Vales et al v. Preciado et al
Filing
252
MEMORANDUM OPINION (c/m to Defendants Universal Business Systems, Inc., William H. Camp, Jr., Dorita L. Down, Alma Preciado and Metropolitan Financial Services 8/9/11 sat). Signed by Chief Judge Deborah K. Chasanow on 8/9/11. (sat, Chambers)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
ROGER VALES, et al.
:
v.
:
Civil Action No. DKC 05-3110
:
ALMA PRECIADO, et al.
:
MEMORANDUM OPINION
Presently pending and ready for resolution are two motions
filed by Plaintiffs/Counterdefendants Roger and Lourdes Vales:
a
motion
for
summary
on
Defendant/Counterplaintiff
Alma
Preciado’s counterclaims (ECF No. 244) and a partial motion for
summary judgment on the Valeses’ claims against Defendants (ECF
No. 245).
The court now rules pursuant to Local Rule 105.6, no
hearing being deemed necessary.
For the reasons that follow,
the motion for summary judgment on Preciados’ counterclaim will
be
granted,
while
the
partial
motion
for
summary
judgment
against Defendants will be denied.
I.
Background
A.
Factual Background
The following facts are uncontroverted.1
1
Some of the statements in the affidavits the Valeses
provided – including statements about the intent of Defendants
during the relevant events – are not based on personal
This case traces its beginnings to 2005, when Plaintiff
Lourdes Vales received a one million dollar lump sum retirement
payment.
Early that year, Defendant Alma Preciado approached
Lourdes and her husband, Plaintiff Roger Vales, with a proposal
to use part of their retirement money to fund a loan.
Preciado
operated a mortgage brokerage business as a sole proprietorship
called
which
Metropolitan
the
occasions.
Valeses
Financial
had
Services
previously
(“Metropolitan”)
invested
on
two
with
prior
Both of those prior investments were secured with
real property.
The loan Preciado proposed in January 2005 was similar to
those the Valeses had previously funded.
Preciado solicited
$350,000 on behalf of Harry Down and Defendant Dorita Lemos
Down, two parties Preciado told the Valeses she knew very well.
knowledge.
“An affidavit or declaration used to support or
oppose a motion [for summary judgment] must be made on personal
knowledge.”
Fed.R.Civ.P. 56(c)(4).
While personal knowledge
may include reasonable inferences, “inferences and opinions must
be grounded in observation or other first-hand personal
experience.”
Visser v. Packer Eng’g Assocs., Inc., 924 F.2d
Any statements in the Valeses’
655, 659 (7th Cir. 1991).
affidavits that are not evidently based on such first-hand
experience are not considered here.
In addition, the Valeses’
summary judgment memoranda fail to cite to any particular parts
of the record in supporting their factual positions.
Although
“[t]he court need consider only the cited materials, . . . [it
also] may consider other materials in the record.” Fed.R.Civ.P.
56(c)(3).
2
Preciado
further
“vouched
for
their
financial
strength
and
integrity.”
In March 2005, Preciado presented the Valeses with a loan
application
signed
by
Dorita
Down.
The
loan
application
indicated that the $350,000 loan was to be fully secured by a
piece of property in Bethesda, Maryland valued in excess of
$800,000 (“the Bethesda Property”).
The borrower was listed as
Dorita Lemos Down, who reportedly drew an income of $14,500 a
month as President of Pidegro, LLC.
The Valeses later learned
that Dorita Lemos Down was not on the title to the Bethesda
Property, but Preciado assured the Valeses that Harry Down – the
real landowner - would sign the Note and Deed of Trust at the
time of closing.
Based on those assurances, the Valeses agreed
to fund the loan.
On
April
5,
2005,
the
Valeses
met
with
Preciado
at
Metropolitan’s offices to review the Promissory Note, Deed of
Trust,
and
HUD-1
Settlement
Statement.
Those
documents
reflected that a loan secured by the Bethesda Property was to be
made to Harry Down and Dorita Lemos Down, with BMS Title serving
as
settlement
agent.
The
documents
also
indicated
that
Metropolitan would serve as Trustee for the Deed of Trust on the
Bethesda Property.
Apparently satisfied that everything was in
order, the Valeses provided Preciado with a check for $350,000,
3
which
was
not
to
be
released
until
(1)
all
the
necessary
documents were executed by Harry Down and Dorita Lemos Down and
(2) the Deed of Trust had been recorded to secure fully the
loan.
