Chartier v. M. Richard Epps P.C. et al
MEMORANDUM OPINION. Signed by Judge Ellen L. Hollander on 9/23/14. (dass, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
Civil Action No. ELH-14-1071
M. RICHARD EPPS, P.C., et al.,
Andrew Chartier filed suit against M. Richard Epps, P.C. (“Epps”); Equifax Information
Services, LLC (“Equifax”); TransUnion, LLC (“TransUnion”);1 Cohn, Goldberg & Deutsch,
LLC (“Cohn”);2 and Green Tree Servicing, LLC (“Green Tree”), alleging violations of the Fair
Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (“FDCPA”) and the Fair Credit
Reporting Act, 15 U.S.C. § 1681, et seq. (“FCRA”). Chartier also asserts a claim for breach of
contract. See ECF 5 (“Amended Complaint” or “Am. Compl.”).
Pursuant to Rules 12(b)(2) and 12(b)(6) of the Federal Rules of Civil Procedure, Epps
filed a motion to dismiss (ECF 11), supported by a memorandum (ECF 11-1) (collectively, the
“Epps Motion”), seeking dismissal of the Amended Complaint based on lack of personal
jurisdiction and for failure to state a claim. Green Tree also filed a motion to dismiss (ECF 18)
and a supporting memorandum (ECF 18-1) (collectively, the “Green Tree Motion”), urging
dismissal pursuant to Rule 12(b)(6).3 Chartier has opposed both motions. ECF 28 (Opposition
Equifax and TransUnion each filed an answer to the Amended Complaint. See ECF 17
(TransUnion Answer); ECF 20 (Equifax Answer).
Cohn filed a notice of settlement, ECF 13, and was dismissed from the suit. ECF 25.
Green Tree filed a counterclaim against Chartier, ECF 24, which Chartier moved to
dismiss. ECF 30. Green Tree subsequently dismissed the counterclaim, without prejudice. ECF
to Green Tree Motion); ECF 29 (Opposition to Epps Motion). Green Tree and Epps each
replied. ECF 31 (Green Tree Reply); ECF 32 (Epps Reply).
The issues have been fully briefed, and no hearing is necessary to resolve them. See
Local Rule 105.6. For the reasons that follow, I will deny both motions.
I. Factual Background4
This case arises from a dispute concerning the interpretation of a settlement agreement.
On an unspecified date, plaintiff defaulted on his obligations under a promissory note, which was
held by Green Tree as servicing agent for RBS Citizens, N.A. See Am. Compl. Exh. A (ECF 52). When the debt became delinquent, Green Tree assigned it to Epps for collection. Am.
Compl. ¶ 12. On September 21, 2011, plaintiff entered into a Settlement Agreement and Release
with Green Tree, see Am. Compl. Exh. A (the “Agreement”), which was negotiated by Epps.
See Am. Compl. ¶ 13.
At the time of default, Chartier owed $42,273.17, with interest at an annual rate of eight
percent. See Agreement at 1. Under the Agreement, plaintiff promised to pay $21,136.00,
without interest (the “Settlement Amount”), in full satisfaction for the money owed on the
promissory note.5 Agreement ¶ 1. The Agreement specified that plaintiff was to pay an initial
installment of $2,500 by September 30, 2011, and then “$18,636.00 payable in equal monthly
installments of $328.26 commencing on October 15, 2011 and continuing on the same day of
each month thereafter until September 15, 2015 at which time the last such monthly installment
The Factual Background is largely drawn from the Amended Complaint. At this
juncture, the court “‘must accept as true all of the factual allegations contained in the
complaint,’” and must “‘draw all reasonable inferences in favor of the plaintiff.’” E.I. du Pont
de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir. 2011) (citations omitted).
Citing paragraph 1 of the Agreement, the Amended Complaint asserts that plaintiff
agreed to pay $21,113.00 to settle the debt owed. Am. Compl. ¶ 14. This appears to be a
typographical error, as the Agreement indicates that the Settlement Amount is $21,136.00.
of the settlement amount shall be due and payable.” Id. ¶ 2(b). The Agreement stipulated that
plaintiff could pre-pay the Settlement Amount, in whole or in part, “without penalty.” Id. ¶ 4;
Am. Compl. ¶ 15. In addition, the Agreement provided: “[S]o long as the installment payments
provided herein are received as provided herein the Lender will take no legal action to collect the
promissory note.” Id. ¶ 1. With respect to default, Epps was appointed as agent of Chartier to,
“without further notice to Borrower, confess judgment on behalf of the Borrower for the unpaid
balance . . . .” Id. ¶ 6. The Agreement also stated, id.:
In the event of a default in the making of any installment payment of the
settlement amount, and if such installment is not received by Green Tree
Servicing LLC within 10 days of its due date, at Lender’s option, this Settlement
Agreement and Release shall be null and void and in such event all payments
made pursuant to this Agreement prior to the default shall be applied to the
indebtedness and Borrower shall remain liable for the remaining balance of the
indebtedness, which said sum shall be immediately due and payable without
further notice to Borrower.
By the end of July 2013, plaintiff had paid the initial installment of $2,500.00 and made
forty-eight payments of $328.26. See Am. Compl. Exh. B (email dated July 29, 2013, 3:43 p.m.,
from Mr. Epps6 to Chartier). Almost two years after execution of the Agreement, on July 29,
2013, Mr. Epps sent an email to plaintiff, stating that there was a typographical error in the
Agreement and the monthly installment amount should have read $388.26 instead of $328.26—a
difference of $60.00 per month. Am. Compl. Exh. B. Mr. Epps acknowledged the receipt from
Chartier of forty-eight payments of $328.26 each, plus the initial installment, but advised
plaintiff that these payments only totaled $18,256.48. Id. In addition, Mr. Epps asserted that
When discussing Richard Epps, the individual, I will use “Mr. Epps,” to distinguish
such references from those pertaining to the entity M. Richard Epps, P.C. (which, as indicated, is
referred to as “Epps”). Mr. Epps is not a defendant.
plaintiff still owed a remaining balance of $2,869.527 pursuant to the Agreement. Id.; Am.
Compl. ¶ 17.
Plaintiff appended to the Amended Complaint a truncated version of a series of emails
exchanged prior to the settlement between Mr. Epps and Justin M. Jacks, Esq., plaintiff’s
attorney at the time he entered into the Agreement. Am. Compl. Exh. B (email of July 29, 2013,
from Mr. Epps to Chartier); see also Green Tree Mot. Exh. 1.8 In an email dated September 19,
2011, Jacks wrote to Mr. Epps: “Mr. Chartier would like to know what he needs to sign to get
this agreement done on the $2500.00 down and payments in 48 month [sic] installments of
$388.26.” Green Tree Mot. Exh. 1 (email of September 19, 2011, from Jacks to Mr. Epps). See
also Am. Compl. Exh. B (email of July 29, 2013, from Mr. Epps to Chartier, containing text of
the prior email of September 19, 2011).
