Oak Plaza, LLC v. Buckingham et al

Filing 107

MEMORANDUM OPINION. Signed by Judge Deborah K. Chasanow on 3/26/2024. (sat, Chambers)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:

OAK PLAZA, LLC

:

v.

:

DAVID T. BUCKINGHAM, et al.

Civil Action No. DKC 22-0231

:
:

MEMORANDUM OPINION
Presently pending and ready for resolution in this state law
fraud case brought by the receiver for a limited liability company
are a joint motion for summary judgment filed by Defendants David
Buckingham, Richard Buckingham, Susan Buckingham (collectively,
“the Siblings”), and Philip McNutt (“Mr. McNutt”), (ECF No. 82);
and a cross-motion for summary judgment filed by Plaintiff Oak
Plaza, LLC (“Oak Plaza”), derivatively and on behalf of Tower Oaks
Boulevard, LLC (“Tower Oaks”), (ECF No. 96).

The issues have been

briefed in part, and the court now rules solely on some of the
liability issues, no hearing being deemed necessary.
105.6.

Local Rule

For the following reasons, Defendants’ joint motion for

summary judgment will be denied; and Plaintiff’s cross-motion for
summary judgment will be granted in part and denied in part. 1

As

Defendants’ motion to exceed page limits is also pending.
(ECF No. 99). That unopposed motion will be granted. Defendants’
motion requesting a hearing on the parties’ cross-motions for
summary judgment will be denied. (ECF No. 105).
1

will

be

seen,

in

this

long,

winding,

and

contentious

family

dispute, the pending motions are at times incomplete or confusing
and final resolution of this action is not attainable on this
record.

The parties will be directed to brief the remaining

issues, after which further proceedings can be scheduled.
I.

Background
The following facts are undisputed unless otherwise noted.

This case involves the Buckingham family, their now dissolved
limited

liability

company,

Oak

Plaza,

and

its

wholly

owned

subsidiary, Tower Oaks. 2
Oak Plaza is a Maryland limited liability company established
by John D. Buckingham (“Mr. Buckingham”), his wife Elizabeth
Buckingham (“Mrs. Buckingham”), and their five children: John
Daniel Buckingham, Jr. (“Daniel Buckingham”), Thomas Buckingham,
Susan Buckingham, David Buckingham, and Richard Buckingham.

(ECF

Nos. 104-3, at 1; 87-1, at 1, 22-23; 104-6, at 1, 22-24; 96-7, at
1, 22-24).

According to Oak Plaza’s Operating Agreement (the “Oak

Plaza Operating Agreement”), the purpose of Oak Plaza is “to
As explained in a prior opinion, the Buckingham family and
its various companies have been the subject of several lawsuits in
the last decade. Oak Plaza, LLC v. Buckingham, No. 22-cv-231-DKC,
2023 WL 2537661, at *1 n.3 (D.Md. Mar. 16, 2023). For more complete
discussions of Oak Plaza, Tower Oaks, and the Buckingham family,
see Oak Plaza, LLC v. Buckingham, No. 22-cv-0231-DKC, 2022 WL
1591404 (D.Md. May 19, 2022); Tower Oaks Blvd., LLC v. Procida,
219 Md.App. 376 (2014); and 121 Assocs. Ltd. P’ship v. Tower Oaks
Blvd., LLC, Nos. 0906 and 1454, 2015 WL 7076013 (Md.App.Ct. Nov.
12, 2015).
2

2

acquire and hold all outstanding membership interests in [Tower
Oaks]” and through Tower Oaks, manage a parcel of land located in
Rockville, Maryland (the “Tower Oaks Building”).
6, at 5-6; 87-1, at 5-6; 96-7, at 5-6).

(ECF Nos. 104-

As a result of a 2007

amendment to the Oak Plaza Operating Agreement, Oak Plaza’s members
consisted

of

Buckingham,

Daniel

Richard

Buckingham.

Buckingham,
Buckingham,

Thomas
Susan

(ECF No. 104-7, at 7).

Buckingham,

Buckingham,

and

David
Mr.

The Oak Plaza Operating

Agreement designated Mr. Buckingham as the initial manager until
his death or resignation, after which Mrs. Buckingham, Thomas
Buckingham, and Daniel Buckingham will become joint managers. (ECF
Nos. 104-6, at 13; 87-1, at 13; 96-7, at 13).
has

“full,

exclusive,

and

complete

Oak Plaza’s manager

discretion,

power,

and

authority, subject to the requirements of applicable law, to
manage, control, administer, and operate the business and affairs
of [Oak Plaza.]”

(ECF Nos. 104-6, at 13; 87-1, at 13; 96-7, at

13).
Tower Oaks’ sole member is Oak Plaza.
46).

(ECF No. 104-4, at

Tower Oaks’ Operating Agreement (the “Tower Oaks Operating

Agreement”), as amended, designated Mr. Buckingham as the manager
of Tower Oaks.
required

that

(Id. at 39). The Tower Oaks Operating Agreement
all

“major

decisions”

of

Tower

Oaks—including

decisions related to its “property and . . . assets”—must be
approved by Oak Plaza.

(See ECF Nos. 104-4, at 28-29; 104-5, at
3

3-4; 83-1, at 3-4).

Otherwise, Tower Oaks’ manager “shall have

complete and exclusive control of the management of [Tower Oaks’]
business and affairs[.]”

(ECF No. 104-4, at 28; 104-5, at 3; 83-

1, at 3).
On April 8, 2009, Mr. Buckingham was determined legally
incompetent as a result of severe dementia.

(ECF No. 83-6 ¶¶ 5-

10). Mrs. Buckingham and David Buckingham were appointed temporary
co-guardians

of

Mr.

Buckingham

pursuant

to

an

October

2010

temporary guardianship order, (ECF No. 83-7, at 2), which was
modified in December 2010 to appoint David Buckingham the temporary
guardian of Mr. Buckingham’s property responsible for managing Mr.
Buckingham’s financial affairs, (ECF No. 87-5, at 2).
2011, Mrs. Buckingham passed away.

In December

(ECF No. 93-4 ¶ 11).

On October 17, 2012, Mr. Buckingham passed away.

(Id. ¶ 42).

Thomas Buckingham ceased to be a member of Oak Plaza after he
declared bankruptcy in 2012, 2015, and 2016.

(ECF Nos. 96-4, at

4; 104-3, at 4).
On September 10, 2012, Tower Oaks sued several defendants—
including a company named Ronald Cohen Investments—in the Circuit
Court for Montgomery County (the “Circuit Court”).

See Docket,

Tower Oaks Blvd., LLC v. Ronald Cohen Invs., Inc. et al., No.
368256V

(Circuit

Court

for

Montgomery

County)

(the

“Cohen

Litigation”); (ECF No. 86-8, at 27). Between approximately October
2016 through May 2021, Tower Oaks was represented by Mr. McNutt in
4

the Cohen Litigation, which was brought by David Buckingham with
the support of Susan and Richard Buckingham.
at 1; 93-4 ¶¶ 40, 63, 67; 93-3 ¶ 8).

(See ECF Nos. 84-3,

On May 23, 2014, the Cohen

Litigation resulted in a multi-million-dollar judgment (the “Cohen
Litigation Judgment”) in Tower Oaks’ favor.

(ECF Nos. 96-5 at 5;

104-4, at 5).
In late 2015, Richard Buckingham, as Tower Oaks’ purported
manager,

executed

three

assignments

of

the

Cohen

Litigation

Judgment (the “2015 Assignments”) to Susan Buckingham as Trustee
of the Cardinal Trust, David Buckingham, and Richard Buckingham.
(See ECF Nos. 96-5, at 49-54; 85-4).

On approximately February

14, 2017, the Siblings, as purported managers of Tower Oaks, signed
an “Agreement to Escrow Funds[,]” with Mr. McNutt serving as the
escrow agent.

