The Harry and Jeanette Weinberg Foundation, Inc. v. St. Marks Avenue, LLC et al

Filing 144

MEMORANDUM OPINION. Signed by Judge George Levi Russell, III on 6/21/2017. (c/m 6/21/17 bas, Deputy Clerk) .

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
THE HARRY AND JEANETTE WEINBERG :
FOUNDATION, INC.,
:
Plaintiff,
:
v.
:
ST. MARKS AVENUE, LLC, et al.,
:
Defendants.

Civil Action No. GLR-15-3525

MEMORANDUM OPINION
THIS MATTER is before the Court on Defendants’, St. Marks
Avenue, LLC (“St. Marks”) and William Spivey (collectively, the
“St. Marks Defendants”), Motion for Partial Summary Judgment (ECF
No.

59)

and

Plaintiff’s,

The

Harry

and

Jeanette

Weinberg

Foundation, Inc. (the “Foundation”), Motion for Partial Summary
Judgment (ECF No. 77).

This action arises from an agreement the

Foundation entered into with Defendant Communities Organized to
Improve Life, Inc. (“COIL”) to develop property

located at 1200

West Baltimore Street, Baltimore, Maryland 21223 (the “Property”),
COIL’s

principal

address,

and

COIL’s

subsequent

sale

of

the

Property to St. Marks.
The Motions are ripe for disposition, and no hearing is
necessary.

See Local Rule 105.6 (D.Md. 2016).

For the reasons

outlined below, the Court will deny the St. Marks Defendants’
Motion without prejudice in part and grant the Motion in part.

The

Court will also deny the Foundation’s Motion without prejudice and
provide the Foundation an opportunity to move for leave to file a
second amended complaint.

I.
The

Foundation

is

a

BACKGROUND1
private

Maryland

organization

that

provides grants to organizations that offer direct services to
disadvantaged and vulnerable individuals.
57).

(Am. Compl. ¶ 3, ECF No.

Smith is the Chief Executive Officer and registered agent of

COIL, a not-for-profit corporation organized under Maryland law.
(Id. ¶¶ 6, 7).

This matter involves the sale of the Property,

COIL’s principal address.

(Id. ¶¶ 6, 18–21).

On February 7, 1996,

the Foundation entered into an agreement with COIL to develop the
Property

and

“Agreement”).

granted

COIL

$675,000

(Id. ¶¶ 13, 14).

for

its

development

(the

The Agreement also gave COIL the

limited right to display “The Harry & Jeanette Weinberg” (the
“Sign”) on the Property after construction ended; the Agreement
required COIL to display the Sign through the present day.
¶ 16).

(Id.

The Agreement further stated that COIL may not sell the

property without prior written consent from the Foundation.

(Id. ¶

15).2
On April 3, 2013, COIL sold the Property to St. Marks, a New
York company, for $1,000,000 without the Foundation’s consent (the
“Sale”).

1

(Id. ¶¶ 4, 18–21).

The same day, St. Marks leased the

Unless otherwise noted, the facts outlined here are set
forth in the Foundation’s Complaint (ECF No. 1). To the extent the
Court discusses facts that the Foundation does not allege in its
Complaint, they are uncontroverted and the Court views them in the
light most favorable to the non-moving party. The Court will
address additional facts when discussing applicable law.
2
Additional facts regarding the Agreement are set forth in
2

Property to COIL (the “Lease”).
D [“Lease”], ECF No. 59-2).

(Defs.’ Mot. Partial Summ. J. Ex.

On November 13, 2014, the Foundation

sent a letter to Smith and Defendant Spivey, the sole member of St.
Marks, stating that it was ceasing any further engagement with COIL
and requesting that the Sign be removed from the exterior of the
Property.

(Am. Compl. ¶¶ 21, 22).

On January 12, 2016, counsel

for the St. Marks Defendants sent the Foundation a letter giving
the Foundation permission to remove the Sign from the Property
(“January 2016 Letter”).
Letter”], ECF No. 9-1).

(Defs.’ Mot. Dismiss Ex. 1 [“Jan. 2016
COIL occupied the Property under the Lease

until May 4, 2016, when the District Court for Baltimore City,
Maryland evicted COIL from the Property.
No. 59-2).

(Spivey Dec. ¶ 14, ECF

St. Marks then removed the Sign from the Property.

(Id. ¶ 15; Defs.’ Mot. Partial Summ. J. Exs. G & H, ECF No. 59-2).
On November 19, 2015, the Foundation sued the St. Marks
Defendants and Smith, alleging claims for False Endorsement under
Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (2012) (Count
I), Breach of Contract (Count II), Civil Conspiracy (Count III),
and as to COIL and Smith only, Accounting (Count IV).
No. 1).

(Compl., ECF

On February 4, 2016, the St. Marks Defendants filed a

Motion to Dismiss and attached the January 2016 Letter as an
exhibit in support of their Motion.

(ECF Nos. 8–9; ECF No. 9-1).

The Court eventually denied the Motion.

this Court’s May 16, 2016 Order.