On February 9, 2014, Chartier wrote an email to Mr. Epps to advise him of his current
Maryland address. Am. Compl. Exh. B (email of February 9, 2014, from Chartier to Mr. Epps).
Chartier stated: “I have no ties to Virginia or the Virginia Beach address. Please ensure all
communication comes to me at this address.” Id. On February 10, 2014, Mr. Epps responded to
Chartier’s email as follows: “Please advise if you intend to pay the remaining due under the
settlement. If so fine. If not I will advise my client to send the file to its Maryland attorney. My
Mr. Epps asserted in his email to plaintiff of July 29, 2013, that the total amount due
under the Agreement was $21,126.00. Based on this figure, Mr. Epps insisted that plaintiff still
owed $2,869.52 after paying $2,500 and forty-eight installments of $328.26. Notably, the
Agreement specifies a Settlement Amount of $21,136.00, which would leave a balance of
$2,879.52, rather than $2,869.52, after payment of $2,500.00 plus forty-eight installments of
In the same email of July 29, 2013, Mr. Epps also stated: “The monthly payment should
have been $388.36. $388.04 x 48 = $18,625.92 . . . .” It is not clear why Mr. Epps cited the
amount of $388.04.
As discussed, infra, attached to the Green Tree Motion is the original email exchange
between Mr. Epps and Jacks.
recommendation will be to pursue the entire balance remaining due, not just what remains of the
settlement.” Am. Compl. Exh. B (email of February 10, 2014 from Mr. Epps to Chartier). Below
this message, the email advised: “THE UNDERSIGNED IS A DEBT COLLECTOR. THIS IS
AN ATTEMPT TO COLLECT A DEBT.
ANY INFORMATION OBTAINED WILL BE
USED FOR THAT PURPOSE.” Id. (emphasis in original). At some point thereafter, Epps
forwarded the account to Cohn to collect a debt in the amount of $25,001.46. Id. ¶ 20.
Plaintiff also alleges that, in or around December 2013, he became aware that Green Tree
was reporting the debt to one or more of the three national consumer reporting agencies. Id.
¶ 22. On or about January 11, 2014, plaintiff sent a letter to Equifax and TransUnion, asserting
that the debt had been paid in full pursuant to a settlement with Green Tree.
Id. ¶ 23.
Nevertheless, plaintiff asserts, Equifax and TransUnion continued to report the debt as having a
current balance due and payable. Id. ¶ 24.
II. Standards of Review
A. Fed. R. Civ. P. 12(b)(2)
A motion to dismiss for lack of personal jurisdiction arises under Fed. R. Civ. P. 12(b)(2).
“When a court’s personal jurisdiction is properly challenged by a Rule 12(b)(2) motion, the
jurisdictional question thus raised is one for the judge, with the burden on the plaintiff ultimately
to prove the existence of a ground for jurisdiction by a preponderance of the evidence.” Combs
v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989). Discovery and an evidentiary hearing are not
required to resolve a motion under Rule 12(b)(2). See generally 5B Wright & Miller, Federal
Practice & Procedure § 1351, at 274–313 (3d ed. 2004, 2012 Supp.). Rather, the district court
may address the question of personal jurisdiction as a preliminary matter, ruling solely on the
basis of motion papers, supporting legal memoranda, affidavits, and the allegations in the
complaint. Consulting Engineers Corp. v. Geometric Ltd., 561 F.3d 273, 276 (4th Cir. 2009). In
that circumstance, a plaintiff need only make “a prima facie showing of a sufficient jurisdictional
basis to survive the jurisdictional challenge.” Id.
“In deciding whether the plaintiff has made the requisite showing, the court must take all
disputed facts and reasonable inferences in favor of the plaintiff.” Carefirst of Maryland, Inc. v.
Carefirst Pregnancy Centers, Inc., 334 F.3d 390, 396 (4th Cir. 2003). However, “‘[a] threshold
prima facie finding that personal jurisdiction is proper does not finally settle the issue; plaintiff
must eventually prove the existence of personal jurisdiction by a preponderance of the evidence,
either at trial or at a pretrial evidentiary hearing.’” New Wellington Fin. Corp. v. Flagship Resort
Dev. Corp., 416 F.3d 290, 294 n.5 (4th Cir. 2005) (citation omitted).9
B. Fed. R. Civ. P. 12(b)(6)
A defendant may test the adequacy of a complaint by way of a motion to dismiss under
Rule 12(b)(6) of the Federal Rules of Civil Procedure. See McBurney v. Cuccinelli, 616 F.3d
393, 408 (4th Cir. 2010). To survive a Rule 12(b)(6) motion, a complaint must satisfy the
pleading standard articulated in Fed. R. Civ. P. 8(a)(2), which requires a “short and plain
statement of the claim showing that the pleader is entitled to relief.” The purpose of the rule is to
provide the defendant with “fair notice” of the claim and the “grounds” for entitlement to relief.
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 & n.3 (2007). That showing must consist of
more than “a formulaic recitation of the elements of a cause of action” or “naked assertion[s]
devoid of further factual enhancement.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal
Alternatively, the court may, in its discretion, permit limited discovery as to the
jurisdictional issue. See Mylan Laboratories, Inc. v. Akzo, N.V., 2 F.3d 56, 64 (4th Cir. 1993).
Then, “the court may resolve the [jurisdictional] challenge on the basis of a separate evidentiary
hearing, or may defer ruling pending receipt at trial of evidence relevant to the jurisdictional
question.” Combs, 886 F.2d at 676. In this case, no party has requested discovery as to
citations omitted); see Painter’s Mill Grille, LLC v. Brown, 716 F.3d 342, 350 (4th Cir. 2013).
Rather, to defeat a motion under Rule 12(b)(6), a complaint must contain facts sufficient to “state
a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570; see Iqbal, 556 U.S. at
684 (“Our decision in Twombly expounded the pleading standard for ‘all civil actions’ . . . .”)
(citation omitted); see also Epps v. JP Morgan Chase Bank, N.A., 675 F.3d 315, 320 (4th Cir.
2012); Simmons v. United Mortg. & Loan Inv., LLC, 634 F.3d 754, 768 (4th Cir. 2011).
“[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of
misconduct, the complaint has alleged—but it has not ‘show[n]’—‘that the pleader is entitled to
relief.’” Iqbal, 556 U.S. at 679 (quoting Fed. R. Civ. P. 8(a)(2)).