(ECF Nos. 93-3 ¶¶ 53, 92; 96-5, at 6, 55-56; 104-

4, at 6, 55-56).

On March 6, 2017, Mr. McNutt picked up a check

containing funds partially satisfying the judgment in the Cohen
Litigation (the “Funds”) from the Circuit Court’s Court Registry
made payable to Tower Oaks and later deposited the check in a bank
account (the “Bank Account”) in Tower Oaks’ name at Access National
Bank in Virginia.

(ECF Nos. 96-5 at 6; 104-4, at 6).

At the

Siblings’ direction, Mr. McNutt disbursed the Funds to the Siblings
on three separate dates: March 14, 2017, April 16, 2018, and
January 16, 2019.

(See ECF Nos. 93-3 ¶ 91; 104-13, at 16, 21,

5

31).

Mr. McNutt also disbursed the Funds to himself and his law

firm.

(ECF No. 96-5, at 6-7).

On March 29, 2017, Thomas and Daniel Buckingham filed a
complaint in the Circuit Court seeking the dissolution of Oak Plaza
(the “Dissolution Case”).

See Docket, Buckingham v. Oak Plaza,

LLC, No. 431544V (Circuit Court for Montgomery County); (ECF Nos.
86-9, at 7; 85-7).

On September 21, 2017, Thomas and Daniel

Buckingham filed an amended complaint.

See Docket, Buckingham v.

Oak Plaza, LLC, No. 431544V (Circuit Court for Montgomery County);
(ECF Nos. 86-9, at 9-10; 86-1).

On September 20, 2018, the Circuit

Court issued an opinion and order dissolving Oak Plaza.
96-4; 104-3).
Samuel

(ECF Nos.

On November 21, 2018, the Circuit Court appointed

Williamowsky

(“Mr.

Williamowsky”)

as

an

auditor

“to

determine if there are any assets to be wound up and whether or
not [Tower Oaks] has any assets which are properly under the
jurisdiction of the Court.”

(ECF Nos. 96-10, at 1; 104-9, at 1).

On June 26, 2020, Mr. Williamowsky filed his audit report (the
“Audit Report”), which determined that “the only asset of Oak Plaza
. . . was its unliquidated interest in its wholly owned subsidiary,
Tower Oaks . . ., and potential direct and derivative causes of
action to recover . . . funds received and paid out by [Tower
Oaks.]”

(ECF Nos. 96-5, at 4; 104-4, at 4).

The Audit Report

also concluded that, based on the disbursement of the Funds between
2015 and 2019, Oak Plaza and Tower Oaks may have causes of action
6

against Mr. McNutt as well as Richard, David, and Susan Buckingham
(individually
purportedly

and

as

trustee

received

Buckingham’s behalf).

of

the

disbursements

Cardinal

of

the

Trust,

Funds

on

which
Susan

(ECF Nos. 96-5, at 7; 104-4, at 7).

The Circuit Court then appointed Keith J. Rosa (“Mr. Rosa”)
to be “Receiver of Oak Plaza.” (ECF No. 1-6, at 36).

This

appointment gave Mr. Rosa “full authority to wind up the affairs
of Oak Plaza,” “including but not limited to powers to issue
subpoenas,

retain

experts,

investigate

claims . . ., [and] institute litigation.”

and

compromise

(ECF No. 1-6, at 36).

On November 19, 2021, Mr. Rosa—acting as Oak Plaza’s Receiver—
filed a complaint against Richard, David, and Susan Buckingham,
Cardinal Trust, and Mr. McNutt in the Circuit Court for Montgomery
County

(the

separately

“Complaint”).
address

disbursement.

the

(ECF
2015

No.

2,

at

Assignments

1).
and

The
the

claims
Funds’

(ECF No. 2, at 13, 15, 19, 21, 24, 27, 30, 32).

There are ten counts.

Counts I (unjust enrichment against all

Defendants) and II (legal malpractice against Mr. McNutt) raise
claims

based

disbursement.

on

both

the

2015

Assignments

and

the

Funds’

Counts III (fraudulent concealment against the

Siblings), IV (conspiracy to commit fraudulent concealment against
all Defendants), VII (constructive fraud against the Siblings),
and VIII (aiding and abetting constructive fraud against all
Defendants) are based solely on allegations relating to the 2015
7

Assignments.

Counts

V

(fraudulent

concealment

against

the

Siblings), VI (conspiracy to commit fraudulent concealment against
all Defendants), IX (constructive fraud against the Siblings), and
X (aiding and abetting constructive fraud against Mr. McNutt) are
based solely on allegations relating to the Funds’ disbursements.
On January 31, 2022, Mr. McNutt removed the case to this
court.

(ECF No. 1).

On March 16, the court dismissed Counts III,

IV, VII, VIII, and the parts of Counts I and II relating to the
2015 Assignments.

(ECF Nos. 53; 54). On June 29, 2023, Defendants

filed a joint motion for summary judgment.

(ECF No. 82).

On July

25, 2023, Defendants filed an amended consolidated memorandum in
support of their joint motion for summary judgment. 3 (ECF No. 93).
On August 10, 2023, Plaintiff filed an opposition to Defendants’
joint motion for summary judgment and cross-motion for summary
judgment.

(ECF No. 96).

On September 11, 2023, Defendants filed

a consolidated memorandum in opposition to Plaintiff’s crossmotion

for

summary

judgment

and

Plaintiff’s

Defendant’s joint motion for summary judgment.
October 6, 2023, Plaintiff replied.

opposition

to

(ECF No. 97).

On

(ECF No. 104).

Defendants’ amended consolidated memorandum in support of
their joint motion for summary judgment contains an illegible
portion with overlapping text and perhaps missing paragraphs. (See
ECF No. 93, at 37).
3

8

II.

Standard of Review
A court may enter summary judgment only if there is no genuine

dispute as to any material fact and the moving party is entitled
to judgment as a matter of law.

Fed.R.Civ.P. 56(a).

A dispute

about a material fact is genuine “if the evidence is such that a
reasonable jury could return a verdict for the nonmoving party.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

“[A]

party opposing a properly supported motion for summary judgment
may not rest upon the mere allegations or denials of his pleading,
but must set forth specific facts showing that there is a genuine
issue for trial.”

Interprofession du Gruyere v. U.S. Dairy Exp.

Council, 61 F.4th 407, 415 (4th Cir. 2023) (internal quotation
marks omitted) (quoting Liberty Lobby, 477 U.S. at 248).

“A mere

scintilla of proof . . . will not suffice to prevent summary
judgment[.]”

Peters v. Jenney, 327 F.3d 307, 314 (4th Cir. 2003).

“If the evidence is merely colorable, or is not significantly
probative, summary judgment may be granted.”
U.S. at 249–50 (citations omitted).

Liberty Lobby, 477

The court must construe the

facts that are presented in the light most favorable to the party
opposing the motion.

Scott v. Harris, 550 U.S. 372, 378 (2007).

“When cross-motions for summary judgment are before a court,
the court examines each motion separately, employing the familiar
standard under Rule 56 of the Federal Rules of Civil Procedure.”
Desmond v. PNGI Charles Town Gaming, LLC, 630 F.3d 351, 354 (4th
9

Cir. 2011).

The court must deny both motions if it finds there is

a genuine dispute of material fact, “[b]ut if there is no genuine
issue and one or the other party is entitled to prevail as a matter
of law, the court will render judgment.”

10A Charles A. Wright,

et al., Federal Practice & Procedure § 2720 (3d ed. 1998).
III. Summary Judgment
Defendants advance various arguments urging the court to
grant summary judgment in their favor both with respect to the
entire complaint and as to some specific claims. Defendants assert
that all of Plaintiff’s claims necessarily fail because (1) the
Siblings are managers of Oak Plaza and Tower Oaks; (2) they are
time-barred;

and

(3)

the

Defendants.

(ECF No. 93).