(ECF No. 24).

(See ECF No. 24).
3

On December 12, 2016, the St. Marks Defendants filed a Motion
for Partial Summary Judgment against the Foundation.

(ECF No. 59).

On January 9, 2017, the Foundation filed a Response, (ECF No. 66),
and on February 3, 2017, the St. Marks Defendants filed a Reply,
(ECF No. 72).

On February 9, 2017, the Foundation filed a Motion

for Partial Summary Judgment against the St. Marks Defendants,
COIL, and Smith.

(ECF No. 77).

The Motion was fully briefed as of

April 10, 2017 as to the St. Marks Defendants and Smith.
Nos. 97, 101, 123).

COIL did not file a Response.
II.

A.

(See ECF

DISCUSSION

Standard of Review
In reviewing a motion for summary judgment, the Court views

the facts in a light most favorable to the nonmovant, drawing all
justifiable inferences in that party’s favor.

Ricci v. DeStefano,

557 U.S. 557, 586 (2009); Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 255 (1986) (citing Adickes v. S.H. Kress & Co., 398 U.S. 144,
158–59 (1970)).

Summary judgment is proper when the movant

demonstrates, through “particular parts of materials in the record,
including
information,

depositions,
affidavits

documents,
or

electronically

declarations,

stipulations

stored
.

.

.

admissions, interrogatory answers, or other materials,” that “there
is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a),
(c)(1)(A).

Significantly, a party must be able to present the
4

materials

it

cites

in

“a

form

that

would

be

admissible

in

evidence,” Fed.R.Civ.P. 56(c)(2), and supporting affidavits and
declarations “must be made on personal knowledge” and “set out
facts that would be admissible in evidence,” Fed.R.Civ.P. 56(c)(4).
Once a motion for summary judgment is properly made and
supported, the burden shifts to the nonmovant to identify evidence
showing there is genuine dispute of material fact.

See Matsushita

Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586–87
(1986).

The nonmovant cannot create a genuine dispute of material

fact “through mere speculation or the building of one inference
upon another.”

Beale v. Hardy, 769 F.2d 213, 214 (4th Cir. 1985)

(citation omitted).
A “material fact” is one that might affect the outcome of a
party’s case.

Anderson, 477 U.S. at 248; see also JKC Holding Co.

v. Wash. Sports Ventures, Inc., 264 F.3d 459, 465 (4th Cir. 2001)
(citing Hooven-Lewis v. Caldera, 249 F.3d 259, 265 (4th Cir.
2001)).

Whether

a

fact

is

considered

to

be

“material”

is

determined by the substantive law, and “[o]nly disputes over facts
that might affect the outcome of the suit under the governing law
will properly preclude the entry of summary judgment.”
477 U.S. at 248; accord Hooven-Lewis, 249 F.3d at 265.

Anderson,
A “genuine”

dispute concerning a “material” fact arises when the evidence is
sufficient to allow a reasonable jury to return a verdict in the
nonmoving party’s favor.

Anderson, 477 U.S. at 248.

If the

nonmovant has failed to make a sufficient showing on an essential
5

element of her case where she has the burden of proof, “there can
be ‘no genuine [dispute] as to any material fact,’ since a complete
failure of proof concerning an essential element of the nonmoving
party’s case necessarily renders all other facts immaterial.”
Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986).
B.

Analysis
1.

The St. Marks Defendants’ Motion

In their Motion for Partial Summary Judgment, the St. Marks
Defendants argue that the Court should enter judgment in their
favor on Counts I, II, and III.

The Court addresses each Count in

turn.
a.

Count I (False Endorsement)

The St. Marks Defendants argue that the Court should enter
judgment in their favor on the False Endorsement claim because
there

is

no

dispute

that

COIL,

controlled removal of the Sign.
To

review,

summary

as

tenant

of

the

Property,

The Court disagrees.

judgment

is

proper

when

the

movant

demonstrates that “there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a)(emphasis added).

Whether a fact is considered

to be “material” is determined by the substantive law, and “[o]nly
disputes over facts that might affect the outcome of the suit under
the governing law will properly preclude the entry of summary
judgment.”

Anderson, 477 U.S. at 248.
6

Here, the St. Marks

Defendants do not make any attempt to describe substantive law
governing false endorsement claims.

Nor do they explain how

control of the Sign is a material fact which affects the outcome of
the False Endorsement claim.

Thus, the Court is currently unable

to determine whether control of the Sign can be considered a
material fact.

See Anderson, 477 U.S. at 248.

Accordingly, the

Court will deny the St. Marks Defendants’ Motion without prejudice
as to Count I.
b.

Count II (Breach of Contract)

The St. Marks Defendants contend that the Court should enter
judgment in their favor on the Breach of Contract claim because
they were not parties to the Agreement.

The Foundation disagrees,

arguing that the Sale was invalid because as recipients of the
Property from the Sale, the St. Marks Defendants are required
parties under Rule 19(a)(1).

But the Foundation brings no claim

under which the Court can invalidate the Sale.

