Giorgilli v. Goldstein et al
Filing
32
MEMORANDUM OPINION. Signed by Magistrate Judge Susan K. Gauvey on 2/26/14. (dass, Deputy Clerk) (c/m 2/26/14)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
JOHN AMERICO GIORGILLI,
*
Plaintiff
*
v.
*
HOWARD R. GOLDSTEIN &
LATITUDE 26 INVESTMENTS,
LLC,
*
*
SKG-13-2544
*
*
Defendants.
*
CIVIL NO.
*
*
*
*
*
*
*
*
*
*
MEMORANDUM
Now pending is Defendants’ motion to dismiss pursuant to
Fed. R. Civ. P. 12(b)(1) & (6), or, alternatively, motion for
summary judgment pursuant to Fed. R. Civ. P. 56.
Briefing
105.6.
is
No
hearing
is
necessary,
Local
Rule
For the reasons set forth herein, this Court GRANTS
Defendants’
Defendant
complete.
(ECF No. 10).
motion
Latitude
to
26
dismiss
Plaintiff’s
Investments,
LLC,
claims
GRANTS
against
Defendants’
motion to dismiss Plaintiff’s claims for punitive damages, and
GRANTS Defendants’ motion for summary judgment.
1
I.
Background1
On June 6, 2013, Plaintiff and Defendant Howard Goldstein
(“Defendant Goldstein”) entered into a contractual relationship
wherein
Defendant
Goldstein
thousand dollars ($20,000).
The
purpose
of
the
agreed
to
lend
Plaintiff
twenty
(ECF No. 2, ¶5; ECF No. 10, Ex. 1).
aforementioned
contract
was
to
provide
Plaintiff with operating capital for two startup companies, a
commercial crabbing business and a boat manufacturing business.
(ECF No. 2, ¶5).
On June 5, 2013, Defendant Goldstein wire
transferred to Plaintiff the agreed upon twenty thousand dollars
($20,000).
and
(ECF No. 10, Ex. 2).
Defendant
Goldstein
entered
On August 1, 2013, Plaintiff
into
an
additional
contract
providing for another loan of twenty thousand dollars ($20,000)
with a revolving line of credit up to fifty thousand dollars
($50,000).
(Id., Ex. 3).
The August 1, 2013, agreement stated
“[a]ny requested advances on the Line of Credit shall be honored
by [Defendant Goldstein] and paid to [Plaintiff] within Five (5)
days.”
(Id.)
Defendant Goldstein wire transferred the initial
twenty thousand dollar ($20,000) loan to Plaintiff on August 1,
2013.
(Id., Ex. 4).
1
Because, as will be discussed infra, the Court is of the opinion that
summary judgment is appropriate, the facts and the inferences to be drawn
therefrom are taken in the light most favorable to the party opposing the
motion for summary judgment, Plaintiff. Scott v. Harris, 550 U.S. 372, 378
(2007); Iko v. Shreve, 535 F.3d 225, 230 (4th Cir. 2008).
2
Thereafter, on August 8, 2013, Plaintiff sent a Notice of
Intent to Defendant Goldstein’s counsel making a written request
for an additional twenty thousand dollars ($20,000), pursuant to
the revolving line of credit in the August 1, 2013, agreement.
(ECF No. 10, Ex. 5).
Defendant Goldstein failed to transfer the
twenty thousand dollars ($20,000) to Plaintiff within the fiveday
payment
contract.
Goldstein
period
as
agreed
(ECF No. 2, ¶5).
agreed
to
pay
upon
in
the
August
1,
2013,
On September 3, 2013, Defendant
Plaintiff
thirty
thousand
dollars
($30,000) as the final draw on the line of credit unless and
until the line of credit was reduced.
Also
action
on
September
against
Defendant
Investments,
LLC,
performance,
actual
relief.
II.
3,
for
2013,
and
Plaintiff
Goldstein
breach
of
punitive
(ECF No. 10, Ex. 6).
and
filed
Defendant
contract,
damages,
the
Latitude
seeking
as
present
well
26
specific
as
other
(ECF No. 1).
Standard of Review
A. Standard for Dismissal under Rule 12(b)(1)
The burden of proving subject-matter jurisdiction is on the
Plaintiff.
Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982)
(noting challenge may be either facial, i.e., complaint fails to
allege
facts
upon
which
subject-matter
jurisdiction
can
be
based, or factual, i.e., jurisdictional allegations of complaint
3
are not true).