In considering a Rule 12(b)(6) motion, the court ‘“must accept as true all of the factual
allegations contained in the complaint,’” and must ‘“draw all reasonable inferences [from those
facts] in favor of the plaintiff.”’ E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d
435, 440 (4th Cir. 2011) (citations omitted); see, e.g., Kendall v. Balcerzak, 650 F.3d 515, 522
(4th Cir. 2011), cert. denied, ___ U.S. ___, 132 S. Ct. 402 (2011). But, the court need not accept
unsupported or conclusory factual allegations devoid of any reference to actual events. United
Black Firefighters v. Hirst, 604 F.2d 844, 847 (4th Cir. 1979); see also Francis v. Giacomelli,
588 F.3d 186, 193 (4th Cir. 2009). Nor must it accept legal conclusions couched as factual
allegations, Iqbal, 556 U.S. at 678, or legal conclusions drawn from the facts. See Papasan v.
Allain, 478 U.S. 265, 286 (1986); Monroe v. City of Charlottesville, 579 F.3d 380, 385-86 (4th
Cir. 2009), cert. denied, 559 U.S. 992 (2010). If the “well-pleaded facts do not permit the court
to infer more than the mere possibility of misconduct,” the complaint has not shown that ‘“the
pleader is entitled to relief.”’ Iqbal, 556 U.S. at 679 (citation omitted).
“Determining whether a complaint states a plausible claim for relief will . . . be a contextspecific task that requires the reviewing court to draw on its judicial experience and common
sense.” Iqbal, 556 U.S. at 679. “A court decides whether this standard is met by separating the
legal conclusions from the factual allegations, assuming the truth of only the factual allegations,
and then determining whether those allegations allow the court to reasonably infer” that the
plaintiff is entitled to relief. A Society Without A Name v. Virginia, 655 F.3d 342, 346 (4th Cir.
2011), cert. denied, ___ U.S. ___, 132 S. Ct. 1960 (2012). Dismissal “is inappropriate unless,
accepting as true the well-pled facts in the complaint and viewing them in the light most
favorable to the plaintiff, the plaintiff is unable to ‘state a claim to relief . . . .’” Brockington v.
Boykins, 637 F.3d 503, 505-06 (4th Cir. 2011) (citation omitted). See Hartmann v. Calif. Dept.
of Corr. & Rehab., 707 F.3d 1114, 1122 (9th Cir. 2013) (“‘Dismissal under Rule 12(b)(6) is
appropriate only where the complaint lacks a cognizable legal theory or sufficient facts to
support a cognizable legal theory.’”) (citation omitted); Commonwealth Prop. Advocates, LLC v.
Mortg. Elec. Reg. Sys., Inc., 680 F.3d 1194, 1201-02 (10th Cir. 2011) (“When reviewing a
12(b)(6) dismissal, ‘we must determine whether the complaint sufficiently alleges facts
supporting all the elements necessary to establish an entitlement to relief under the legal theory
proposed.’ Dismissal is appropriate if the law simply affords no relief.”) (citation omitted).
Ordinarily, in resolving a motion under Rule 12(b)(6), a court “is not to consider matters
outside the pleadings . . . .” Bosiger v. U.S. Airways, Inc., 510 F.3d 442, 450 (4th Cir. 2007); see
Clatterbuck v. City of Charlottesville, 708 F.3d 549, 557 (4th Cir. 2013). If a court considers
material outside of the pleadings, “the motion must be treated as one for summary judgment
under Rule 56,” in which case “[a]ll parties must be given a reasonable opportunity to present all
the material that is pertinent to the motion.” Fed. R. Civ. P. 12(d). Under certain limited
exceptions, however, a court may consider exhibits without converting the motion to one for
summary judgment. For instance, a court may properly consider documents “attached to the
complaint, as well those attached to the motion to dismiss, so long as they are integral to the
complaint and authentic.” Philips v. Pitt Cnty. Mem. Hosp., 572 F.3d 176, 180 (4th Cir. 2009)
(citations omitted); see Anand v. Ocwen Loan Servicing, LLC, 754 F.3d 195, 198 (4th Cir. 2014);
Am. Chiropractic Ass’n v. Trigon Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004). To be
“integral,” a document must be one “that by its ‘very existence, and not the mere information it
contains, gives rise to the legal rights asserted.’” Chesapeake Bay Found., Inc. v. Severstal
Sparrows Point, LLC, 794 F. Supp. 2d 602, 611 (D. Md. 2011) (citation omitted) (emphasis in
original). Further, in resolving a motion to dismiss, a court may consider “documents which are
referred to in the Complaint and upon which Plaintiff relies in bringing the action.” Biospherics,
Inc. v. Forbes, Inc., 989 F. Supp. 748, 749-50 (D. Md. 1997), aff’d, 151 F.3d 180 (4th Cir. 1998);
accord Mid-Atlantic Soaring Ass’n, Inc. v. F.A.A., 2006 WL 1892412, at *7 (D. Md. June 29,
2006). Additionally, facts and documents subject to judicial notice may be considered by a
court, without converting the motion under Rule 12(d). Tellabs, Inc. v. Makor Issues & Rights,
Ltd., 551 U.S. 308, 322 (2007); Katyle v. Penn Nat’l Gaming, Inc., 637 F.3d 462, 466 (4th Cir.),
cert. denied, ___ U.S. ___, 132 S. Ct. 115 (2011).
Plaintiff has attached two exhibits to his Amended Complaint: (1) the Agreement (Am.
Compl. Exh. A, ECF 5-2); and (2) a chain of three emails between Chartier and Mr. Epps (Am.
Compl. Exh. B, ECF 5-3). Notably, Epps attached the same chain of emails as an exhibit to its
motion. See Epps Motion Exh. 1 (ECF 11-1). Green Tree and Epps raise no objections to any
exhibit attached to the Amended Complaint. Because the exhibits are integral to the Amended
Complaint and no party disputes their authenticity, I may consider them in connection with the
motions under a Rule 12(b)(6) standard. See Anand, 754 F.3d at 198; Philips, 572 F.3d at 180;
Am. Chiropractic Ass’n, 367 F.3d at 234.
In addition, Green Tree and Epps attached to their motions a chain of three emails
exchanged between Mr. Epps and Jacks. See Green Tree Motion Exh. 1 (ECF 18-2); Epps
Motion Exhs. 1(a), (b), and (c) (ECF 11-2). The email of July 29, 2013, from Mr. Epps to
Chartier, which is attached as Exhibit B to plaintiff’s Amended Complaint, references these three
emails and incorporates their content. In his oppositions to the motions, plaintiff raises no
objection to the exhibits attached by Green Tree and Epps. Because these emails are referenced
in the Amended Complaint, and because plaintiff has relied upon them in bringing suit, I may
consider them under a Rule 12(b)(6) standard. See Biospherics, Inc., 989 F. Supp. at 749-50;
Mid-Atlantic Soaring Ass’n, Inc., 2006 WL 1892412, at *7.