The Foundation

brings only three claims: (1) False Endorsement, related to the
Sign; (2) Breach of Contract, related to COIL’s alleged breach of
the Agreement with the Foundation; and (3) Civil Conspiracy, also
related to the Sign.

In fact, nowhere in the Complaint is there

any allegation that Smith did not have the proper authority to
execute the Sale with St. Marks.

Thus, the Court will not consider

whether the Sale was invalid, and in turn, whether the St. Marks
Defendants are required parties.
7

Under Maryland law,3 a plaintiff alleging a breach of contract
“must of necessity allege with certainty and definiteness facts
showing [1] a contractual obligation owed by the defendant to the
plaintiff and a [2] breach of that obligation by defendant.”

Polek

v. J.P. Morgan Chase Bank, N.A., 36 A.3d 399, 416 (Md. 2012)
(quoting Cont’l Masonry Co. v. Verdel Constr. Co., 369 A.2d 566,
569 (Md. 1977)) (internal quotation marks omitted).

Here, it is

undisputed that the St. Marks Defendants were not parties to the
Agreement.
78-7).

(See Mem. Mot. Partial Summ. J. Ex. G at 12, ECF No.

Nor is there any evidence that the St. Marks Defendants

owed the Foundation any other contractual obligation applicable to
the Sale.

Thus, the Court concludes that the St. Marks Defendants

are entitled to judgment as a matter of law on the Breach of
Contract claim.

Accordingly, the Court will grant the St. Marks

Defendants’ Motion as to Count II.
c.

Count III (Civil Conspiracy)

The St. Marks Defendants argue that the Court should enter
judgment in their favor on the Civil Conspiracy claim because they
are entitled to judgment on two underlying torts: False Endorsement
and Breach of Contract.

The Court agrees in part.

In Maryland, civil conspiracy requires an underlying tort.
See, e.g., Nero v. Mosby, No. MJG-16-1288, 2017 WL 386537, at *10
(D.Md. Jan. 27, 2017) (“The Court of Appeals has ‘consistently held

3

The parties agree that Maryland law applies to this action.
8

that “conspiracy” is not a separate tort capable of independently
sustaining an award of damages in the absence of other tortious
injury to the plaintiff.’” (quoting Alleco Inc. v. Harry & Jeanette
Weinberg Foundation, Inc., 665 A.2d 1038, 1045 (Md. 1995))).

As a

result, because the St. Marks Defendants are not entitled to
judgment as a matter of law on the False Endorsement claim, they
are not entitled to judgment as a matter of law on the Civil
Conspiracy claim to the extent that it is premised on the False
Endorsement claim.

But because the St. Marks Defendants are

entitled to judgment as a matter of law on the Breach of Contract
claim, they are entitled to judgment as a matter of law on the
Civil Conspiracy claim to the extent that it is premised on a
breach of contract.
Accordingly, the Court will deny the St. Marks Defendants’
Motion without prejudice as to Count III to the extent it is based
on the False Endorsement Claim and grant the Motion as to Count III
to the extent it is based on the Breach of Contract Claim.
2.

The Foundation’s Motion

As with the Foundation’s Response to the St. Marks Defendants’
Motion as to Count II, in its Motion, the Foundation argues that
the Sale is invalid because Smith violated COIL’s by-laws when she
allegedly executed the Sale, making her actions on behalf of COIL
unauthorized.

Because this new claim is not currently before the

Court, for the same reasons described above, the Court will not
9

consider it.4

The Court, therefore, will deny the Foundation’s

Motion without prejudice and give the Foundation an opportunity to
move

for

leave

to

file

a

second

amended

complaint.

See

Fed.R.Civ.Proc. 15(a)(2) (permitting a party to amend its pleading
with the court’s leave after amending its pleading once as a matter
of course).
III. CONCLUSION
For

the

foregoing

reasons,

the

Court

will

deny

without

prejudice in part and grant in part the St. Marks Defendants’
Motion for Partial Summary Judgment (ECF No. 59). The Motion is
denied without prejudice as to the False Endorsement claim and the
Civil Conspiracy claim to the extent that it is premised on the
False Endorsement claim.

The Motion is granted as to the Breach of

Contract claim and the Civil Conspiracy claim to the extent that it
is premised on a breach of contract.

The Court will deny without

prejudice the Foundation’s Motion for Partial Summary Judgment (ECF
No. 77).

The Foundation will have fifteen days from the date of

this Memorandum Opinion to move for leave to file a second amended
complaint, if it so chooses.

4

A separate Order follows.

The Foundation also argues that COIL breached paragraph 1(c)
of the Agreement by failing to transfer the Property to a not-forprofit entity when COIL dissolved. As relief, the Foundation asks
the Court to donate the Property to a qualifying entity directly or
through a court-appointed receiver. Because neither this alleged
breach nor the requested relief is described anywhere in the
Complaint, neither is currently before the Court and the Court will
not consider them.
10

Entered this 21st day of June, 2017
/s/
________________________
George L. Russell, III
United States District Judge

11