Dissolution

Case

is

not

binding

on

In addition, Defendants contend that

the undisputed evidence does not support Plaintiff’s claims in
Counts I, II, V, VI, IX, and X.

(ECF Nos. 93; 97).

On the other

hand, Plaintiff counters that (1) the Siblings are not managers of
Oak Plaza and Tower Oaks; (2) its claims are not time-barred; and
(3) the Dissolution Case is binding on Defendants.
1; 104-1).

(ECF Nos. 96-

Furthermore, Plaintiff argues that the undisputed

evidence demonstrates that it is entitled to summary judgment in

10

its favor on Counts I, II, V, VI, IX, and X.

(ECF Nos. 96-1; 104-

1).
A. Arguments with Respect to the Entire Complaint
1. Management Authority over Oak Plaza and Tower Oaks
All

of

Plaintiff’s

claims

rest

on

the

assertion

that

Defendants needed to obtain Daniel Buckingham’s approval before
taking the Funds because only Oak Plaza, through its manager Daniel
Buckingham, had the authority to act on behalf of Tower Oaks.
response,

Defendants

argue

that

obtaining

Daniel

In

Buckingham’s

approval was not necessary because (1) the Siblings have been
appointed managers of Oak Plaza and Tower Oaks; (2) the doctrines
of waiver and estoppel-and alternatively, ratification-establish
the Siblings’ managerial authority over Oak Plaza and Tower Oaks;
and (3) the Circuit Court in the Cohen Litigation determined that
the Siblings had the authority to act on behalf of Tower Oaks.
(ECF No. 93 ¶¶ 139-93).
First, Defendants argue that the Siblings have been appointed
managers of Tower Oaks and Oak Plaza on the basis of three actions.
(See id. ¶¶ 139-169).

On September 21, 2012, David Buckingham

emailed Richard and Susan Buckingham stating that although Mr.
Buckingham

is

currently

Tower

Oaks’

manager,

“[u]pon

his

resignation or death, each of you and I will become the Manager
[of Tower Oaks].”

(ECF No. 84-2; see ECF No. 93-4 ¶¶ 29-30).

Defendants contend that “[t]he Tower Oaks Operating Agreement was
11

amended

by

the

[September

21,

2012]

email

and

therefore

the

appointments are effective as an amendment to the Tower Oaks
Operating Agreement.”

(ECF No. 93 ¶ 159).

In August 2013, the

Siblings signed an “action by the members of Oak Plaza” ratifying
an August 2012 “Second Amendment” to the Oak Plaza Operating
Agreement appointing themselves as managers of Oak Plaza upon Mr.
Buckingham’s death or resignation.

(See ECF No. 88-1, at 2, 5).

At a July 2015 meeting, Daniel Buckingham executed certified
resolutions

(the

appointments

he

“Certified
made-“as

Resolutions”)

Guardian

of

[Mr.]

ratifying

the

Buckingham”

and

“Manager of Oak Plaza”-in the September 21, 2012 email as well as
the appointments made in the August 2013 action.
¶ 82; 85-10, at 12).

(ECF Nos. 93-4

Plaintiff counters that the Appellate Court

of Maryland has already confirmed that Daniel and Thomas Buckingham
became Oak Plaza’s managers upon Mr. Buckingham’s death.

(ECF No.

96 ¶¶ 70, 73) (citing Procida, 219 Md.App. at 404).
According to the Maryland Limited Liability Act, “unless
otherwise agreed . . . [d]ecisions concerning the affairs of the
limited liability company shall require the consent of members
holding at least a majority of the interests in profits of the
limited liability company[.]” 4

Md. Code Ann., Corps. & Ass’ns §§

Plaintiff misrepresents the language of Md. Code Ann.,
Corps. & Ass’ns §§ 4A-403 (b)(2). Compare id., and (ECF No. 976, at 2), with (ECF No. 96-1 ¶ 76).
4

12

4A-403 (a), (b)(2) (emphasis added); (ECF No. 97-6, at 2) (emphasis
added). The Oak Plaza Operating Agreement provides that amendments
are

not

determined

by

members

possessing

majority

interest.

Rather, the Oak Plaza Operating Agreement states that it “may not
be amended without the written consent of all the Members, and if
any amendment shall limit or detract from the power or authority
of the Manager, also with the written consent of the Manager.”
(ECF No. 87-1, at 21; 96-7, at 21; 104-6, at 21) (emphasis added).
As explained in Procida, 219 Md.App. at 403–04; (ECF No. 87-2, at
17),
Thomas and Daniel—two Members—did not consent
to the [August 2012] [S]econd [A]mendment [to
the Oak Plaza Operating Agreement]. For that
reason, [the August 2012 Second Amendment to
the Oak Plaza Operating Agreement] was not
valid or effective [under the controlling
terms of the Oak Plaza Operating Agreement].
Upon [Mr. Buckingham]’s death on October 17,
2012, the succession provision in the Oak
Plaza Operating Agreement was triggered and
(because [Mrs. Buckingham] no longer was
alive) Thomas and Daniel [Buckingham] became
[Oak Plaza]’s Manager, jointly, with the
“full, exclusive, and complete discretion,
power,
and
authority,
subject
to
the
requirements of applicable law, to manage,
control, administer, and operate the business
and affairs” of the company, and “to make all
decisions
affecting
such
business
and
affairs.”[5]
The Audit Report came to the same conclusion as the Procida
court: “Upon [Mr. Buckingham]’s death on October 17, 2012, Thomas
and Daniel became the Managers of Oak Plaza.” (ECF No. 104-4, at
3).
5

13

Defendants argue that “[w]hile the Procida court stated that
David[]

[Buckingham’s]

attempts

to

modify

the

[Oak

Plaza]

Operating Agreement, related to management authority, were not
permitted or effective, the [c]ourt did not suggest that the lack
of

authority

determined

in

the

extended beyond that date.”
however,

have

not

time

frame

of

January[]

(ECF No. 97 ¶ 43).

provided

evidence

showing

2013

Defendants,
that

Daniel

Buckingham-as Oak Plaza’s sole manager after Thomas Buckingham’s
bankruptcy

disqualified

him

from

membership-consented

appointing the Siblings as managers of Oak Plaza.

to

Because the

Siblings’ August 2013 and July 2015 ratifications of the Siblings’
appointments

as

managers

of

Oak

Plaza

undermined

Daniel

Buckingham’s managerial authority, the Siblings were required to
obtain unanimous consent from all Oak Plaza members-especially
Daniel

Buckingham. 6

The

Siblings

did

not

obtain

Daniel

In his supplemental declaration, David Buckingham contends
that under the Oak Plaza Operating Agreement’s power of attorney
provision, the August 2012 “Second Amendment” to the Oak Plaza
Operating Agreement was valid. (See ECF No. 97-8 ¶ 11). David
Buckingham also asserts that “the [Appellate Court of Maryland]
ruled that [his] authority under the guardianship orders to act as
Manager of Oak Plaza ended at the death of [Mr. Buckingham in
October 2012] and therefore [his] actions as Manager prior to his
death were authorized.”
(Id. ¶ 13).
David Buckingham
misrepresents Procida’s holding.
As explained in Procida, the
August 2012 “Second Amendment” to the Oak Plaza Operating Agreement
“was not valid or effective[]” because the power of attorney
provision “does not grant [Oak Plaza’s] Manager the power to amend
the [Oak Plaza] Operating Agreement[]”-regardless of the fact that
the August 2012 “Second Amendment” took place prior to Mr.
Buckingham’s death. See Procida, 219 Md.App. at 403-04.
6

14

Buckingham’s consent.

Hence, the Siblings’ August 2013 and July

2015

themselves

appointments

of

as

Oak

Plaza’s

managers

are

invalid.
The Tower Oaks Operating Agreement states that it “may only
be amended by a written instrument which evidences the approval of
a

majority

of

all

of

the

Membership

Interests

owned

by

the

Members.”

(ECF Nos. 104-4, at 36; 104-5, at 11; 83-1, at 11).

