if the loans constitute “development advances” (a
term

that

neither

the

Amendment

nor

the

Operating

Agreement

defines); and second, if they were outstanding for fewer than
120 days at the time the parties executed the Amendment. 3
Even if the alleged loans are potentially consistent with
the Warranty Clause, however, they are nevertheless inconsistent
with other provisions of the Operating Agreement.

The Operating

Agreement explicitly provides that any payments made by Holdings
to “acquire and complete . . . the project” will “be treated as
a Capital Contribution to the Company.” 4

Id. at 152.

The only

3

Plaintiffs do not argue that the alleged loans were “loans
pursuant to Section 6.11.”
4

Plaintiffs concede that “the amounts advanced by Keyser
and his entities were, in substance, monies paid into the
Project by Holdings.” See Appellants’ Br. at 38.

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exception to this rule is for “short-term loans,” which avoid
classification as capital contributions only if they are repaid
“within 120 days of being made (or, within 180 days of being
made

upon

substantial

Project).”

completion

See id. at 152-53.

of

construction

of

the

Plaintiffs do not dispute that

the contributions in question were for the purpose of funding
and

completing

the

project.

contributions

were

not

Consequently,

the

Operating

ratified)

in

Nor

fact

unambiguously

do

they

repaid

within

Agreement

renders

dispute
even

(which

the

that
180

the

the

days.

Amendment

payments

capital

contributions. 5
In
merger

any

clause.

agreements
parties

event,

. . .

and

among them.”
provision

the
That

clause

constitute

supersede

any

Id. at 176.

after

Operating

the

date

Agreement

provides

the

prior

entire

also

that

the

agreement

agreements

or

contains

a

“written
among

the

understandings

Because the Amendment ratified this
of

the

alleged

oral

agreement,

it

leaves no room for treating the payments as loans.

5

This is no less true of the so-called “Orlo loan,” which
the amended complaint describes as “a $500,000 loan that Stanley
Keyser personally obtained from Orlo Holding NY, LLC.” J.A. 33
(emphasis added). Although the Amendment notes the existence of
the loan, it imposes no express duty on 1899 LLC to repay it.
If, as the complaint alleges, Keyser paid the proceeds of the
Orlo loan into the project, the Operating Agreement renders that
payment a capital contribution.

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In sum, the oral communications on which Plaintiffs rely
contradict the parties’ subsequent written agreement.
parol

evidence

rule

thus

bars

introduction

As the

of

those

communications as evidence, the district court did not err in
dismissing Plaintiffs’ loan-related contract claims.
3.
From this conclusion, it follows that the district court
also correctly dismissed Plaintiffs’ unjust enrichment claims.
As the district court recognized, Maryland law does not permit a
claim for unjust enrichment where an express contract governs.
See Cnty. Comm’rs v. J. Roland Dashiell & Sons, Inc., 747 A.2d
600, 607-08 (Md. 2000).
Appeals

has

explained,

“This rule,” the Maryland Court of
“holds

the

contract

parties

to

their

agreement and prevents a party who made a bad business decision
from asking the court to restore his expectations.”

Id. at 610

(internal quotation marks omitted).
Here, the parties agreed--by way of the Operating Agreement
and Amendment--that Plaintiffs’ payments to 1899 LLC would be
capital contributions rather than loans.

That agreement, as the

only one that is both “valid and enforceable,” thus “precludes
recovery in quasi contract [i.e., unjust enrichment] for events
arising out of the same subject matter.”

See MacDraw, Inc. v.

CIT Group Equip. Fin., Inc., 157 F.3d 956, 964 (2d Cir. 1998)
(per curiam) (alteration in original) (internal quotation marks
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omitted) (quoted in Cnty. Comm’rs, 747 A.2d at 607).

For this

reason, Plaintiffs’ unjust enrichment claims fail. 6
B.
Next, we address Holdings’ claim for breach of contract
based on its removal as Managing Member of 1899 LLC.

Holdings

makes two arguments for why its removal was not authorized by
the Operating Agreement.