The Valeses then returned to their home in Florida, with
assurances from Preciado that she would send them the fully
executed loan documents after settlement.
The
Valeses
never
received
the
promised
loan
documents.
Wondering whether the transaction had moved forward, the Valeses
contacted their bank and learned that the $350,000 check had
cleared.
Dorita Lemos Down negotiated the check and deposited
it in a bank account held by Pidegro, LLC.
entity
whose
members
included
Down,
Pidegro, LLC was an
Preciado,
and
Defendant
William Camp.
The Valeses then reached out to Preciado, who initially
said she would speak with BMS Title and forward the completed
loan documents.
documents
and
The Valeses still did not receive any loan
Preciado
began
ignoring
their
phone
calls.
Alarmed, the Valeses returned to Maryland, where they learned
that there was no perfected security interest on the Bethesda
Property and BMS Title had never conducted any $350,000 loan
settlement.
Even so, Metropolitan received a $19,975.33 check
for “settlement charges.”
4
The Valeses subsequently confronted Preciado, who admitted
that Harry Down, the sole owner of the Bethesda Property, was
not
part
of
and
did
not
know
of
the
loan
transaction.
Nevertheless, Preciado gave the $350,000 loan proceeds to Dorita
Down,
despite
the
fact
that
the
loan
documents
were
never
executed and the Deed of Trust was never executed or recorded.
She assured the Valeses that she would place a security interest
against her own real estate.
learned
that
Preciado
had
Unfortunately, the Valeses later
no
real
estate
and
no
security
interest would be forthcoming; all property was titled her in
son’s name.
The Valeses now suggest that the loan was actually a scheme
to
fund
Downses.
Pedigro,
LLC
rather
than
a
legitimate
loan
to
the
They insist that they never would have funded the loan
had they known of Preciado’s business involvement with Pidegro,
LLC or that Harry Down was not actually involved in the loan
transaction.
B.
Procedural Background
This case has a long procedural history that is more fully
described in previous opinions.
It began when Preciado, on
behalf of herself and Metropolitan and for the claimed benefit
of
the
Valeses,
filed
a
complaint
in
the
Circuit
Court
for
Montgomery County against Dorita Lemos Down, Harry Down, Camp,
5
Pidegro, LLC, and Harry Down.
The defendants in that action
removed the case to this court based on diversity jurisdiction.
See Preciado v. Vales, No. DKC 05-2339.
On November 16, 2006,
the Valeses filed suit in this court against Preciado; Dorita
Lemos Down; Camp; Pidegro, LLC; and Pidegro, Ltd. alleging fraud
in connection with the loan transaction.
Preciado, et al., No. DKC 05-3110.
on
April
against
6,
the
The cases were consolidated
2006.
Preciado
filed
Valeses
on
28,
July
prosecution and defamation.
See Vales, et al. v.
an
2006
amended
counterclaim
asserting
malicious
The Valeses have also twice amended
their complaint.
On July 24, 2008, Preciado was indicted in the Circuit
Court
for
Montgomery
County
on
four
counts:
embezzlement,
perjury, theft of over $500, and fraudulent practices.
State v. Preciado, No. 08-7015-00118-3.
count
of
embezzlement
(fraudulent
fiduciary) on June 12, 2009.
See
She pled guilty to one
misappropriation
by
a
In connection with the guilty
plea, the state court entered a judgment of restitution against
Preciado for $350,000, payable to the Valeses.
Just
days
before
her
criminal
indictment,
on
July
21,
Preciado filed for Chapter 7 bankruptcy in the U.S. Bankruptcy
Court for the District of Maryland.
19367.
See In re Preciado, No. 08-
The Valeses then initiated an adversary case in the
6
bankruptcy
court
on
October
20,
2008,
which
sought
a
determination that Preciado owed the Valeses $350,000 in nondischargeable debt.
See Vales v. Preciado, No. 08-00764.
Judge
Lipp concluded that the debt was non-dischargeable and entered
her
own
order
of
judgment
for
$350,000
plus
costs
and
pre-
judgment interest, retroactive to April 5, 2000.
The
Valeses
have
now
filed
judgment, both on October 18, 2010.
two
motions
for
summary
In the first, they seek
summary judgment on Preciado’s counterclaims.
(ECF No. 244).
In the first page of the second motion, the Valeses request
summary judgment on Counts I, II, III, VI, and VII of their own
complaint.
(ECF No. 245).