Moreover,

“[i]n

the

event

of

the

resignation,

removal

or

termination for any reason whatsoever of the Manager (or one of
them) of [Tower Oaks], the written consent of Members owning at
least

a

majority

of

the

total

Membership

required to designate a new Manager.”
104-5, at 3; 83-1, at 3).

interests

shall

be

(ECF Nos. 104-4, at 28;

In other words, as Tower Oaks’ sole

member, Oak Plaza-via its manager-is responsible for amendments to
the Tower Oaks Operating Agreement and designating Tower Oaks’
manager.

The September 21, 2012 email is not a valid amendment to

the Tower Oaks Operating Agreement because it occurred without the
consent of Mr. Buckingham, who was still alive at the time as Tower
Oaks and Oak Plaza’s manager.

The reaffirmation of the September

21, 2012 email at the Siblings’ July 2015 meeting is also invalid
because

the

Siblings

Buckingham-who

was

did

not

in

not

obtain

the

attendance-after

Buckingham as Oak Plaza’s manager.

consent
he

of

Daniel

succeeded

Mr.

As observed in the Auditor

Report, “[t]here is no evidence” that Daniel Buckingham appointed
15

a new manager of Tower Oaks after Mr. Buckingham’s death.
Nos. 104-4, at 3; 96-5, at 3).

(ECF

Therefore, as non-managing members

of Tower Oaks, the Siblings had no authority-actual or otherwiseto act on behalf of Tower Oaks. 7
Second, Defendants argue that Daniel Buckingham has waivedand is estopped from asserting-his managerial authority over Oak
Plaza and Tower Oaks because he did not challenge the Siblings’
actions as purported managers of Oak Plaza and Tower Oaks.
No. 93 ¶¶ 170-178).

(ECF

Specifically, Defendants contend that “both

waiver and estoppel apply” because Daniel Buckingham’s failure to
fulfill his managerial duties “have caused the Defendants to spend
substantial amounts of time and money . . . to attempt to preserve
an asset that Dan . . . clearly abandoned.”

(Id. ¶ 177). 8

The

Supreme Court of Maryland has explained that

In his supplemental declaration, David Buckingham states
that he believed that Daniel Buckingham had been removed as a
manager of Oak Plaza as a result of a July 2015 estoppel
certificate stating that Daniel Buckingham was no longer a member
of Oak Plaza. (ECF No. 97-8 ¶ 24; see ECF Nos. 85-5, at 2, 11;
88-4, at 2, 11; 88-3, at 2). The Circuit Court has held that the
estoppel certificate is insufficient to divest Daniel Buckingham
of his membership. (ECF Nos. 96-4, at 8; 104-3, at 8).
7

Plaintiff responds that waiver and estoppel do not apply
because Thomas and Daniel Buckingham “entrusted” David Buckingham
to pick the legal team for the Cohen Litigation. (ECF No. 96-1 ¶¶
79, 84; see also ECF No. 104-1 ¶ 44). In support, Plaintiff solely
relies on Exhibit 36, (ECF No. 86-6) to Plaintiff’s motion for
summary judgment, which has been withdrawn, (see ECF No. 92), and
replaced by a new exhibit that is unrelated to the issue of
entrustment, (ECF No. 91-2).
The court will not consider the
8

16

[a] waiver is the intentional relinquishment
of a known right, or such conduct as warrants
an inference of the relinquishment of such
right, and may result from an express
agreement or be inferred from circumstances.
[“A]cts relied upon as constituting a waiver
of the provisions[”] of a contract must be
inconsistent with an intention to insist upon
enforcing such provisions.
Canaras v. Lift
Truck Services, Inc., 272 Md. 337, 360 (1974);
Food Fair Stores, Inc. v. Blumberg, 234 Md.
521, 531 (1964). . . . [“]A waiver may be
either verbal or in writing; and it is not
necessary that the waiver should be direct and
positive. It may result from implication and
usage, or from any understanding between the
parties which is of a character to satisfy the
mind that a waiver is intended.
The assent
must, however, be clearly established and will
not be inferred from doubtful or equivocal
acts or language.[”] 272 Md. at 360-61
(emphasis added).
BarGale Indus., Inc. v. Robert Realty Co., 275 Md. 638, 643–44
(1975) (emphasis added).

Accordingly, waiver “require[s] mutual

knowledge and acceptance[.]”

Hovnanian Land Inv. Grp., LLC v.

Annapolis Towne Ctr. at Parole, LLC, 421 Md. 94, 120 (2011)
(emphasis added). Waiver and estoppel are related but nevertheless
distinguishable doctrines:
Waiver is the voluntary surrender of a right;
estoppel is the inhibition to assert it from
the mischief that has followed.
Waiver
involves
both
knowledge
and
intention;
estoppel may arise where there is no intent to
mislead. Waiver depends upon what one himself
intends to do; estoppel depends rather upon
what he causes his adversary to do.
Waiver
involves the acts and conduct of only one of
withdrawn Exhibit 36, (ECF No. 86-6), or any references to it in
the papers.
17

the parties; estoppel involves the conduct of
both.
A waiver does not necessarily imply
that one has been misled to his prejudice or
into an altered position; an estoppel always
involves this element. Estoppel may carry the
implication of fraud, waiver does not.
A
waiver may be created by acts, conduct or
declarations
insufficient
to
create
a
technical estoppel.
Benson v. Borden, 174 Md. 202, 219 (1938).
Here, Defendants have not shown that there was a mutual
understanding between Daniel Buckingham and the Siblings that
Daniel Buckingham has unequivocally waived his managerial right
over Oak Plaza and Tower Oaks.

Indeed, Daniel Buckingham declined

to attend the Siblings’ July 2015 meeting.

Defendants also argue

that Plaintiff “fails to provide a single instance in which [Daniel
Buckingham] exercised management authority, or even interest in,
the Cohen Litigation after 2014[,]” and “[Daniel Buckingham] . . .
failed to preserve the existence of Oak Plaza and Tower Oaks by
failing to file . . . the LLCs[’] annual reports or personal
property tax returns . . . at any time after [Mr. Buckingham’s
death].”

(ECF No. 97 ¶¶ 31, 33).

Failure to attend a meeting, a

lack of diligence in fulfilling managerial duties, and disinterest
in

pursuing

certain

litigation,

however,

do

not

necessarily

manifest a clear intent wholly to relinquish a managerial right.
Nor do Defendants contend, much less show, that they have been
misled into assuming managerial positions over Oak Plaza and Tower
Oaks.

Hence,

neither

waiver

nor
18

estoppel

foreclose

Daniel

Buckingham from asserting managerial authority over Oak Plaza and
Tower Oaks.
Alternatively, Defendants contend that Oak Plaza has ratified
the Siblings’ actions in the Cohen Litigation and as a result, the
Siblings became the managers of Oak Plaza and Tower Oaks given
that “[Daniel Buckingham] . . . took no action or interest [in the
Cohen Litigation] from 2014 through September[] 2017 and provided
no management, instruction, or comment on the . . . Funds until
February[] 2018.”

(See ECF No. 97 ¶¶ 45-49).

The Maryland Limited Liability Act provides that “each member
of the [limited liability] company is an agent of the company for
the purpose of its business, unless the articles of organization
or operating agreement provide otherwise.”

Procida, 219 Md.App.

at 406-07 (citing Md. Code Ann., Corps. & Ass’ns § 4A-401(a)).
According to the Oak Plaza Operating Agreement, “no Member is an
agent of the company and no Member has authority to act for the
company solely because he or she is a Member.” 9
15; 96-7, at 15; 104-6, at 15).

(ECF No. 87-1, at

Regardless, unauthorized acts by

an Oak Plaza member can be later cured via ratification by Daniel
Buckingham.

