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