First, it argues that the Operating

Agreement required it only to complete the project “free and
clear”

of

completion
Second,
Operating

liens,
did

such

not

Holdings

that

the

existence

violate

its

obligations.

argues

Agreement,

that

that

even

if

violation

arguments

misapprehend

which its removal was justified.
not

the

existence

of

the

liens

liens
See

prior
J.A.

it

did

might

not

have

to

152.

violate

“material adverse effect on the Company.”
Holdings’

of

had

the
a

the

See id. at 162.
contractual

hook

on

Under the Agreement, it was
themselves

that

justified

Holdings’ removal, but rather what the liens signified: that
Holdings was not meeting its contractual obligation to cover
shortfalls in funding.

See id. at 152 (“If the available . . .

6

In County Commissioners, the Maryland Court of Appeals
recognized a variety of exceptions to the general rule.
These
include situations involving “evidence of fraud or bad faith,”
where “there has been a breach . . . or a mutual re[s]cission of
the contract, when re[s]cission is warranted, or when the
express contract does not fully address a subject matter.” 747
A.2d at 609. None of the exceptions apply here.

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proceeds are insufficient to . . . acquire and complete the
rehabilitation of the Project and satisfy all other obligations
. . . the Managing Member shall be responsible for and obligated
to pay such deficiencies . . . .”).

To this point, we note that

the

record

state

court

documents

in

the

(of

which

we

take

judicial notice) reveal not merely liens against the project,
but actual judgments on those liens.

Simply put, the existence

of such judgments is inconsistent with Holdings having fulfilled
its contractual duty. 7
that

Holdings’

“deemed

to

In turn, the Operating Agreement provides

failure

have

a

to

fulfill

material

its

adverse

funding

obligation

effect.”

Id.

is

at

162

language

and

(emphasis added).
We

perceive

no

ambiguity

in

the

contract

conclude that Holdings’ removal by Small Deal was authorized by
the

terms

removal

of

of

the

Operating

Holdings

as

Agreement.

Managing

Member

See
based

id.
on

(permitting
an

uncured

violation of the Operating Agreement with a material adverse
effect on 1899 LLC).

Holdings has not pleaded a plausible claim

for breach. 8

7

Holdings’ December 11, 2008, letter to Small Deal
essentially admitted as much.
In the letter, Holdings stated
that it was “unable to cause the Company to timely pay operating
expenses, or [make] payments on the Company’s loans.” J.A. 55.
8

Holdings’ vague and conclusory allegations regarding bad
faith and violations of fiduciary duties do not alter our
(Continued)
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C.
We next consider IMDBOSS’s claim for breach of contract
based on Defendants’ failure to pay it the development fee.

We

agree with the district court that this claim is premature.
Under the terms of the Operating Agreement and Amendment,
1899 LLC is to pay IMDBOSS a “developer fee” in an “amount equal
to 20% of appropriate development costs.”

J.A. 200.

The terms

of the fee’s payment are as follows:
The Developer Fee shall be deemed earned in its
entirety as of the date of Construction Completion and
otherwise in accordance with the terms of the
Development Agreement.
The Developer shall be paid
such portion of the Developer Fee from available debt
and equity proceeds of the Company, to the extent such
proceeds are not required for other Company purposes.
The remainder of the Developer Fee shall constitute a
deferred
fee
bearing
interest
at
6%
compounded
annually, payable . . . to the Developer from Cash
Flow and/or Net Proceeds[,] . . . but in all events
the Deferred Developer Fee shall be [paid] by December
31, 2017 . . . .
Id. at 200-01.

conclusion.
See J.A. 40.
We fail to comprehend how Small
Deal’s decision to exercise a right expressly provided to it by
the contract could constitute either bad faith or a breach of
fiduciary duty, especially in light of Holdings’ own breach.
See, e.g., Big Yank Corp. v. Liberty Mut. Fire Ins. Co., 125
F.3d 308, 313 (6th Cir. 1997) (noting that “a party’s acting
according to the express terms of a contract cannot be
considered a breach of the duties of good faith and fair
dealing” and collecting cases to that effect).