Ratification requires “knowledge of all the material

As a result, the clear language in the Oak Plaza Operating
Agreement refutes Defendants’ argument that the Siblings had
“apparent authority” such that they were acting “with[in] the scope
of [their] usual employment, or [were] held out to the public . . .
as having competent authority[.]”
(ECF No. 97 ¶ 56) (citing
Proctor v. Metro Money Store, 579 F.Supp.2d 724 (D.Md. 2008)).
9

19

facts concerning the act being ratified . . . at the time of
ratification.”

Procida, 219 Md.App. at 405 (citing Linden Homes,

Inc. v. Larkin, 231 Md. 566, 570 (1963); Tricat Indus., Inc. v.
Harper, 131 Md.App. 89 (2000); Yost v. Early, 87 Md.App. 364, 382
(1991)).

“An inference that the principal had knowledge may be

drawn from the existence of such information as would put a person
of ordinary intelligence on notice of the material facts of the
transaction

being

ratified.”

Id.

at

406

(citing

Bakery

and

Confectionery Union and Industry Int’l Pension Fund v. New World
Pasta Co., 309 F.Supp.2d 716, 729–30 (D.Md. 2004)).

“Ratification

of an unauthorized act . . . may be implied from words, acts, or
conduct on the part of the principal that reasonably indicate a
desire to affirm the unauthorized act.” Id. (citing In re Uwimana,
274 F.3d 806, 812-13 (4th Cir. 2001) (applying Maryland law),
abrogated on different grounds by Bullock v. BankChampaign, N.A.,
569 U.S. 267 (2013); Progressive Cas. Ins. Co. v. Ehrhardt, 69
Md.App.

431,

principal

may

442

(1986);

ratify

an

19
act

C.J.S.
“by

Corporations

accepting

and

§

709).

A

retaining

its

benefits[] or by failing to timely disavow or repudiate it[.]”
Id. (first citing Citizens Bank of Maryland v. Maryland Indus.
Finishing Co., Inc., 338 Md. 448, 463–64 n.9 (1995); and then
citing Proctor, 579 F.Supp.2d 724 (applying Maryland law)); see
also 19 C.J.S. Corporations § 698 (“Ratification will not be
implied from silence or a failure to repudiate without knowledge
20

of the facts.

However, ratification of a corporate officer’s

unauthorized acts may be inferred from silence and inaction, where
the corporation has full knowledge of the unauthorized act.”).
The undisputed evidence shows that, despite refusing to fund
or participate in the preparation of the Cohen Litigation, Daniel
Buckingham was keenly aware that the Siblings were spearheading
the Cohen Litigation on behalf of Tower Oaks.
multiple

discussions

with

Daniel

The Siblings had

Buckingham

regarding

the

possibility that he would help them financially support the Cohen
Litigation, one of which took place in August 2014 after the Cohen
Litigation’s May 2014 judgment.

(See ECF Nos. 82-6 ¶ 15; 93-4 ¶¶

68, 92; 82-4 ¶¶ 63-65). Along with the Siblings, Daniel Buckingham
attended an

August

2014

Litigation’s judgment.

sheriff’s

sale

to

(ECF No. 82-4 ¶ 66).

satisfy

the

Cohen

Daniel Buckingham

also offered some financial support to the Siblings at a May 2015
sheriff’s sale to satisfy the Cohen Litigation’s judgment.
No. 93-4 ¶ 59).

(ECF

At each instance, Daniel Buckingham did not object

to the Siblings’ management of the Cohen Litigation.

Rather,

Daniel Buckingham accepted the Siblings’ efforts in the Cohen
Litigation

on

behalf

of

Tower

Oaks-ratifying

the

Siblings’

authority as Tower Oaks’ agents in the Cohen Litigation as a
result.

Nevertheless, authority to manage the Cohen Litigation as

Tower Oaks’ agent is not equivalent to management authority over
Oak Plaza and Tower Oaks. Daniel Buckingham’s actions in accepting
21

the benefit of the Siblings’ management of the Cohen Litigation do
not reasonably indicate that he knew, prior to ratification, that
he was also ceding management authority over Tower Oaks such that
the Siblings were permitted to take the Funds belonging to Tower
Oaks.

See Adams’ Exp. Co. v. Trego, 35 Md. 47, 66 (1872) (holding

that a “broad and comprehensive” interpretation of an agent’s power
to supervise a principal’s business still excludes the power to
license other employees to carry on a competing business because
it would “[not] be rational to presume that it was the intention
of the principal to clothe the agent with authority to contract in
a manner to inflict serious injury on its business[,]” and “it is
a universal principle in the law of agency, that the powers of the
agent are to be exercised for the benefit of the principal only,
and not of the agent or of third parties[]”).

Without such

material knowledge, Daniel Buckingham cannot have ratified the
Siblings’ purported management authority over Tower Oaks. In fact,
on February 22, 2018, after becoming aware of the possibility that
the

Siblings

authority

as

took
Oak

the

Funds,

Plaza’s

Daniel

Buckingham-asserting

manager-moved

jointly

with

his

Thomas

Buckingham to enjoin Oak Plaza and its members from spending the
Funds.

(See ECF No. 86-2).

Daniel Buckingham’s conduct cannot

support an inference of an intent to ratify the Siblings’ purported
management authority over Tower Oaks.

22

Third, Defendants argue that the Siblings are managers of
Tower Oaks because the Circuit Court in the Cohen Litigation
determined that David Buckingham had the authority to act on behalf
of Tower Oaks.

(ECF No. 93 ¶¶ 179-193).

Indeed, the Cohen

Litigation defendants filed an April 29, 2013 motion to dismiss
and a July 13, 2013 motion for summary judgment arguing that David
Buckingham did not have authority to act on behalf of Tower Oaks,
(ECF Nos. 84-3, at 1; 84-5, at 1-2)-both of which were denied by
the Circuit Court, (ECF Nos. 84-4; 84-6).

A December 27, 2013

motion for summary judgment advanced a similar argument, (ECF No.
84-8, at 40), and was partially granted, (ECF No. 84-9). Plaintiff
argues, however,

that

the

Circuit

Court

“d[id]

not

make

any

findings regarding David Buckingham’s authority to act on behalf
of Tower Oaks[,]” but even if it did, it did not determine “whether
David Buckingham was a manager of either Tower Oaks . . . or Oak
Plaza[.]”
Plaintiff’s

(ECF No. 96-1 ¶¶ 92-93).
argument.

conceded the point.

By

failing

Defendants do not respond to
to

respond,

Plaintiff

has

See Mentch v. Eastern Sav. Bank FSB., 949

F.Supp. 1236, 1247 (D.Md. 1997) (dismissing a plaintiff’s claim as
“abandoned” because she did not raise it in her opposition to
defendant’s motion for summary judgment); Mincey v. State Farm
Ins. Co., 672 F.Supp.3d 59, 62 (D.Md. 2023) (“[A] plaintiff who
fails to respond to an argument raised in a dispositive motion is
deemed to have abandoned the claim.”).
23

2. Statute of Limitations
The

parties

agree

that

Maryland’s

three-year

statute

of

limitations for civil claims, Md. Code Ann., Cts. & Jud.Proc. § 5–
101, governs the claims asserted in Counts I, II, V, VI, IX, and
X of the Complaint.

(See ECF Nos. 93 ¶ 114; 96-1 ¶ 44, 60-61).

The parties, however, disagree on the date on which Plaintiff’s
causes of action accrued. Maryland has adopted the discovery rule,
which provides that a limitations period does not begin to run
until “a [plaintiff] gains knowledge sufficient to put her on
inquiry.”

O’Hara v. Kovens, 305 Md. 280, 289 (1986) (quoting

Lutheran Hosp. of Maryland v. Levy, 60 Md.App. 227, 237 (1984)).
In other words, “a cause of action accrues when (1) it comes into
existence, . . . and (2) the claimant acquires knowledge sufficient
to make inquiry, and a reasonable inquiry would have disclosed the
existence of the allegedly negligent act and harm.”

Lumsden v.