See also Kerns v. United States, 585 F.3d 187,
192 (4th Cir. 2009) (same); Richmond, Fredericksburg & Potomac
Ry. Co. v. U.S., 945 F.2d 765, 768 (4th Cir. 1991) (same).
the
case
district
of
a
court
factual
to
challenge,
“consider
it
is
evidence
permissible
outside
the
In
for
a
pleadings
without converting the proceeding to one for summary judgment.”
Richmond, 945 F.2d at 768 (citing Adams, 697 F.2d at 1219).
The
court should grant the 12(b)(1) motion “only if the material
jurisdictional facts are not in dispute and the moving party is
entitled to prevail as a matter of law.”
Richmond, 945 F.2d at
768.
B. Standard for Dismissal under Rule 12(b)(6)
A
complaint
must
contain
“sufficient
factual
matter,
accepted as true, to ‘state a claim to relief that is plausible
on its face.’”
(quoting
(2007)).
Bell
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
Atlantic
Corp.
v.
Twombly,
550
U.S.
544,
570
Facial plausibility exists “when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference
alleged.”
that
possibility
the
defendant
is
liable
Iqbal, 556 U.S. at 678.
of
plausible claim.
misconduct
is
not
Id. at 679.
for
the
misconduct
An inference of a mere
sufficient
to
support
a
As the Twombly opinion stated,
“Factual allegations must be enough to raise a right to relief
above the speculative level.”
550 U.S. at 555.
4
“A pleading
that offers ‘labels and conclusions’ or ‘a formulaic recitation
of the elements of a cause of action will not do.’ …
Nor does a
complaint suffice if it tenders ‘naked assertion[s]’ devoid of
‘further factual enhancement.’”
Iqbal, 556 U.S. at 678 (quoting
Twombly, 550 U.S. at 555, 557).
motion
to
dismiss
a
court
must
Although when considering a
accept
as
true
all
factual
allegations in the complaint, this principle does not apply to
legal conclusions couched as factual allegations.
Twombly, 550
U.S. at 555.
C. Standard for Summary Judgment
“The court shall grant summary judgment if the movant shows
that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Civ.
P.
56(a);
Celotex
Corp.
v.
Catrett,
477
U.S.
(1986) (citing predecessor to current Rule 56(a)).
Fed. R.
317,
322
The burden
is on the moving party to demonstrate the absence of any genuine
dispute of material fact.
144, 157 (1970).
Adickes v. S.H. Kress & Co., 398 U.S.
If sufficient evidence exists for a reasonable
jury to render a verdict in favor of the party opposing the
motion, then a genuine dispute of material fact is presented and
summary judgment should be denied.
Lobby,
Inc.,
477
U.S.
242,
248
See
(1986).
Anderson v. Liberty
However,
the
“mere
existence of a scintilla of evidence in support of the [opposing
5
party’s]
position”
summary judgment.
is
insufficient
Id. at 252.
to
defeat
a
motion
for
The facts themselves, and the
inferences to be drawn from the underlying facts, must be viewed
in the light most favorable to the opposing party, Scott v.
Harris, 550 U.S. 372, 378 (2007); Iko v. Shreve, 535 F.3d 225,
230 (4th Cir. 2008), who may not rest upon the mere allegations
or denials of his pleading but instead must, by affidavit or
other
evidentiary
showing,
set
out
specific
facts
genuine dispute for trial, Fed. R. Civ. P. 56(c)(1).
showing
a
Supporting
and opposing affidavits are to be made on personal knowledge,
contain such facts as would be admissible in evidence, and show
affirmatively the competence of the affiant to testify to the
matters stated in the affidavit.
III.
Rule 56(c)(4).
Discussion
A. Motion to Dismiss - Subject Matter Jurisdiction
Defendants
contend
that
jurisdiction over this case.
Plaintiff
asserts
this
Court
lacks
subject
matter
subject
matter
The Court disagrees.
that
this
Court
has
jurisdiction over this case pursuant to 28 U.S.C. § 1332(a).
That statute grants original jurisdiction to district courts in
“all civil actions where the matter in controversy exceeds the
sum or value of $75,000, exclusive of interests and costs, and
is
between
.
.
.
(2)
citizens
6
of
different
states.”
Id.