The supporting memorandum, however,
seeks summary judgment against only Preciado and only on two
counts:
count III (constructive fraud) and count VI (breach of
fiduciary duty).
punitive
damages.
The memorandum also reserves the issue of
In
response
to
both
received a letter from Dorita Lemos Down.2
other opposition or reply was filed.3
motions,
the
court
(ECF No. 249).
No
(ECF No. 250).
2
Later, on November 15, 2010, the Valeses also
submitted certain additional exhibits in support of their
motions. (ECF No. 250).
3
Pursuant to the requirements of Roseboro v. Garrison,
528 F.2d 309 (4th Cir. 1975), the court notified all Defendants
that the Valeses had filed a dispositive motion. (ECF Nos. 24648). The court also informed Defendants that they were entitled
7
II.
Standard of Review
The
Valeses
have
moved
for
summary
judgment
pursuant to Federal Rule of Civil Procedure 56.
(twice)
A court may
enter summary judgment only if there is no genuine issue as to
any material fact and the moving party is entitled to judgment
as a matter of law.
See Fed.R.Civ.P. 56(a); Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986); Emmett v. Johnson, 532 F.3d
291, 297 (4th Cir. 2008).
Summary judgment is inappropriate if
any material factual issue “may reasonably be resolved in favor
of either party.”
242,
250
(1986);
Anderson v. Liberty Lobby, Inc., 477 U.S.
JKC
Holding
Co.
LLC
v.
Washington
Sports
Ventures, Inc., 264 F.3d 459, 465 (4th Cir. 2001).
“A party opposing a properly supported motion for summary
judgment ‘may not rest upon the mere allegations or denials of
[his]
pleadings,’
but
rather
must
‘set
forth
specific
showing that there is a genuine issue for trial.’”
facts
Bouchat v.
Baltimore Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir.
2003) (quoting former Fed.R.Civ.P. 56(e)).
proof
.
.
.
will
not
suffice
to
prevent
“A mere scintilla of
summary
Peters v. Jenney, 327 F.3d 307, 314 (4th Cir. 2003).
judgment.”
“If the
to file materials in opposition within 17 days from the date of
the letter and that summary judgment could be entered if they
did not establish a genuine dispute of material fact. (Id.).
8
evidence is merely colorable, or is not significantly probative,
summary judgment may be granted.”
249-50.
(citations omitted).
construe
the
favorable
to
facts
the
that
party
Liberty Lobby, 477 U.S. at
At the same time, the court must
are
presented
opposing
the
in
the
motion.
light
See
most
Scott
v.
Harris, 550 U.S. 372, 378 (2007); Emmett, 532 F.3d at 297.
III. Motion for Summary Judgment on Preciado’s Counterclaim
The Valeses first move for summary judgment on Preciado’s
counterclaims
of
malicious
prosecution
and
defamation.
Preciado’s amended countercomplaint contends that the Valeses
engaged in malicious prosecution by swearing out an application
for criminal charges in 2005 based on her alleged theft of the
$350,000 loan.
(That case was ultimately nolle processed).
In
addition, the countercomplaint asserts that the Valeses defamed
Preciado by telling others that Preciado had been arrested and
charged with theft because she stole $350,000 from them.
The
Valeses respond that Preciado has not established the malice and
untruthfulness necessary to sustain her claims.
First is the malicious prosecution claim.
prosecution
defendant(s)
case,
a
plaintiff
instituted
a
must
criminal
establish
In a malicious
that:
proceeding
“1)
the
against
the
plaintiff; 2) the criminal proceeding was resolved in favor of
the
plaintiff;
3)
the
defendant(s)
9
instituted
the
criminal
proceeding without probable cause; and 4) the defendant(s) acted
with malice or for the primary purpose other than bringing the
plaintiff to justice.”
(2003).
S. Mgmt. Corp. v. Taha, 378 Md. 461, 479
The Valeses argue that they possessed probable cause
when initiating the proceeding and were not motivated by malice.
The Valeses are correct that Preciado fails to bring forth
any grounds for denying summary judgment; indeed, the relevant
facts are directly to the contrary.
The Valeses served several
requests for admissions on Preciado on August 23, 2010.
(ECF
No. 236).
Rule
Preciado did not respond to any of them.
36(a)(3) provides that a matter is deemed admitted when a party
fails to respond to such a request within 30 days.
As this
court long ago held:
It is clear that unanswered requests for
admissions may properly serve as a basis for
summary judgment and with a failure to make
a timely response, the truth of the matter
contained in the request for admission is
conclusively established and may serve as
the basis for the court’s consideration of a
motion for summary judgment.