Design Tech Builders, Inc., 358 Md. 435, 447 (2000) (emphasis
added) (quoting Edwards v. Demedis, 118 Md.App. 541, 566 (1997)).
“[A] cause of action does not accrue until all elements are
present, including damages, however trivial.”

Doe v. Archdiocese

of Washington, 114 Md. App. 169, 177 (1997) (citing Mattingly v.
Hopkins, 254 Md. 88, 95 (1969); Baker, Watts & Co. v. Miles &
Stockbridge, 95 Md.App. 145, 187 (1993); American Home Assurance
v. Osbourn, 47 Md.App. 73, 86 (1980)).

“[A] plaintiff has inquiry

notice when it does something that gives it a reason to investigate
24

public records, and those records would reveal the defendant’s
alleged wrongs.”

Buckingham, 2023 WL 2537661, at *13; see, e.g.,

Cain v. Midland Funding, LLC, 475 Md. 4, 31 (2021) (holding that
a debtor’s claim against an unlicensed collection agency accrued
when the debtor submitted her payment because it gave her a reason
to investigate the agency’s license statute, and she “had the
ability to ascertain, through due diligence and based upon matters
of

public

record,

whether

[the

agency]

was

licensed

at

the

time[]”).
Where a plaintiff is a limited liability corporation, accrual
occurs when its agent acquires the knowledge necessary to put the
agent on inquiry notice. See Martin Marietta Corp. v. Gould, Inc.,
70 F.3d 768, 773 (4th Cir. 1995) (applying Maryland law).

Here,

Daniel Buckingham (at any time) and Thomas Buckingham (prior to
declaring bankruptcy and losing his membership status) are Oak
Plaza’s agents by virtue of being Oak Plaza’s managing members.
See Plank v. Cherneski, 469 Md. 548, 572 (2020) (“Despite the
statutory silence concerning fiduciary duties in the LLC Act,
‘[m]anaging members are clearly agents for the LLC and each of the
members, which is a fiduciary position under common law.’” (quoting
George Wasserman & Janice Wasserman Goldsten Family LLC v. Kay,
197 Md.App. 586, 616 (2011))); (ECF No. 87-1, at 15) (stating in

25

the Oak Plaza Operating Agreement that non-managing members are
not agents of Oak Plaza).
Defendants argue that Daniel Buckingham was on notice when
Mr. McNutt initially obtained the Funds from the Circuit Court’s
registry

on

March

6,

2017

and

failed

to

conduct

reasonable

diligence that would have revealed the location of the Funds and
their disbursement.
Defendants

contend

(See ECF No. 93 ¶¶ 131-32).
that

“[Daniel

Buckingham]

Alternatively,
was

on

inquiry

notice, no later than February 22, 2018,” because Daniel Buckingham
believed that the Siblings likely possessed the Funds on that date.
(Id. ¶ 133) (emphasis in original) (citing ECF No. 86-3 ¶¶ 6, 10).
Plaintiff counters that the limitations period did not begin to
run until the June 26, 2020 Audit Report revealed the Funds’
disbursements.

(See ECF No. 96-1 ¶ 65).

As the court explained in a prior opinion,
the
2017
dissolution
suit
gave
Daniel
Buckingham reason to investigate Oak Plaza’s
assets and put him on inquiry notice of any
relevant information he “had the ability to
ascertain, through due diligence and based
upon matters of public record[.]” . . . Had
Daniel [Buckingham] conducted a reasonable
investigation in 2017, he may have found that
the [C]ircuit [C]ourt had released the money
from its registry, but it is unclear how he
could have found the Defendants’ private
contract or their newly created bank account.
Nor did he have a way to discover the

26

disbursements themselves—one of which did not
occur until 2019 anyway.
Buckingham, 2023 WL 2537661, at *13.
supplied

any

evidence

Here, Defendants have not

demonstrating

that

a

reasonable

investigation prior to the Audit Report would uncover the full
extent of Defendants’ actions with respect to the Funds-all of
which, apart from the Funds’ withdrawal and the 2015 Assignments,
were not discoverable via public records. 10

Instead, Defendants

argue that the running of the limitations period is not contingent
on the dates of the individual disbursements because Mr. McNutt’s
March 6, 2017 withdrawal of the Funds marks the date of the first
“trivial

injury”

and

is

when

all

damages

are

known-“[t]he

subsequent [disbursements to the Siblings] did not alter the amount
or

nature

of

sustained[.]”

the

alleged

damages

that

(ECF No. 97 ¶¶ 18, 21).

Oak

Plaza

already

Defendants, however,

overlook the fact that Plaintiff’s causes of action do not solely
arise from Mr. McNutt’s withdrawal of the Funds.

Plaintiff’s

causes of action are also predicated on the “Agreement to Escrow
Funds,” depositing of the Funds in the Bank Account unknown to
Daniel Buckingham, and subsequent disbursements of the Funds, (see
ECF No. 2)-all of which must have occurred, and be discoverable,
before the limitations period can accrue.

Thus, the limitations

Daniel Buckingham’s mere belief on February 22, 2018 that
the Siblings possessed the Funds is therefore irrelevant to
determining notice. (See ECF No. 86-3 ¶ 6).
10

27

period began running when the Audit Report was released on June
26, 2020-the first time Daniel Buckingham was able reasonably and
fully to ascertain Defendants’ actions with respect to the Funds
after the final disbursement of the Funds in 2019. 11
3. Whether the Dissolution Case is Binding on Defendants
Defendants argue that the Circuit Court’s dissolution of Oak
Plaza on September 20, 2018 is not binding on Defendants, (ECF No.
97 ¶ 55) (citing ECF Nos. 85-7; 85-9; 93-3 ¶ 77), and was defective
for the following reasons:
(1) [Thomas Buckingham] had no standing to
bring the lawsuit; and (2) none of the
Defendants
were
parties;
and
(3)
the
Plaintiffs, [Daniel] and [Thomas Buckingham],
claimed to be the managers of Oak Plaza and
yet they sued their own company seeking
dissolution when they were aware that Oak
Plaza had no business and were not entitled to
anything except after all expenses of Tower
Oaks were paid in full[.]

Defendants also argue that Plaintiff’s claims against Mr.
McNutt are time-barred because Daniel Buckingham (1) was
“suspicious” of Mr. McNutt in March 2017; (2) was aware in February
2018 that Mr. McNutt represented the Siblings’ interests; and (3)
attempted to remove Mr. McNutt as counsel for Oak Plaza and Tower
Oaks in April 2018 and May 2018. (ECF No. 97 ¶¶ 23, 25). For the
same reason, Defendants’ argument fails because a reasonable
investigation in 2017 and 2018 would not have revealed the full
extent of Mr. McNutt’s actions with respect to the Funds-namely,
his depositing of the Funds in the Bank Account as well as his
disbursements of the Funds from 2017 to 2019-until they were
uncovered by the Audit Report. Vague suspicions and even a desire
to terminate Mr. McNutt’s representation are insufficient to put
Daniel Buckingham on notice.
11

28

(Id.).

Plaintiff

counters

that

“[t]he

Circuit

Court

order

dissolving Oak Plaza was not appealed[]” and is therefore “binding
on Oak Plaza” and its members.
is correct.

(ECF No. 104-1 ¶ 71).

Plaintiff

Defendants’ arguments amount to a collateral attack

on the Circuit Court’s dissolution of Oak Plaza, and this court
does not have the authority to overturn a facially valid order of
the state court.
B. Specific Claims
1. Unjust Enrichment (Count I)
In

Count

I,

Plaintiff

alleges

that

all

Defendants

were

unjustly enriched by the Funds’ disbursements.