Defendants concede that complete diversity of citizenship exists
in this case.
that
the
(ECF No. 10, 14).
amount
in
controversy
Defendants dispute, however,
exceeds
the
sum
or
value
of
seventy five thousand dollars ($75,000), exclusive of interests
and costs.
(Id. at 14-16).
The burden of proving subject-matter jurisdiction is on the
Plaintiff.
Adams, 697 F.2d at 1219 (noting challenge may be
either facial, i.e., complaint fails to allege facts upon which
subject-matter
jurisdiction
can
be
based,
or
factual,
jurisdictional allegations of complaint are not true).
i.e.,
Here,
Defendants have raised a factual challenge to the jurisdictional
allegations
of
jurisdictional
Accordingly,
Plaintiff’s
amount
this
in
Court
complaint,
specifically,
controversy.
(ECF
may
evidence
“consider
No.
10,
the
13-14).
outside
the
pleadings without converting the proceeding to one for summary
judgment.”
1219).
Richmond, 945 F.2d at 768 (citing Adams, 697 F.2d at
Where, as here, the factual basis for the jurisdictional
amount in controversy is challenged, the party seeking to invoke
the jurisdiction of the federal courts carries the burden of
proving that it does not appear “to a legal certainty” that its
claim is for less than the jurisdictional amount.
Wiggins v. N.
Am. Equitable Life Assurance Co., 644 F.2d 1014, 1017 (4th Cir.
1981) (quoting McDonald v. Patton, 240 F.2d 424, 426 (4th Cir.
1957)).
If “it appears to a legal certainty” that the Plaintiff
7
cannot
recover
the
jurisdictional
minimum,
the
case
dismissed for want of subject matter jurisdiction.
Determining
purposes
of
the
federal
value
of
subject
the
matter
matter
in
will
be
Id.
controversy
jurisdiction
is
for
naturally
decided under federal law; yet, in a diversity of citizenship
case, federal courts must look to state law to determine the
nature and extent of the right the Plaintiff is seeking to have
enforced
or
protected.
14AA
Charles
A.
Wright,
Arthur
R.
Miller, & Edward H. Cooper, Federal Practice and Procedure §
3702, at 268-69 (4th ed. 2011).
This includes examining the
forum
the
state’s
rules
regarding
measure
of
damages,
availability of special and punitive damages, as well as a right
to attorney’s fees.
Id. at 271-73.
Sitting in diversity, this
Court is bound to apply Maryland’s rules for choice of law.
See
Klaxon
496
Co.
v.
Stentor
Electric
Mfg.
Co.,
313
U.S.
487
(1941); DiFederico v. Marriott Int’l, Inc., 714 F.3d 796, 807
(4th Cir. 2013).
On this point, Maryland law holds that the law
of the jurisdiction where the contract was made controls its
validity
and
construction
(lex
loci
contractus).
Commercial
Union Ins. Co. v. Porter, 698A2d 1167, 1199 (Md. 1997); Kramer
v. Ball’s Park Place, Inc., 535 A.2d 466, 467 (Md. 1988).
Here,
the parties agree, and the August 1, 2013, contract expressly
states, that Maryland law controls the agreement’s validity and
construction.
(ECF No. 10, 7; ECF No. 2, ¶1; ECF No. 10, Ex 3).
8
Accordingly, the Court shall look to Maryland law of contracts
to determine whether Plaintiff’s claim meets the jurisdictional
minimum amount in controversy.
First,
the
Court
finds
available to Plaintiff.
that
punitive
damages
are
not
In Maryland, punitive damages are not
available in a pure action for breach of contract, even if the
breach is malicious.
Saval v. BL Ltd., 710 F.2d 1027, 1033 (4th
Cir. 1983); Schaefer v. Miller, 587 A.2d 491, 492-93 (Md. 1991);
St. Paul at Chase Corp. v. Manufacturers Life Ins. Co., 278 A.2d
12, 33-34 (Md. 1971).
Punitive damages may only be awarded in a
breach of contract case if a “tort arises out of the contractual
relationship.”
Am. Laundry Machinery Industries v. Horan, 412
A.2d 407, 417 (Md. 1980).
arise
out
of
the
Further, where a tort does, in fact,
contractual
relationship,
actual
malice
is
required and the relationship between the tortuous conduct and
the
contract
must
be
“so
intertwined
that
one
could
not
be
viewed in isolation from the other.” Id.; General Motors Corp.
v. Piskor, 381 A.2d 16, 21 (Md. 1977).