A. Dismissal Under Fed. R. Civ. P. 12(b)(2) for Lack of Personal Jurisdiction
Rule 4(k)(1)(A) of the Federal Rules of Civil Procedure authorizes a federal district court
to exercise personal jurisdiction over a defendant in accordance with the law of the state where
the district court is located. Carefirst, supra, 334 F.3d at 396. Therefore, “to assert personal
jurisdiction over a nonresident defendant, two conditions must be satisfied: (1) the exercise of
jurisdiction must be authorized under the state’s long-arm statute; and (2) the exercise of
jurisdiction must comport with the due process requirements of the Fourteenth Amendment.” Id.
Maryland’s long-arm statute is codified at Md. Code (2013 Repl. Vol., 2013 Supp.), § 6103(b) of the Courts & Judicial Proceedings Article. It authorizes “personal jurisdiction over a
person, who directly or by an agent”:
(1) Transacts any business or performs any character of work or service in the
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(2) Contracts to supply goods, food, services, or manufactured products in the
(3) Causes tortious injury in the State by an act or omission in the State;
(4) Causes tortious injury in the State or outside of the State by an act or omission
outside the State if he regularly does or solicits business, engages in any other
persistent course of conduct in the State or derives substantial revenue from
goods, food, services, or manufactured products used or consumed in the State;
(5) Has an interest in, uses, or possesses real property in the State; or
(6) Contracts to insure or act as surety for, or on, any person, property, risk,
contract, obligation, or agreement located, executed, or to be performed within the
State at the time the contract is made, unless the parties otherwise provide in
Maryland’s courts have “consistently held that the purview of [Maryland’s] long arm
statute is coextensive with the limits of personal jurisdiction set by the due process clause of the
Federal Constitution.” Beyond Systems, Inc. v. Realtime Gaming Holding Co., 388 Md. 1, 15,
878 A.2d 567, 576 (2005) (citing Mohamed v. Michael, 279 Md. 653, 657, 370 A.2d 551, 553
(1977)). “Because the limits of Maryland’s statutory authorization for the exercise of personal
jurisdiction are coterminous with the limits of the Due Process Clause, the statutory inquiry
necessarily merges with the constitutional inquiry, and the two inquiries essentially become
one.” Stover v. O’Connell Assocs., Inc., 84 F.3d 132, 135-36 (4th Cir. 1996); accord ALS Scan,
Inc. v. Digital Service Consultants, Inc., 293 F.3d 707, 710 (4th Cir. 2002). Thus, the question is
whether the exercise of personal jurisdiction offends the due process guarantee of the Fourteenth
The United States Supreme Court has long held that personal jurisdiction over a
nonresident defendant is constitutionally permissible so long as the defendant has “minimum
contacts with [the forum state] such that the maintenance of the suit does not offend ‘traditional
notions of fair play and substantial justice.’” International Shoe Co. v. Washington, 326 U.S.
310, 316 (1945). Due process jurisprudence recognizes “two types of personal jurisdiction:
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general and specific.” CFA Institute v. Institute of Chartered Financial Analysts of India, 551
F.3d 285, 292 n.15 (4th Cir. 2009). The difference between the two turns on the amount and
nature of the contacts with the forum state that are necessary to meet the “minimum contacts”
threshold. The Fourth Circuit has explained:
General personal jurisdiction, on the one hand, requires ‘continuous and
systematic’ contacts with the forum state, such that a defendant may be sued in
that state for any reason, regardless of where the relevant conduct occurred.
Specific personal jurisdiction, on the other hand, requires only that the relevant
conduct have such a connection with the forum state that it is fair for the
defendant to defend itself in that state.
Id. (citing, inter alia, Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-15
(1984)) (internal citations omitted).
Plaintiff does not assert that general jurisdiction exists over Epps in this case. See ECF
29. The Fourth Circuit has set forth a three-part inquiry for determining whether the due process
requirements for asserting specific jurisdiction have been met. In particular, a court considers:
“(1) the extent to which the defendant has purposefully availed itself of the privilege of
conducting activities in the state; (2) whether the plaintiffs’ claims arise out of those activities
directed at the state; and (3) whether the exercise of personal jurisdiction would be
constitutionally ‘reasonable.’” Consulting Engineers, supra, 561 F.3d at 278 (citing ALS Scan,
293 F.3d at 715). See also Carefirst, 334 F.3d at 397.
“The first prong articulates the minimum contacts requirement of constitutional due
process that the defendant purposefully avail himself of the privilege of conducting business
under the laws of the forum state.” Consulting Engineers, 561 F.3d at 278. “Th[e] ‘purposeful
availment’ requirement ensures that a defendant will not be haled into a jurisdiction solely as a
result of ‘random,’ ‘fortuitous,’ or ‘attenuated’ contacts, or of the ‘unilateral activity of another
party or a third person.’” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985) (internal
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citations omitted); see also ESAB Grp., Inc. v. Zurich Ins. PLC, 685 F.3d 376, 392 (4th Cir.
To satisfy the second prong of the test for specific jurisdiction, a defendant’s contacts
with the forum state must form the basis of the suit. Consulting Engineers, 561 F.3d at 278-79.
The constitutional reasonableness inquiry permits a defendant “who purposefully has directed his
activities at forum residents” to defeat jurisdiction, if he can “present a compelling case that the
presence of some other considerations would render jurisdiction unconstitutional.” Burger King,
471 U.S. at 477. “This prong of the analysis ensures that litigation is not so gravely difficult and
inconvenient as to place the defendant at a severe disadvantage in comparison to his opponent.”
Tire Eng’g & Distribution, LLC v. Shandong Linglong Rubber Co., Ltd., 682 F.3d 292, 303 (4th
Cir. 2012) (citing CFA Inst., 551 F.3d at 296) (internal quotation marks omitted), cert. denied,
___ U.S. ___, 133 S. Ct. 846 (2013).
The Supreme Court expounded on the minimum contacts requirement in Burger King,
471 U.S. 462.
There, the Court explained that minimum contacts are those that involve
“significant activities within a State” or “‘continuing obligations’ between [the defendant] and
residents of the forum.” Id. at 475-76 (citations omitted). The benchmark is “‘foreseeability . . .
that the defendant’s conduct and connections with the forum state are such that he should
reasonably anticipate being hauled into court there.’”
Id. at 474 (quoting World-Wide
Volkswagen Corp. v. Woodson, 444 U.S. 286, 295 (1980)).
In the context of a contractual relationship, the Burger King Court stated unequivocally
that entering into a contract with a citizen of the forum state “alone” cannot “automatically
establish minimum contacts” over a nonresident defendant.
471 U.S. at 478 (emphasis in
original). But, the Court was equally clear that “even a single act can support jurisdiction,” so
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long as that act “creates a ‘substantial connection’ with the forum.” Id. at 475 n.18 (citation
omitted). Likewise, in Carefirst, 334 F.3d at 397, the Fourth Circuit said: “Even a single contact
may be sufficient to create jurisdiction when the cause of action arises out of that single contact,
provided that the principle of ‘fair play and substantial justice’ is not thereby offended.” See
also, e.g., Planet Technologies, Inc. v. Planit Technology Group, LLC, 735 F. Supp. 2d 397, 401
(D. Md. 2010); Cole-Tuve, Inc. v. American Machine Tools Corp., 342 F. Supp. 2d 362, 366 (D.