(ECF No. 2 ¶¶ 33-

48).

against

Plaintiff

seeks

judgment

on

Count

X

(1)

all

Defendants, jointly and severally, in the amount of $1,347,450.98,
plus interest and costs; (2) Richard Buckingham in the amount of
$525,000.00, plus interest and costs; (3) David Buckingham in the
amount

of

$817,808.00,

plus

interest

and

costs;

(4)

Susan

Buckingham in the amount of forty percent of the Funds plus
$475,626.13, interest, and costs; and (5) Mr. McNutt in the amount
of $66,626.53, plus interest and costs.

(Id. at 10).

Defendants argue that they should be granted summary judgment
on Count I because (1) “Plaintiff cannot show that the Defendants
were . . . unjustly enriched[;]” and (2) “Plaintiff cannot show
that it provided a benefit.”

(ECF No. 93 ¶¶ 207-08).

29

Plaintiff

contends that it should be granted summary judgment on Count I
because
[t]he Defendants clearly received a benefit
that was intended for the Plaintiff-the
[Funds] from the Cohen Litigation. The
Defendants have retained [the Funds] even
though they were not authorized to do so. It
would be inequitable to allow the Defendants
to continue to retain [the Funds] when it has
already been determined that the money
belonged to [Tower Oaks’] sole member, Oak
Plaza[.]
(ECF No. 96-1 ¶ 109).
A plaintiff bringing an unjust enrichment claim must prove
(1) “[a] benefit conferred upon the defendant by the plaintiff;”
(2)

“[a]n

appreciation

or

knowledge

by

the

defendant

of

the

benefit;” and (3) “[t]he acceptance or retention by the defendant
of the benefit under such circumstances as to make it inequitable
for the defendant to retain the benefit without the payment of its
value.”

Berry & Gould, P.A. v. Berry, 360 Md. 142, 151 (2000).

Here, Plaintiff has established that the Funds constitute the
alleged benefit in its unjust enrichment claim.

“In an action for

unjust enrichment the burden is on the plaintiff to establish that
the

defendant

holds

plaintiff’s

money

unconscionable for him to retain it.”

and

that

it

would

be

Plitt v. Greenberg, 242 Md.

359, 364 (1966) (citing Howard v. United States, 125 F.2d 986 (5th
Cir. 1942); American Newspaper, Inc. v. United States, 20 F.Supp.
385 (S.D.N.Y. 1937); Eatwell v. Beck, 41 Cal.2d 128 (1953); Messner
30

v. Union County, 34 N.J. 233 (1961); First National Bank at Cody
v. Fay, 80 Wyo. 245 (1959)).

“It is immaterial how the money may

have come into the defendant’s hands, and the fact that it was
received from a third person will not affect his liability, if, in
equity and good conscience, he is not entitled to hold it against
the true owner.”
42,

43

Id. (quoting Empire Oil Co. v. Lynch, 106 Ga.App.

(1963)).

Defendants

benefitted

from

the

Funds’

disbursements because the Funds belonged to Oak Plaza through Tower
Oaks.

(See ECF Nos. 96-5, at 4; 104-4, at 4).

Defendants maintain that Plaintiff fails to establish the
existence of a benefit because “Oak Plaza, [Daniel] and [Thomas
Buckingham], made no contribution to the Siblings’ attempts to
save Tower Oaks[,]” (ECF No. 93 ¶ 208), and “used all of the
[Buckingham]

family’s

resources

for

themselves[,]”

while

the

Siblings “used . . . all their assets . . . trying to preserve
. . . the Tower Oaks Building.”

(ECF No. 97 ¶ 41).

Defendants,

however, miss the point, as the parties’ dispute arises from the
Funds’ disbursement-not Daniel and Thomas Buckingham’s lack of
contribution to Tower Oaks.
Moreover, Plaintiff has established that Defendants have been
unjustly

enriched

by

the

Funds.

A

court’s

determination

of

“whether it is inequitable or unjust for the beneficiary to retain
the benefit without the payment of its value[]” consists of a
“fact-specific

balancing

of

the
31

equities[,]”

such

as

“fault,

ethical position, and delay.”

Royal Inv. Grp., LLC v. Wang, 183

Md.App. 406, 440 (2008) (first quoting Hill v. Cross Country
Settlements, LLC, 402 Md. 281, 301 (2007); and then quoting 1 Dan
B. Dobbs, Law of Remedies § 2.4(5) (2nd ed. 1993)).

“[T]he

balancing of equities and hardships looks at the conduct of both
parties and the potential hardships that might result from a
judicial decision either way.”

Id. (alteration in original)

(quoting 1 Dan B. Dobbs, Law of Remedies § 2.4(5) (2nd ed. 1993)).
The

equities

weigh

heavily

in

Plaintiff’s

favor

given

that

Defendants disbursed the Funds as purported managers of Oak Plaza
and Tower Oaks without Daniel Buckingham’s knowledge, even after
the Appellate Court of Maryland held in 2014 that Daniel and Thomas
Buckingham-not

the

Plaza’s managers.

Siblings-succeeded

Mr.

Buckingham

as

Oak

See Procida 219 Md.App. at 404; (ECF No. 87-2,

at 17). Defendants insist that they “are entitled to reimbursement
for their expenses, time and out of pocket expenses, including the
vast amount of legal fees necessary to prosecute the Cohen I
Litigation (and other expenses benefitting Tower Oaks).”
97

¶

42).

Regardless

of

whether

Defendants

(ECF No.

deserve

to

be

reimbursed for their efforts, they are not entitled to the Funds.
Only Oak Plaza-through Tower Oaks-is entitled to the Funds.
ECF Nos. 96-5, at 4; 104-4, at 4).

(See

Allowing Defendants to

circumvent Oak Plaza’s entitlement to the Funds simply because
they contributed to Tower Oaks would reward inequitable conduct.
32

As

Plaintiff

states,

“while

it

is

true

that

the

Defendants’

reasonable legal expenses . . . may be recoverable as reimbursable
expenses (with the approval of [Daniel Buckingham]), that alone
does not allow the Defendants to unilaterally decide . . . to give
themselves

all

[of

the

Funds].”

(ECF

No.

104-1

¶

54).

Accordingly, Plaintiff’s motion for summary judgment with respect
to Count I against all Defendants will be granted as to liability
and Defendants’ cross-motion for summary judgment with respect to
Count I will be denied. 12
2. Fraudulent Concealment and Constructive Fraud (Counts V
and IX)
In Counts V and IX, Plaintiff alleges that the Siblings
committed fraudulent concealment and constructive fraud by signing
the “Agreement to Escrow Funds” and disbursing the Funds without
notifying Oak Plaza.

For Count V, the complaint alleges that the

failure to disclose was with the intent to deceive Tower Oaks so
that it would not act to prevent the disbursal of the funds.
No. 2 ¶¶ 100-17).

(ECF

In Count IX, Plaintiff alleges that the failure

to disclose the Agreement or disbursal was contrary to the duty of

Defendants also argue that “[t]he Clean Hands doctrine
should be used here to assure that [Daniel] and [Thomas
Buckingham], the real parties in interest, have no chance to gain
from their consistent and long[-]standing bad acts[.]” (ECF No.
93 ¶ 218). Defendants erroneously conflate Plaintiff with Daniel
and Thomas Buckingham. As Plaintiff argues, “neither Thomas [n]or
Daniel [Buckingham] are parties to this case[]” because “[t]he
Plaintiff in this case is Oak Plaza, derivatively and on behalf of
Tower Oaks[.]” (ECF No. 96-1 ¶ 110).
12

33

the Siblings, based on the confidence placed in them to act in the
best interest of Oak Plaza and Tower Oaks, and the failure to
disclose had the tendency to deceive Tower Oaks. (ECF No. 2 ¶¶
170-186.)
Defendants argue that they should be granted summary judgment
on Counts V and IX because (1) “Defendants did not violate a legal
duty

by

deception

or

by

violating

a

confidence

[toward

Oak

Plaza][;]” and (2) Plaintiff has not shown that “Oak Plaza relied
on any statements or actions of the [Siblings][.]”
57-60).