Here,
August
1,
Plaintiff
agreement.
complaint
Defendant
2013,
within
Goldstein
agreement
the
concedes
by
failing
five-day
(ECF No. 10, 19).
alleges
injury
“[a]s
that
to
window
he
breached
disburse
funds
prescribed
by
the
to
the
Although Plaintiff’s amended
a
direct
result
of
the
defendant(s) tortuous acts in which they willfully, knowingly
9
and intentionally refused to advance the plaintiff the necessary
funds” (ECF No. 2, ¶9), Plaintiff has pled no facts constituting
“actual malice” on the part of Defendants.
“Actual Malice”
being “characterized as the performance of an act without legal
justification or excuse, but with an evil or rancorous motive
influenced by hate, the purpose being deliberately and willfully
injure the plaintiff.”
K & K Mgmt., Inc. v. Lee, 557 A.2d 965,
984 (1989) (citations omitted); Komornik v. Sparks, 629 A.2d
721, 725 (Md. 1993).
particularized
facts
Because Plaintiff has failed to plead any
showing
actual
malice,
sufficient
to
satisfy Rule 9(b), it is “a legal certainty” that Plaintiff
cannot recover punitive damages.2
Second,
Plaintiff.
attorney’s
In
Maryland,
fees
are
attorney’s
likewise
fees
are
unavailable
generally
to
only
available to a plaintiff where: (1) the parties to the contract
agree in that contract to pay attorney’s fees; (2) a statute
allows for such fees; (3) wrongful conduct of the defendant
forced the plaintiff into litigation with a third party; (4) the
plaintiff is forced to defend malicious prosecution; or (5) they
are considered as an element of a punitive damages award.
St.
Luke Evangelical Lutheran Church, Inc. v. Smith, 568 A.2d 35,
39-41 (Md. 1990) (citations omitted).
2
None of these exceptions
The Court hereby acknowledges Defendants’ Rule 12(b)(6) motion to dismiss
Plaintiff’s claims for punitive damages (ECF No. 10) and, for the foregoing
reasons, GRANTS the motion.
10
applies
in
this
case,
in
particular,
the
August
1,
2013,
agreement only provides for the right to attorney’s fees in the
event
of
a
collection
Plaintiff, default.
also
“a
legal
action
following
a
(ECF No. 10, Ex. 3).
certainty”
that
“Borrower,”
i.e.,
Accordingly, it is
Plaintiff
cannot
recover
attorney’s fees.
Finally,
the
actual damages.
Court
considers
Plaintiff’s
entitlement
to
In Maryland, courts assess actual damages for
breach of contract following the two-part principle established
in Hadley v. Baxendale.
See Burson v. Simard, 35 A.3d 1154,
1159 (Md. 2012) (citing Hadley v. Baxendale, 9 Ex. 341, 156 Eng.
Rep. 145 (1854)).
Under this standard, the non-breaching party
in a breach of contract action may recover: (1) damages as may
fairly and reasonably be considered to arise naturally from the
breach of the contract itself (general damages); and (2) such
damages
“as
contemplation
may
of
reasonably
both
be
supposed
parties,
at
the
to
have
time
been
they
in
the
made
the
contract, as the probable result of the breach of it” (special
damages).
Id. (citing Lloyd v. General Motors Corp., 916 A.2d
257, 288 n.25 (2007)); CR-RSC Tower I, LLC v. RSC Tower I, LLC,
56 A.2d 170, 188-189 (Md. 2012).
contract
to
lend
money,
“the
In the case of a breach of a
borrower
can
get
judgment
for
damages measured by his resulting injury so far as the defendant
had reason to foresee such injury when the contract was made
11
. . . [d]oubtless, there are many cases in which [the lender]
has no reason to foresee that the borrower will be unable to
secure money elsewhere or that there will be special injuries;
but if he has such reason he must make good the loss.”
at
Chase
Corp.,
278
A.2d
at
35-36
(citing
St. Paul
Restatement
of
Contracts § 343 (1932)).
Here,
on
August
8,
2013,
Plaintiff
requested
a
twenty
thousand dollar ($20,000) payment pursuant to the line of credit
established under the August 1, 2013, agreement.
Ex. 5).
(ECF No. 10,
Defendants concede that they breached that agreement
when they failed to disburse those funds to Plaintiff within the
five-day window prescribed by the contract.