Md. 2004); Nichols v. G.D. Searle & Co., 783 F. Supp. 233, 238 (D. Md. 1992), aff’d, 991 F.2d
1195 (4th Cir. 1993).
Further, the Burger King Court stated: “Although territorial presence frequently will
enhance a potential defendant’s affiliation with a State and reinforce the reasonable
foreseeability of suit there,” jurisdiction cannot be “avoided merely because the defendant did
not physically enter the forum State.” 471 U.S. at 476 (emphasis in original). Of import here,
the Burger King Court observed that “it is an inescapable fact of modern commercial life that a
substantial amount of business is transacted solely by mail and wire communications across state
lines, thus obviating the need for physical presence within a State in which business is
The Supreme Court explained, id. at 479 (internal citations omitted):
[A] “contract” is ordinarily but an intermediate step serving to tie up prior
business negotiations with future consequences which themselves are the real
object of the business transaction.” It is these factors—prior negotiations and
contemplated future consequences, along with the terms of the contract and the
parties’ actual course of dealing—that must be evaluated in determining whether
the defendant purposefully established minimum contacts with the forum.
As the parties’ email correspondence shows, that observation is all the more true in the
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In Consulting Engineers, 561 F.3d at 278, the Fourth Circuit enumerated several
“nonexclusive factors,” applicable in the “business context,” that might help to “resolve whether
a defendant has engaged in . . . purposeful availment.” The factors include, inter alia:
whether the defendant reached into the forum state to solicit or initiate
whether the defendant deliberately engaged in significant or long-term
business activities in the forum state;
whether the parties contractually agreed that the law of the forum state would
whether the defendant made in-person contact with the resident of the forum
in the forum state regarding the business relationship;
the nature, quality and extent of the parties’ communications about the
business being transacted; and
whether the performance of contractual duties was to occur within the
Id. (internal citations omitted). The Consulting Engineers Court cautioned, however, that these
factors are “not susceptible of mechanical application.” Id.
Epps has submitted an affidavit in which Mr. Epps avers that neither he nor M. Richard
Epps, P.C. conducts any business in the state of Maryland, derives an income from business
conducted in Maryland, or owns any real property in the state of Maryland. Epps Motion Exh. 2
(ECF 11-3, Affidavit). According to Mr. Epps, the Agreement was executed in Virginia Beach,
Virginia, and plaintiff was a resident of Virginia Beach, Virginia at the time. Id. ¶¶ 9-10.
To support his position that specific jurisdiction over Epps exists, plaintiff points to the
February 2014 email exchange between Mr. Epps and plaintiff. ECF 29 at 11 (citing Am.
Compl. Exh. B). According to plaintiff, Epps purposefully availed itself of the privilege of
conducting activities in Maryland through Mr. Epps’s email, sent in an attempt to collect a debt
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from plaintiff, who Mr. Epps knew to be a Maryland resident. Id. And, because Mr. Epps’s
email of February 10, 2014, is one of the communications forming the basis of plaintiff’s
FDCPA claim, plaintiff insists that personal jurisdiction is proper because the suit arises out of
activities directed at Maryland. Id. at 11-12.
Although plaintiff’s jurisdictional allegations are primarily founded on the email of
February 10, 2014, Epps argues that it did not purposefully avail itself of the privilege of
conducting activities in Maryland or purposefully direct activities toward Maryland by way of
the email of July 29, 2013. ECF 32 at 3. Because Epps was not notified of plaintiff’s Maryland
residency until February 9, 2014, Epps insists that it did not purposefully avail itself of the
privilege of conducting activities in Maryland or purposefully direct activities toward Maryland
by way of any communications with plaintiff prior to that date. Id.; see ECF 11-1.
Epps also challenges plaintiff’s assertion that Mr. Epps’s email to plaintiff on February
10, 2014, is sufficient to establish specific jurisdiction.11 ECF 32 at 4. According to Epps, the
email of February 10, 2014, demonstrates that Epps would not pursue the debt or claim in
Maryland, and this lone email should not be construed as an attempt to purposefully avail itself
of the privilege of conducting business in Maryland. Id. at 4-5. With respect to the email of
February 10, 2014, Epps does not appear to dispute that plaintiff’s claim against it arises out of
activities directed at Maryland.
In my view, Epps purposefully availed itself of the privilege of conducting activities in
the forum by directing debt collection activities at a Maryland resident. Epps’s contention that
the email of February 10, 2014, merely indicated that Mr. Epps would be transferring collection
In its Reply, Epps states that Mr. Epps emailed plaintiff on February 9, 2014.
However, the exhibits reflect that Mr. Epps emailed plaintiff on February 10, 2014, in response
to an email that plaintiff wrote on February 9, 2014, notifying Epps that he resided in Maryland.
The discrepancy is not material for the purposes of this Motion.
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responsibilities to a Maryland attorney, see ECF 32 at 4, is a mischaracterization of its content.
Rather, in the email, Mr. Epps asked Chartier to advise whether he intended to pay the debt that
purportedly remained due under the Agreement. See Am. Compl. Exh. B (email of February 10,
2014 from Richard Epps to Chartier). Further, Mr. Epps threatened that, in the event Chartier
did not pay the debt, he would recommend that Green Tree pursue recovery of the entire amount
remaining due under the loan, rather than the smaller sum that purportedly remained due
pursuant the Agreement. See id. Notably, the email specifically stated: “THE UNDERSIGNED
IS A DEBT COLLECTOR.
THIS IS AN ATTEMPT TO COLLECT A DEBT.
INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE.” Id. (emphasis in
original). Moreover, the email suggests that it was Mr. Epps’s advice that compelled Green Tree
thereafter to attempt to collect the entire amount remaining due under the loan, rather than the
amount that purportedly remained due pursuant the Agreement.
Regarding personal jurisdiction in the context of FDCPA claims, in Sluys v. Hand, 831 F.
Supp. 321, 324 (S.D.N.Y. 1993), the court said:
Where an alleged debtor is located in a jurisdiction and receives documents from
a person purporting to be a debt collector located elsewhere, and the transmittal of
those documents is claimed to have violated the [FDCPA], suits may be brought
where the debtor . . . receive[s] the communications. Otherwise, one could invoke
the protection of distance and send violative letters with relative impunity, at least
so far as less well-funded parties are concerned.