Donovan v. Peter, 584 F.Supp. 202, 207-08 (D.Md. 1984) (citing
Bateson v. Porter, 154 F.2d 566 (4th Cir. 1946)); accord Quasius
v.
Schwan
Food
Co.,
596
F.3d
947,
950-52
(8th
Cir.
2010);
Gabbanelli Accordions & Imports, LLC v. Gabbanelli, 575 F.3d
693, 696 (7th Cir. 2009); Conlon v. United States, 474 F.3d 616,
621 (9th Cir. 2007).
In the nearly one year that has passed,
10
Preciado
has
not
raised
any
objections
to
the
requests
for
admission, has not sought an extension of time to answer them,
has not sought to rescind them, and has not challenged them on
summary judgment.
Consequently, the admissions will be deemed
admitted in evaluating this motion.
Preciado “had no excuse for
ignoring [her] opponent’s request for admissions long, long past
the deadline.”
Several
of
Gabbanelli, 575 F.3d at 696.4
the
admissions
malicious prosecution.
directly
refute
any
claim
of
Among other things, Preciado has now
admitted (1) that the allegations in her counterclaim were not
true; (2) that all the information in the criminal Application
for Statement of Charges was true and correct; and (3) that she
did in fact steal $350,000 for the Valeses, committing the crime
of theft.
(ECF No. 244-1, at 22-25).
admissions
evidence
that
the
Valeses’
4
At the very least, these
had
probable
cause
to
The Valeses exceeded the limit on requests for
admission set under Local Rule 104.1. That rule provides that,
“[u]nless otherwise ordered by the Court, or agreed upon by the
parties, no party shall serve upon the other party, at one (1)
time or cumulatively, . . . more than thirty (30) requests for
admission (other than requests propounded for the purpose of
establishing the authenticity of documents or the fact that
documents constitute business records), including all parts and
sub-parts.” The limit does not defeat the Valeses’ motion here
because no objection was raised.
11
initiate the criminal action.5
Summary judgment must be granted
on the malicious prosecution claim.
Second is the associated claim for defamation.
To prove
defamation, a plaintiff must show “(1) that the defendant made a
defamatory statement to a third person, (2) that the statement
was false, (3) that the defendant was legally at fault in making
the statement, and (4) that the plaintiff thereby suffered harm.
Indep.
Newspapers,
Inc.
v.
(quotation marks omitted).
Brodie,
407
Md.
415,
441
(2009)
Here again, the Valeses submitted
several unanswered requests for admission that are decisive on
this
issue.
Preciado,
for
instance,
admits
that
her
counterclaim was untrue; that the actions taken and statements
made
by
defamation
the
of
Valeses
[her]
by
were
reasonable;
either
Roger
that
Vales
or
“there
was
Lourdes
no
Vales
because all of the statements that they have made have been
completely true;” and that she suffered no harm.
5
(ECF No. 244-
It is of no moment that Preciado’s earlier, verified
counterclaim contained contrary facts. “A matter admitted under
this rule is conclusively established.”
Fed.R.Civ.P. 36(b)
(emphasis added).
As one court of appeals has put it, “[t]he
binding nature of judicial admissions conserves judicial
resources by avoiding the need for disputatious discovery on
every conceivable question of fact.
Once a fact is formally
admitted and thereby set aside in the discovery process, the
party requesting an admission is entitled to rely on the
conclusiveness.” Armour v. Knowles, 512 F.3d 147, 154 n.12 (5th
Cir. 2007) (quotation marks omitted).
12
1, at 24-25).
These admissions “conclusively establish” that
the statements were not false and did not cause any harm, two of
the
essential
elements
of
the
tort.
Accordingly,
summary
judgment must be granted as to this counterclaim as well.
IV.
Motion for Partial Summary Judgment on the Vales’ Complaint
The Valeses have also moved for summary judgment on several
counts of their own complaint.
Plaintiffs obviously have the
ability to move for summary judgment.
Bouchat, 346 F.3d at 521-
22 (“Rule 56 expressly contemplates the availability of summary
judgment to a claimant.
That a movant bears the ultimate burden
of proof or persuasion. . . is no obstacle to a summary judgment
award in favor of that party, so long as the requirements of
Rule 56 are otherwise satisfied.”).
bear
the
summary
burden
of
judgment
proof
takes
at
on
Still, because they would
trial,
a
the
slightly
Valeses’
different
motion
for
procedural
posture than their defensive motion for summary judgment.