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Focusing
“shall

be

on

deemed

Construction

provision’s

earned

in

Completion,”

currently due.
IMDBOSS

this

Pg: 23 of 25

its

argues,

only

by

entirety

IMDBOSS

See id. at 200.

pronouncement

that

the

fee

of

the

date

of

that

the

fee

is

as

asserts

Defendants can avoid paying it,

demonstrating

that

“there

available debt and equity proceeds to pay the fee.”
Br. at 36.

are

not

Appellants’

As Defendants have not done so, IMDBOSS contends

that 1899 LLC’s failure to pay constitutes a breach of contract.
We are not persuaded by IMDBOSS’s proposed construction.
Although the fee was “earned” at the time that construction of
the

project

was

completed,

simultaneously became due.

it

does

not

follow

that

the

fee

With respect to payment of the fee,

the Amendment states only that it “shall be [paid] by December
31, 2017.”
LLC

with

J.A. 201.
discretion

Until that date, the contract vests 1899
to

decide

that

“required for other Company purposes.”

the

relevant

funds

Id. at 200.

are

While an

allegation that the company is withholding payment of the fee in
bad

faith

could

perhaps

overcome

the

discretion

this

clause

confers on 1899 LLC, IMDBOSS makes no such allegation in the
amended complaint.

For that matter, the complaint does not even

assert that there are “available debt and equity proceeds” to
pay the fee.

See id.

Accordingly, we conclude that IMDBOSS has

not adequately alleged that it is yet entitled to the fee.

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district court thus did not err in dismissing IMDBOSS’s claim
without prejudice.
D.
Finally,

we

hold

that

the

district

court

dismissed Plaintiffs’ claim for an accounting.

correctly

“In Maryland, a

claim for an accounting is available when one party is under
obligation to pay money to another based on facts and records
that are known and kept exclusively by the party to whom the
obligation is owed, or where there is a fiduciary relationship
among the parties.”

Polek v. J.P. Morgan Chase Bank, N.A., 36

A.3d 399, 418 (Md. 2012) (internal quotation marks omitted).
This case presents neither circumstance.
First, because Plaintiffs have otherwise failed to plead
viable claims for breach of contract or unjust enrichment, we
discern no basis for concluding that any of the defendants are
under

a

current

plaintiffs.

“obligation

Although

to

Plaintiffs’

pay

money”

capital

to

any

of

contributions

the
will

ultimately be subject to repayment, such repayment is not due
until “the earlier of fifteen years from the date of removal or
the sale of all or substantially all of the Company’s assets,”
neither of which has yet occurred.
Second,

and

for

similar

Plaintiffs a fiduciary duty.

J.A. 163.

reasons,

Defendants

do

not

owe

Regardless of whether members of a

Maryland LLC generally owe each other fiduciary duties (an issue
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on which the parties disagree), neither Holdings nor any other
plaintiff is currently a member of 1899 LLC.

Per the Operating

Agreement, Special Member simply owes Holdings a fixed sum of
money, payable upon one of the events noted above.

See id.

(“[T]he Special Member or its designee shall automatically . . .
acquire

the

Interest

of

the

removed

Managing

Member

for

an

amount equal to the greater of (i) $100 or (ii) the Capital
Account balance of the removed Managing Member on the date of
removal.”).

In other words, the current relationship between

Holdings and Special Member is merely that of a creditor and
debtor; Holdings has no current relationship with 1899 LLC.
Plaintiffs

therefore

have

not

support a claim for an accounting.

alleged

circumstances

to

See Polek, 36 A.3d at 418

(affirming the dismissal of accounting claims on the basis that
the

contractual

fiduciary

in

relationship

nature

and

between

any

the

fiduciary

parties

was

relationship

not
that

otherwise existed had “expired long ago”).

III.
For the foregoing reasons, the judgment of the district
court is
AFFIRMED.

25