Notably, Sluys involved a single letter, copies of which were sent from defendant, an
Indiana attorney, to the plaintiff and his employer, both located in New York. 831 F. Supp. at
323. Other courts addressing personal jurisdiction and FDCPA claims have reached similar
conclusions in cases involving only a single communication. See, e.g., Silva v. Jason Head,
PLC, 2010 WL 4593704, at *3 (N.D. Cal. Nov. 4, 2010) (personal jurisdiction existed as to
nonresident attorney/debt collector based on single voicemail that gave rise to FDCPA claim);
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Maloon v. Schwartz, Zweban & Slingbaum, L.L.P., 399 F. Supp. 2d 1108, 1112-13 (D. Haw.
2005) (personal jurisdiction existed where defendant debt collector’s only contact with the forum
was a single debt collection letter); Paradise v. Robinson and Hoover, 883 F. Supp. 521, 524-26
(D. Nev. 1995) (concluding that plaintiff made prima facie showing of personal jurisdiction as to
Oklahoma law firm based on plaintiff’s alleged receipt in Nevada, the forum state, of a single
debt collection letter sent by the defendant law firm).
Epps emphasizes that the email of February 10, 2014, was the only communication that
Epps sent after learning that Chartier resided in Maryland.
ECF 32 at 4.
considering whether to exercise jurisdiction over a defendant, a court must focus on the quality,
not merely the quantity, of the contacts. See Carefirst, 334 F.3d at 397. In this case, I am
persuaded that Epps’s actions created the sort of connection to this forum “such that he should
reasonably anticipate being haled into court [here] . . . .” World–Wide Volkswagen, 444 U.S. at
With respect to the second prong of the analysis, plaintiff’s claims against Epps arise in
substantial part from its forum-related activities. This is because the email of February 10, 2014,
is one of the communications upon which plaintiff’s FDCPA claims are predicated.
Having found that Epps’s conduct amounted to “purposefully direct[ing]” its activities at
a resident of Maryland, the forum state, and that plaintiff’s claim “arises out of or relates to”
Epps’s activities within the forum, I must next address the third prong of the analysis, i.e.,
whether the assertion of specific personal jurisdiction over defendant would be constitutionally
reasonable. The following factors are relevant to the consideration of reasonableness:
(1) the burden on the defendant of litigating in the forum; (2) the interest of the
forum state in adjudicating the dispute; (3) the plaintiff’s interest in obtaining
convenient and effective relief; (4) the shared interest of the states in obtaining
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efficient resolution of disputes; and (5) the interests of the states in furthering
substantive social policies.
Consulting Engineers, 561 F.3d at 279 (citing Burger King, 471 U.S. at 477).
considerations sometimes serve to establish the reasonableness of jurisdiction upon a lesser
showing of minimum contacts than would otherwise be required.” Burger King, 471 U.S. at 477.
Here, the burden of litigating in Maryland is minimal because of Epps’s location in
neighboring Virginia. As to the interest of the forum state, “[a] State generally has a ‘manifest
interest’ in providing its residents with a convenient forum for redressing injuries inflicted by
out-of-state actors.” Burger King, 471 U.S. at 474. Moreover, Chartier’s interest in obtaining
convenient and effective relief would be readily achieved by litigating the dispute in this forum,
as he lives in Maryland and several of the other defendants in the action have submitted to
jurisdiction here. The fact that the other defendants have submitted to jurisdiction in Maryland
also serves the states’ shared interest in obtaining efficient resolution of dispute, in light of the
piecemeal litigation that would result if plaintiff’s claims against Epps were severed.
balance, these factors weigh heavily in favor of a Maryland forum for resolution of plaintiff’s
claims against Epps.
Because I am satisfied that plaintiff has made the requisite prima facie showing of
personal jurisdiction over Epps, the motion to dismiss for lack of personal jurisdiction will be
denied, without prejudice.
B. Dismissal Under Fed. R. Civ. P. 12(b)(6) for Failure to State a Claim
In essence, this dispute turns on the interpretation of a contract that, in plaintiff’s view,
required him to pay an initial installment of $2,500.00, and then $328.26 for forty-eight months
thereafter. Green Tree and Epps, in contrast, contend that the Agreement clearly contained a
typographical error and, consistent with the parties’ actual intent, it should have provided for a
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monthly installment amount of $388.26. Green Tree and Epps insist that plaintiff still owed
nearly $2,900 after paying the initial installment and then forty-eight installments of $328.26.
Moreover, they claim that plaintiff defaulted on his payments under the Agreement by refusing
to pay that amount, and thus he now owes the full balance remaining under the promissory note.
Asserting that he fulfilled his obligations under the Agreement after tendering forty-eight
payments of $328.26, plaintiff alleges that Green Tree violated the FCRA by reporting to
consumer reporting agencies that the debt had a current balance that was due and payable. See
Am. Compl. ¶¶ 22-24. Plaintiff also lodges a claim for breach of contract, arguing that Green
Tree breached the terms of the Agreement “by attempting to collect an additional amount from
Plaintiff and by failing to update his credit report to reflect the Debt had been paid.” Id. ¶ 48. As
to Epps, plaintiff contends that it violated various provisions of the FDCPA by attempting to
collect a debt that plaintiff did not owe. See id. ¶ 34; ECF 29 at 14.
As a preliminary matter, there is a question of what law applies to the contractual dispute.
A federal court sitting in diversity must apply the law of the state in which the court is located,
including the forum state’s choice-of-law rules, unless a compelling federal interest directs
otherwise. Colgan Air, Inc. v. Raytheon Aircraft Co., 507 F.3d 270, 275 (4th Cir. 2007); Baker
v. Antwerpen Motorcars, Ltd., 807 F. Supp. 2d 386, 389 n.13 (D. Md. 2011). As to contract
claims, Maryland applies the law of the state in which the contract was formed (“lex loci
contractus”), unless the parties to the contract agreed to be bound by the law of another state.
See, e.g., Am. Motorists Ins. Co. v. ARTRA Group, Inc., 338 Md. 560, 573, 659 A.2d 1295, 1301
(1995); TIG Ins. Co. v. Monongahela Power Co., 209 Md. App. 146, 161, 58 A.3d 497, 507
(2012). A contract is formed where the last act necessary to make it binding occurs. Konover
Prop. Trust Inc. v. WHE Assocs., 142 Md. App. 476, 490, 790 A.2d 720, 728 (2002).
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At this stage in the litigation, it is unclear whether Maryland or Virginia law governs.
The Amended Complaint does not contain allegations regarding the location of the Agreement’s
formation, and the Agreement does not contain a choice-of-law provision. Moreover, the parties
take no definitive position on choice of law in their briefing. Epps applies Maryland law to the
contractual issues without discussion. Green Tree and Chartier recognize that either Maryland or
Virginia law would apply to the contractual dispute, and analyze plaintiff’s claims under the law
of both states.
“Choice-of-law analysis becomes necessary, however, only if the relevant laws of the
different states lead to different outcomes.” Lowry’s Reports, Inc. v. Legg Mason, Inc., 271 F.