(ECF No. 10, 19).
Accordingly, Plaintiff’s general damages, such damages as may
fairly and reasonably be considered to arise naturally from the
breach of the contract itself, are fairly and reasonably on the
order of twenty thousand dollars ($20,000), the requested sum.
Plaintiff’s amended complaint, however, asserts further that as
a result of Defendants’ failure to timely disburse funds to him,
Plaintiff’s
businesses
irreparable harm.
have
suffered
(ECF No. 2, ¶9-10).
lost
profits
and
Moreover, Plaintiff’s
proffers that, because his businesses are seasonal in nature and
were near inception at the time of breach, he was particularly
injured by Defendants’ breach.
(Id. ¶¶ 5, 9).
12
Plaintiff, a pro se litigant, has pled few facts indicating
entitlement to special damages.
Specifically, the pleadings are
lacking in facts showing that Defendants contemplated, at the
time
of
contracting,
that
a
breach
would
cause
injury
Plaintiff beyond those arising naturally from the breach.
to
The
Court, however, finds that facts, including the seasonal and
fledgling
nature
particularized
inference
of
to
that
contracting,
Plaintiff’s
allow
the
court
Defendants’
that
a
businesses,
to
are
draw
contemplated,
failure
to
timely
Plaintiff would lead to special injuries.
sufficiently
the
at
reasonable
the
of
funds
disburse
time
to
The Court, therefore,
concludes that it does not appear “to a legal certainty” that
Plaintiff
cannot
recover
Defendants’ breach.
special
damages
resulting
from
Although the Court finds it highly unlikely
that Plaintiff is entitled to the actual damages pled in his
amended
complaint,
standard
for
one
million
determining
the
dollars
($1,000,000),
jurisdictional
amount
the
in
controversy is a lenient one and it is not clear “to a legal
certainty”
that
Plaintiff
cannot
recover
special
damages
sufficient to make the value of his claim greater than seventy
five thousand dollars ($75,000).
The Court, therefore, must
DENY Defendants’ motion to dismiss for lack of subject matter
jurisdiction.
13
B. Motion to Dismiss – Failure to State a Claim
Defendants
also
contend,
pursuant
to
Fed.
R.
Civ.
P.
12(b)(6), that Plaintiff’s claims against both Defendants should
be dismissed for failure to state a claim upon which relief may
be granted and that Plaintiff’s claim against Defendant Latitude
26 Investments, LLC should likewise be dismissed.
11-12).
(ECF No. 10,
The Court now addresses both motions.
The
present
contract.
case
arises
(ECF No. 2, ¶5).
out
of
the
August
1,
2013,
That agreement provided for a loan
of twenty thousand dollars ($20,000) and a revolving line of
credit up to fifty thousand dollars ($50,000) between Defendant
Goldstein, lender, and Plaintiff, borrower.
3).
The
August
1,
2013,
agreement
also
(ECF No. 10, Ex.
stated
that
“[a]ny
requested advances on the Line of Credit shall be honored by
[Defendant Goldstein] and paid to [Plaintiff] within Five (5)
days.”
(Id.)
Moreover, the language of the agreement expressly
states that the contract is “by and between HOWARD GOLDSTEIN, a
resident of the State of Maryland (hereinafter referred to as
the “Lender”) and JOHN A. GIORGILLI, a resident of the State of
Maryland (hereinafter referred to as the “Borrower”)” and the
document only contains the signatures of Howard Goldstein and
John A. Giorgilli.
(Id.)
As discussed supra, this Court, sitting in diversity, is
bound to apply Maryland law to determine the nature and extent
14
of the right Plaintiff is seeking to have enforced or protected.
See Klaxon, 313 U.S. at 496; DiFederico, 714 F.3d at 807.
Here,
the parties agree that the August 1, 2013, agreement constitutes
a valid contract and that Maryland law controls the agreement’s
validity and construction.
No. 10, Ex 3).
law
of
(ECF No. 10, 7; ECF No. 2, ¶1; ECF
Accordingly, the Court shall look to Maryland
contracts
to
determine
whether
Plaintiff’s
amended
complaint pleads a plausible claim for breach of contract.
On
this point, Maryland law holds that failure by one party to
perform a valid and subsisting obligation to the other confers
upon the non-breaching party the right to a cause of action for
breach.
RFC Northeast, LLC v. BAA Maryland, Inc., 994 A.2d 430,
442 (Md. 2010).