In
particular,
on
the
Valeses
are
entitled
to
summary
judgment
their claims only if “the proffered evidence is such that a
rational factfinder could only find for” them.
Smith v. Ozmint,
578 F.3d 246, 250 (4th Cir. 2009); see also Turner v. Kight, 192
F.Supp.2d 391, 398 (D.Md. 2002) (“A party who bears the burden
of
proof
on
a
particular
claim
must
element of his or her claim.”).
13
factually
support
each
As was noted above, the Valeses’ motion asks for summary
judgment
on
Defendants.
same
relief.
Counts
I,
II,
(ECF No. 245).
(ECF
No.
III,
VI,
and
VII
against
all
The proposed order suggests the
245-4).
The
supporting
memorandum,
however, only refers to two counts – count III (constructive
fraud) and count VI (breach of fiduciary duty).
The Valeses
have not even attempted to establish that there is no dispute of
genuine material fact on any other counts against any other
defendants.
A fleeting request for summary judgment that is
otherwise wholly unsupported and unexplained does not satisfy
the requirements of Rule 56.
See Fed.R.Civ.P. 56 (requiring
movant to identify each claim or defense upon which judgment is
sought and establish that there is no genuine dispute of fact).
Even where, as here, some or all of the defendants fail to
oppose, “summary judgment in favor of [p]laintiffs may still be
inappropriate
if
their
rendering judgment.”
evidence
is
too
scanty
to
justify
McIntyre v. Robinson, 126 F.Supp.2d 394,
403 (D.Md. 2000).6
6
It may be that there is evidence supporting the
Valeses’ claims in their affidavits and other submissions. But
lacking any guidance or argument, the court cannot construct
their claims for them. See Jurgenson v. Albin Marine, Inc., 214
F.Supp.2d 504, 510 (D.Md. 2002) (Davis, J.) (explaining that the
court is not required to “scour the record” on summary
judgment).
14
As for the two counts against Preciado that are properly
presented,
the
Valeses
seek
a
judgment
of
$350,000
against
Preciado while reserving the issue of punitive damages.
No.
245-4).
entered
by
Yet
the
the
Valeses
Circuit
Court
already
for
hold
two
Montgomery
(ECF
judgments
County
and
–
the
United States Bankruptcy Court for the District of Maryland –
that award them the $350,000 that they now seek for a third
time.
There
judgment
would
is
be
no
apparent
necessary.
reason
The
why
a
ordinary
third
rule
duplicative
is
that
“a
judgment between the same parties . . . is a final bar to any
other suit upon the same cause of action.”
Alvey v. Alvey, 225
Md. 386, 390 (1961); see also Anne Arundel Cnty. Bd. of Educ. v.
Norville, 390 Md. 93, 108 (2005).
the
cause
of
action,
which
“The judgment puts an end to
cannot
again
be
brought
into
litigation between the parties upon any ground whatever, absent
fraud or some other factor invalidating the judgment.”
v. Sunnen, 333 U.S. 591, 597 (1948).
Comm’r
It is also irrelevant that
the present action potentially advances different legal theories
against Preciado; a party may not recover twice for a single
injury, even if the party asserts multiple theories of recovery.
See, e.g., Montgomery Ward & Co., Inc. v. Cliser, 267 Md. 406,
425 (1972) (“It is generally recognized that there can be only
one
recovery
of
damages
for
one
15
wrong
or
injury.
Double
recovery of damages is not permitted; the law does not permit a
double satisfaction for a single injury.
A plaintiff may not
recover damages twice for the same injury simply because he has
two
legal
generally
theories.
not
. .
.
permissible,
The
and
a
overlapping
person
is
of
damages
is
not
entitled
to
recover twice for the same elements of damage growing out of the
same occurrence or event.” (quotation marks omitted)).
In short, it would appear that any claim against Preciado
for compensatory damages based on the $350,000 misappropriated
should be dismissed.
Therefore, the Valeses will be ordered to
show cause within 14 days why any such claims should not be
dismissed.
Summary judgment for the Valeses will not be granted
on those claims at this time.
V.
Conclusion
For the foregoing reasons, the motion for summary judgment
on Preciados’ counterclaim will be granted, while the partial
motion for summary judgment against Defendants will be denied.
A separate order will follow.
/s/
DEBORAH K. CHASANOW
United States District Judge
16
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