Supp. 2d 737, 750 (D. Md. 2003). Where the laws “do not so conflict, the choice is immaterial,
and the law of the forum—Maryland—governs.” Id. Here, the parties have not identified any
relevant legal principles in Maryland or Virginia that differ. Indeed, in applying both Maryland
and Virginia law, Green Tree and plaintiff posit that the result would be the same. See ECF 28;
ECF 29; ECF 31.
At this juncture, I will defer resolving the choice of law issue until after the parties have
engaged in discovery. Rather, for the purposes of defendants’ motions, I will apply Maryland
law in resolving the parties’ contract-based disputes. See Ohio Sav. Bank v. Progressive Cas.
Ins. Co., 521 F.3d 960, 962 (8th Cir. 2008) (“Like the district court, we will ignore what might
be a complex choice of law analysis because the parties have not identified a relevant state law
conflict.”); Cleaning Auth., Inc. v. Nubert, 739 F. Supp. 2d 807, 820 (D. Md. 2010) (“‘Choice-oflaw analysis becomes necessary . . . only if the relevant laws of the different states lead to
different outcomes.’”) (citation omitted).
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“Maryland adheres to the principle of the objective interpretation of contracts.” Cochran
v. Norkunas, 398 Md. 1, 16, 919 A.2d 700, 709 (2007). Under Maryland law, “interpretation of
a contract, including the determination of whether a contract is ambiguous, is a question of
law . . . .” Sy-Lene of Wash., Inc. v. Starwood Urban Retail II, LLC, 376 Md. 157, 163, 829 A.2d
540, 544 (2003); see also Myers v. Kayhoe, 391 Md. 188, 198, 892 A.2d 520, 526 (2006);
Towson Univ. v. Conte, 384 Md. 68, 78, 862 A.2d 941, 946 (2004); Lema v. Bank of Am., N.A.,
375 Md. 625, 641, 826 A.2d 504, 513 (2003).
In Maryland, “‘[t]he cardinal rule of contract interpretation is to give effect to the parties’
intentions.’” Dumbarton Imp. Ass’n. Inc. v. Druid Ridge Cemetery Co., 434 Md. 37, 51, 73 A.3d
224, 232 (2013) (citation omitted). See Middlebrook Tech, LLC v. Moore, 157 Md. App. 40, 66,
849 A.2d 63, 79 (2004) (“The principal goal in the interpretation of contracts is to effectuate the
intention of the parties.”). To determine the parties’ intentions, courts first look to the written
language of the contract. Sy-Lene of Washington, 376 Md. at 166, 829 A.2d at 546. See Walton
v. Mariner Health of Maryland, Inc., 391 Md. 643, 660, 894 A.2d 584, 594 (2006) (“Generally,
when seeking to interpret the meaning of a contract our search is limited to the four corners of
the agreement.”). “‘The words employed in the contract are to be given their ordinary and usual
meaning, in light of the context within which they are employed.’” DIRECTV, Inc. v. Mattingly,
376 Md. 302, 313, 829 A.2d 626, 632-33 (2003) (citation omitted). And, “where the language
employed in a contract is unambiguous, a court shall give effect to its plain meaning and there is
no need for further construction by the court.” Id. at 312, 829 A.2d at 630.
When a contract’s language is clear and unambiguous, “its construction is for the court to
determine.” Wells v. Chevy Chase Bank, F.S.B., 363 Md. 232, 251, 768 A.2d 620, 630 (2001).
In construing a contract, a court must consider “what a reasonable person in the same position
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would have understood as the meaning of the agreement.” Walton, 391 Md. at 660, 894 A.2d at
594; see Hartford Acc. & Indem. Co. v. Scarlett Harbor Assoc. Ltd. P’ship, 109 Md. App. 217,
291, 674 A.2d 106, 142 (1996) (“[T]he court must, as its first step, determine from the language
of the agreement what a reasonable person in the position of the parties would have meant at the
time the agreement was effectuated.”), aff’d, 346 Md. 122, 695 A.2d 153 (1997). A court will
presume that the parties meant what they stated in an unambiguous contract, without regard to
what the parties to the contract personally thought it meant or intended it to mean.
Dumbarton, 434 Md. at 51, 73 A.3d at 232; Dennis v. Fire & Police Employees Ret. Sys., 390
Md. 639, 656, 890 A.2d 737, 747 (2006); PaineWebber Inc. v. East, 363 Md. 408, 414, 768 A.2d
1029, 1032 (2001). See also, e.g., Scarlett Harbor, 109 Md. App. at 291, 674 A.2d at 142
(“Where the language of a contract is clear, there is no room for construction; it must be
presumed that the parties meant what they expressed.”).
Moreover, a court will not “add or delete words to achieve a meaning not otherwise
evident from a fair reading of the language used.” Brensel v. Winchester Constr. Co., 392 Md.
601, 624, 898 A.2d 472, 485 (2006). Indeed, “[i]t is a fundamental principle of contract law that
it is ‘improper for the court to rewrite the terms of a contract, or draw a new contract for the
parties, when the terms thereof are clear and unambiguous, simply to avoid hardships.’”
Calomiris v. Woods, 353 Md. 425, 445, 727 A.2d 358, 368 (1999) (quoting Canaras v. Lift Truck
Servs., 272 Md. 337, 350, 322 A.2d 866, 873 (1974)); see Loudin Ins. Agency, Inc. v. Aetna Cas.
& Sur. Co., 966 F.2d 1443 (Table), 1992 WL 145269, at *5 (4th Cir. 1992) (per curiam) (“[A]
court will not rewrite the parties’ contract simply because one party is no longer satisfied with
the bargain he struck.”).
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A “contract is ambiguous if it is subject to more than one interpretation when read by a
reasonably prudent person.” Sy-Lene of Washington, 376 Md. at 167, 829 A.2d at 547; see
Cochran, 398 Md. at 17, 919 A.2d at 710; Auction & Estate Representatives, Inc. v. Ashton, 354
Md. 333, 340, 731 A.2d 441, 444-45 (1999); Calomiris, 353 Md. at 436, 727 A.2d at 363. To
determine whether a contract is ambiguous, a court considers “the character of the contract, its
purpose, and the facts and circumstances of the parties at the time” that they enter into the
contract. Pacific Indem. Co. v. Interstate Fire & Cas. Co., 302 Md. 383, 388, 488 A.2d 486, 488
Of import here, in the context of a motion to dismiss, the construction of an ambiguous
contract “‘is a question of fact which, if disputed, is not susceptible of resolution under a motion
to dismiss for failure to state a claim.’” Horlick v. Capital Women’s Care, LLC, 896 F. Supp. 2d
378, 394 (D. Md. 2011) (applying Maryland contract law) (quoting Wolman v. Tose, 467 F.2d
29, 34 (4th Cir. 1972)). See also Martin Marietta Corp. v. Int’l Telecomm. Satellite Org., 991
F.2d 94, 98 (4th Cir. 1992) (applying Maryland contract law and reversing trial court’s grant of a
motion to dismiss because the contract in issue was “not free of ambiguity”); Hardwire LLC v.