Having considered Plaintiff’s amended complaint, the Court
finds that it contains sufficient factual matter, accepted as
true, to state a plausible claim for breach of contract.
Iqbal, 556 U.S. at 678.
See
Plaintiff’s amended complaint contends
that he “requested the advancement of additional funds, per the
terms of the contract, numerous times and by various means, and
all requests were ultimately denied by defendant(s).”
Further,
the
amended
complaint
asserts
that
“[a]s
a
(Id.)
direct
result of defendant(s) tortuous acts in which they willfully,
knowingly and intentionally refused to advance the plaintiff the
necessary funds, per the agreed upon contract,” Plaintiff has
15
“lost income” and suffered “irreparable harm.”
Moreover,
Defendants’
own
motion
(Id. at ¶¶9-10).
concedes
that
Defendant
Goldstein breached the August 1, 2013, contract by failing to
disburse the twenty thousand dollars ($20,000) owed to Plaintiff
within the five-day window prescribed by the agreement.
No.
10,
19).
amended
The
complaint
contract.
Court,
pleads
therefore,
a
Defendants’
finds
plausible
Rule
that
claim
12(b)(6)
(ECF
Plaintiff’s
for
breach
motion
of
to
dismiss
Plaintiff’s
amended
Plaintiff’s claims against both Defendants is DENIED.
The
complaint
Court,
only
however,
pleads
a
finds
plausible
that
claim
for
relief
against
Defendant Goldstein, not Defendant Latitude 26 Investments, LLC.
Plaintiff and Defendant Goldstein are the only parties to the
August
1,
2013,
contract
and
Plaintiff
has
plead
no
facts
demonstrating any form of contractual privity between himself
and
Defendant
Latitude
26
Investments,
LLC.
Accordingly,
Plaintiff has only plead sufficient factual content to allow the
Court to draw the reasonable inference that Defendant Goldstein
is liable for the misconduct alleged.
678.
See Iqbal, 556 U.S. at
Consequently, Defendant’s Rule 12(b)(6) motion to dismiss
Plaintiff’s claim against Defendant Latitude 26 Investments, LLC
is GRANTED.
Heretofore, the Court shall refer only to Defendant
Goldstein.
16
C. Motion for Summary Judgment – Accord and Satisfaction
Defendant
Goldstein
also
asserts
entitlement
to
summary
judgment, pursuant to Fed. R. Civ. P. 56, because Plaintiff’s
claim
is
barred
satisfaction.
by
the
affirmative
(ECF No. 10, 17).
defense
of
accord
and
Because this Court is bound in
this diversity case to apply Maryland’s rules for choice of law,
see Klaxon, 313 U.S. at 496; DiFederico, 714 F.3d at 807; the
Court
will
likewise
look
to
Maryland
law
affirmative defense of accord and satisfaction.
governing
the
On this point,
Maryland law holds that to prevail on the affirmative defense of
accord and satisfaction, a Defendant must prove:
(1) that a dispute arose between the parties about the
existence or extent of liability; (2) that, after the
dispute arose, the parties entered into an agreement
to compromise and settle the dispute by the payment by
one party of a sum greater than that which he admits
he owes and the acceptance by the other party of a sum
less than that which he claims is due; and (3) that
the parties performed that agreement.
Wickman v. Kane, 766 A.2d 241, 245 (Md. 2001) (citing Air Power,
Inc. v. Omega Equip. Corp., 459 A.2d 1120 (Md. 1983)).
compromise
of
a
dispute
between
the
parties
will
“The
serve
as
consideration for an accord and satisfaction when the dispute is
bona fide: that is, the dispute is asserted in good faith and
the subject matter is reasonably doubtful.”
v.
Cearfoss,
51
A.2d
264,
267-68
(Md.
Id. (citing Snyder
1947)).
The
latter
element is required because forbearance of a claim which is not
17
asserted in good faith, i.e., is asserted “for the purposes of
vexation or ‘in order to realize on its nuisance value,’” is of
no value.
Id. at 245-46 (quoting 1 Corbin, Contracts § 140
(1963 & Supp. 1971)).
Similarly, when a claim is liquidated,
payment of an undisputed claim or debt that is liquidated and
presently due cannot support an accord and satisfaction.
246 (citing Reece v. Reece, 212 A.2d 468 (Md. 1965))
Id. at
In that
instance, there must be some collateral consideration beyond the
past
consideration
to
constitute
an
accord.