Goodyear Tire & Rubber Co., 360 F. Supp.2d 728, 736 (D. Md. 2005) (applying Ohio contract
law and noting that “an ambiguous contract provision is a factual determination that precludes
dismissal on a motion for failure to state a claim.”).
At an appropriate time, a court may “consider any extrinsic evidence which sheds light
on the intentions of the parties at the time of the execution of the contract.”
Commissioners of Charles Cnty. V. St. Charles Associates Ltd. P’ship, 366 Md. 426, 445, 784
A.2d 545, 556 (2001); accord John L. Mattingly Const. Co., Inc. v. Harford Underwriters Ins.
Co., 415 Md. 313, 327, 999 A.2d 1066, 1074 (2010). And, “if ambiguity is determined to remain
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after consideration of extrinsic evidence, ‘it will ordinarily be resolved against the party who
drafted the contract.’” Clendenin Bros., Inc. v. U.S. Fire Ins. Co., 390 Md. 449, 459-60, 889
A.2d 387, 394 (2006) (quoting Collier v. MD-Individual Practice Association, Inc., 327 Md. 1,
6, 607 A.2d 537, 539 (1992)) (emphasis added; further citations omitted). In the context of
summary judgment, if “extrinsic evidence . . . leaves genuine issues of fact respecting the
contract’s proper interpretation, summary judgment must . . . be refused and interpretation left to
the trier of fact.’” Basile Baumann Prost Cole & Assocs., Inc. v. BBP & Assocs. LLC, 875 F.
Supp. 2d 511, 526 (D. Md. 2012) (quoting Washington Metro. Area Transit. Auth. v. Potomac
Inv. Props., Inc., 476 F.3d 231, 234 (4th Cir. 2007)).
With this framework in mind, I turn to the provisions of the Agreement. It states, in
1. Lender Agrees to accept the sum of $21136.00 (the “settlement amount”) in full
satisfaction of all monies on said promissory note.
2. The settlement amount shall be paid without interest as follows:
a. an initial installment of $2500.00 due September 30, 2011;
b. $18636.00 payable in equal monthly installments of $328.26 commencing on
October 15, 2011 and continuing on the same day of each month thereafter
until September 15, 2015 at which time the last such monthly installment of
the settlement amount shall be due and payable.
Agreement at 2 (emphasis in original).
It is clear that the Agreement contains a typographical or mathematical error. The total
settlement amount set forth in ¶ 1 is incongruent with the amount of the “initial installment” and
the monthly payments recited in ¶¶ 2(a) and 2(b) of the Agreement. In particular, a monthly
payment of $328.26 for forty-eight months would total $15,756.48—not the $18,636.00 set forth
in ¶ 2(b).
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As indicated, Epps and Green Tree insist that the Agreement should have provided for a
monthly installment of $388.26. See, e.g., ECF 11-1 at 7; ECF 18-1 at 2, 9. However, to pay
$18,636.00—the sum identified in the Agreement—spread out over forty-eight equal monthly
installments, would require monthly payments of $388.25. That sum differs from the $328.26
recited in ¶ 2(b) of the Agreement. Moreover, it also differs (if only by one cent) from the
sum—$388.26—that both Epps and Green Tree insist should have appeared in the Agreement.
See, e.g., ECF 11-1 at 7; ECF 18-1 at 2, 9. In any event, what cannot be definitively ascertained,
based on the four corners of the contract, is where that error lies. Accordingly, the error renders
the Agreement facially ambiguous as to the amount plaintiff was required to pay in order to
fulfill his obligations under the contract.
The parties devote significant energy to arguing that the Court should consider extrinsic
evidence in the event that the Agreement contains an ambiguity. Green Tree and Epps, on the
one hand, urge the Court to consider the parties’ negotiations leading up to the Agreement as
evidenced by the email exchange between Mr. Epps and Jacks. Plaintiff, on the other hand,
asserts that defendants’ course of performance is informative of the parties’ intent for the
monthly payments to be in the amount of $328.26. Further, plaintiff maintains that ambiguities
should be construed against the drafter.
It may be that extrinsic evidence will clearly establish the proper interpretation of the
Agreement. However, as noted above, the construction of an ambiguous contract provision is
not susceptible to resolution on a motion to dismiss for failure to state a claim.
Plaintiff also advances the argument that Green Tree waived any right to payment of
$21,136.00 by accepting forty-eight payments of $328.26 without objection. Yet, “whether
subsequent conduct of the parties amounts to a modification or waiver of their contract is
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generally a question of fact to be decided by the trier of fact.” University Nat’l Bank v. Wolfe,
279 Md. 512, 523, 369 A.2d 570, 576 (1977); see also Hovnanian Land Inv. Grp., LLC v.
Annapolis Towne Ctr. at Parole, LLC, 421 Md. 94, 122, 25 A.3d 967, 983 (2011); BarGale
Indus., Inc. v. Robert Realty Co., Inc., 275 Md. 638, 644, 343 A.2d 529, 533 (1975).12
In light of the ambiguity in the Agreement and surrounding factual issues, I decline to
dismiss plaintiff’s claims against Epps and Green Tree.
For the foregoing reasons, the motions of Epps and Green Tree are denied. A separate
Order follows, consistent with this Memorandum Opinion.
Date: September 23, 2014
Ellen Lipton Hollander
United States District Judge
No party has sought reformation of the Agreement, nor has any party otherwise raised
an argument invoking the principles of “unilateral mistake” or “mutual mistake.” Regarding a
unilateral mistake, Maryland law “is clear that, absent intentional, culpable conduct, such as
fraud, duress or undue influence, a unilateral mistake is ordinarily not a ground for relief from a
contract.” Creamer v. Helferstay, 294 Md. 107, 121, 448 A.2d 332, 339 (1982). See Meeks v.
Dashiell, 166 Md. App. 415, 442, 890 A.2d 779, 795 (2006); see also, e.g., Larocca v. Creig
Northrop Team, P.C., 217 Md. App. 536, 552, 94 A.3d 197, 206 (2014).
As for a mutual mistake, a party seeking reformation of a contract bears the burden of
establishing that “(1) the contract as written should not be enforced, either because of a mutual
mistake, or duress or inequitable conduct, and (2) ‘there is clear, convincing and satisfying proof
of a mutual understanding and bargain that has not been accurately expressed.’” Jaguar Land
Rover North America, LLC v. Manhattan Imported Cars, LLC, 2010 WL 3609531, at *8 (D. Md.
Sept. 14, 2010) (quoting City of Baltimore v. De Luca–Davis Constr. Co., 210 Md. 518, 524, 124
A.2d 557, 560 (1956)). In any event, because the parties raise no such arguments, I need not
further address these principles.
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