Id.
(citations
omitted).
As to the present case, Defendant Goldstein concedes that
he breached the August 1, 2013, agreement by failing to disburse
the twenty thousand dollars ($20,000) owed to Plaintiff within
the five-day window prescribed by the agreement.
19).
(ECF No. 10,
Defendant Goldstein, however, asserts that, on September
3, 2013, the parties reached a mutually agreeable resolution of
the present dispute whereby Defendant Goldstein paid Plaintiff
thirty
thousand
Plaintiff’s
dollars
agreement
to
($30,000)
settle
Defendant Goldstein’s prior breach.
any
in
consideration
disputes
arising
(Id., Ex. 4).
for
from
The Court,
therefore, will consider whether such an agreement constitutes
an accord and satisfaction settling Plaintiff’s present claim.
Defendant Goldstein contends that his breach only entitles
Plaintiff to the twenty thousand dollars ($20,000) he failed to
18
pay under the August 1, 2013, agreement.
(ECF No. 10, Ex. 4).
Conversely, Plaintiff’s amended complaint makes clear that he
claims one million dollars ($1,000,000) in actual damages, two
million dollars ($2,000,000) in punitive damages, as well as the
right to attorney’s fees and costs.
(ECF No. 2).
Defendant
Goldstein has submitted written proof that on September 3, 2013,
he
tendered
which
thirty
Plaintiff
thousand
accepted.
dollars
(ECF
No.
($30,000)
10,
Ex.
to
Plaintiff,
6).
Moreover,
Defendant Goldstein has filed an affidavit on his behalf and
proffers
therein
that
the
thirty
thousand
dollar
($30,000)
payment was made in consideration for Plaintiff’s agreement to
compromise the dispute arising from Defendant Goldstein’s prior
breach.
(Id., Ex. 4).
Plaintiff
contesting
has
the
offered
evidence
no
evidence
submitted
either
by
supporting
Defendant
regarding the September 3, 2013, transaction.
or
Goldstein
In particular,
Plaintiff has not acknowledged or disputed receipt of the thirty
thousand dollar ($30,000) payment nor has Plaintiff contested
that
the
payment
agreement
Goldstein’s
to
was
settle
prior
made
in
consideration
any
dispute
breach.
Faced
arising
with
a
for
out
motion
Plaintiff’s
of
Defendant
for
summary
judgment, Plaintiff may not rest upon the mere allegations or
denials of his pleading but instead must, by affidavit or other
evidentiary showing, set out specific facts showing a genuine
19
dispute for trial, Fed. R. Civ. P. 56(c)(1).
Where, as here, a
party fails to address the opposing party’s assertion of fact,
as required by Rule 56(c), the court may: “(2) consider the fact
undisputed for purposes of the motion;” and “(3) grant summary
judgment if the motion and supporting materials — including the
facts considered undisputed — show that the movant is entitled
to it.”
Fed. R. Civ. P. 56(e).
Having considered the present motion, the Court finds that
Defendant Goldstein has established his entitlement to summary
judgment.
The
record
demonstrates
that
Defendant
Goldstein
tendered payment of “a sum greater than that which he admits he
owes,” Plaintiff accepted “a sum less than that which he claims
is due,” and thirty thousand dollars ($30,000) was tendered to
Plaintiff in consideration for the compromise of the dispute
presently before this Court.
See Wickman, 766 A.2d at 245.
These facts are undisputed, Fed. R. Civ. P. 56(e).
Accordingly,
the Court finds that Defendant Goldstein has established the
affirmative
defense
of
judgment is appropriate.
VI.
accord
and
satisfaction
and
summary
A separate order shall issue.
Conclusion
For the foregoing reasons, Defendants’ motion to dismiss
for lack of subject matter jurisdiction is DENIED; Defendants’
motion to dismiss for failure to state a claim upon which relief
20
may
be
granted
is
DENIED;
Defendants’
motion
to
dismiss
Plaintiff’s claims for punitive damages is GRANTED; Defendants’
motion to dismiss Plaintiff’s claims against Defendant Latitude
26
Investments,
LLC
is
GRANTED;
summary judgment is GRANTED.
Date: _2/26/2014_
and
Defendants’
motion
for
A separate order shall issue.
___________/s/__________________
Susan K. Gauvey
United States Magistrate Judge
21
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