(ECF No. 97 ¶¶

Plaintiff contends that it should be granted summary

judgment on Counts V and IX because (1) the Siblings had a duty to
inform Daniel Buckingham about the “Agreement to Escrow Funds” and
the Funds’ disbursements; and (2) Daniel Buckingham “entrusted”
the

Siblings

Litigation,

to

act

therefore

on

behalf

justifiably

safeguard Tower Oaks’ property.

of

Tower

relying

Oaks
on

in

the

the

Cohen

Siblings

to

(ECF No. 96-1 ¶¶ 154-55, 161).

Fraudulent concealment is “is any statement or other conduct
which prevents another from acquiring knowledge of a fact[.]”
Lloyd v. Gen. Motors Corp., 397 Md. 108, 138 (2007) (quoting Fegeas
v. Sherrill, 218 Md. 472, 476 (1958)).

A fraudulent concealment

claim consists of five elements: “(1) the defendant owed a duty to
the plaintiff to disclose a material fact; (2) the defendant failed
to disclose that fact; (3) the defendant intended to defraud or
deceive the plaintiff; (4) the plaintiff took action in justifiable
34

reliance on the concealment; and (5) the plaintiff suffered damages
Id. (quoting Green

as a result of the defendant’s concealment.” 13
v. H & R Block, 355 Md. 488, 525 (1999).

“Plaintiff must prove

either that Defendant had a duty to disclose a material fact to
them and failed to do so, or that Defendant concealed a material
fact for the purpose of defrauding Plaintiff.”

Odyssey Travel

Ctr., Inc. v. RO Cruises, Inc., 262 F.Supp.2d 618, 629 (D.Md. 2003)
(citing Shaw v. Brown & Williamson Tobacco Corp., 973 F.Supp. 539,
551 (D.Md. 1997)).
“A defendant commits constructive fraud against a plaintiff
where the defendant ‘breach[es] a legal or equitable duty’ to the
plaintiff in a way that ‘tend[s] to deceive others, to violate
public or private confidence, or to injure public interests.’”
Thompson

v.

UBS

Fin.

Servs.,

Inc.,

443

Md.

47,

69

(2015)

(alterations in original) (quoting Canaj, Inc. v. Baker & Div.
Phase III, LLC, 391 Md. 374, 421–22 (2006)).

The duty element of

a constructive fraud claim “generally arises in a context of trust
or

confidence,

such

as

a

fiduciary

duty

or

confidential

In reciting the elements of a fraud claim rather than a
fraudulent concealment claim, Defendants misrepresent the law
applicable to Plaintiff’s fraudulent concealment claim. (See ECF
No. 97 ¶ 57). Although Defendants argue that “Plaintiff shows no
representation relied upon by [Daniel and Thomas Buckingham][,]”
a false representation is not an element of a fraudulent
concealment claim.
Rather, fraudulent concealment itself is
“equivalent to a false representation.”
Rhee v. Highland Dev.
Corp., 182 Md.App. 516, 525 (2008) (quoting Stewart v. Wyoming
Cattle Ranche Co., 128 U.S. 383, 388 (1888)).
13

35

relationship.”

Chassels v. Krepps, 235 Md. App. 1, 16 (2017)

(citing Thompson, 443 Md. at 69).

“When such a duty is breached

by deceptive conduct, it doesn’t matter whether the culpable party
had a dishonest purpose or intent to deceive.” Id. (citing Ellerin
v. Fairfax Sav., F.S.B., 337 Md. 216 (1995)). “Mere non-compliance
with a legal duty is not necessarily constructive fraud[.]”

Id.

(citing Walter E. Heller & Co. v. Kocher, 262 Md. 471 (1971)).
Although not specifically pled by Plaintiff, there may be a
related concept at play: “[A] breach of fiduciary duty may be
actionable as an independent cause of action.”
598.

Plank, 469 Md. at

“To establish a breach of fiduciary duty . . . , a plaintiff

must show: ‘(i) the existence of a fiduciary relationship; (ii)
breach of the duty owed by the fiduciary to the beneficiary; and
(iii) harm to the beneficiary.’”
Erickson,

96

[defendant]

F.Supp.2d
can

breach

507,

Id. at 599 (quoting Froelich v.

526

fiduciary

(D.Md.

2000)).

duties

without

Hence,

“a

committing

fraud[,]” especially if the defendant “made no effort to hide” the
allegedly wrongful conduct.

Bontempo v. Lare, 217 Md. App. 81,

131 (2014), aff’d, 444 Md. 344 (2015). Bad judgment, without more,
does not give rise to fraud because it falls short of an intention
to deceive.

Id.

Here, the record is muddled and unclear as to the applicable
law and the facts related to the fraud-related claims.
instance,

the

parties

fail

to
36

discuss

adequately,

For
with

corresponding citations to the record, (1) whether the Siblings
intended to deceive Tower Oaks and Oak Plaza; and (2) whether the
Siblings’ actions had a tendency to deceive.

The cross-motions

for summary judgment with respect to Counts V and IX against the
Siblings will be denied. 14
3. Legal Malpractice (Count II)
In Count II, Plaintiff alleges that Mr. McNutt committed legal
malpractice

because

disbursing

the

Funds

without

Oak

Plaza’s

authorization constituted a breach of duty to Tower Oaks.
No. 2 ¶¶ 49-65).

(ECF

Plaintiff seeks judgment on Count II against Mr.

McNutt in the amount of $66,626.53, plus interests and costs. (Id.
at 13).
Plaintiff argues that it should be granted summary judgment
on Count II because
[t]here is no dispute that [Mr.] McNutt (1)
represented [Tower Oaks], (2) owed a duty to
[Tower Oaks] and its sole member, Oak Plaza,
(3) violated that duty when he distributed
[the] [F]unds . . . to [the Siblings] as well
as himself, without permission from the
manager of Oak Plaza, and (4) in making those
distributions, caused [Tower Oaks and] Oak
Plaza . . . to suffer . . . damages[.]
(ECF No. 96-1 ¶ 145).

Defendants contend that Mr. McNutt should

be granted summary judgment on Count II because Plaintiff fails to

As a result, the cross-motions for summary judgment with
respect to Counts VI, conspiracy to commit fraudulent concealment
against all Defendants, and X, aiding and abetting constructive
fraud against Mr. McNutt will also be denied.
14

37

establish

the

representation

malpractice claim.

and

duty

(ECF No. 97 ¶ 26).

elements

of

its

legal

Specifically, Defendants

argue that (1) “there is no allegation of a retainer agreement
between [Mr.] McNutt and Oak Plaza, and certainly none signed, or
recognized

by

[Daniel]

or

[Thomas

Buckingham][;]”

and

(2)

“Plaintiff[’s] assert[ion] that [Mr.] McNutt owed a duty to Oak
Plaza and . . . violated that duty when he distributed funds
‘without permission from the manager of Oak Plaza[]’ . . . is
without merit[.]”

(Id.).

A plaintiff bringing a legal malpractice claim must prove
“(1) the attorney’s employment, (2) the attorney’s neglect of a
reasonable duty, and (3) loss to the client proximately caused by
that neglect of duty.”

Suder v. Whiteford, Taylor & Preston, LLP,

413 Md. 230, 239 (2010) (Thomas v. Bethea, 351 Md. 513, 528–29
(1998)).

“As a general rule, an attorney owes a duty of diligence

and care only to his direct client/employer.” Goerlich v. Courtney
Indus., Inc., 84 Md.App. 660, 663 (1990) (citing Clagett v. Dacy,
47 Md.App. 23 (1980)).
Here, Defendants concede that “[Mr.] McNutt represented Tower
Oaks,” (ECF No. 97 ¶ 26)-which is sufficient to satisfy the
representation element of Plaintiff’s legal malpractice claim.
(See also ECF No. 93-3 ¶ 8).

Whether Mr. McNutt had a retainer

38

agreement with Oak Plaza is irrelevant, 15 as Plaintiff only alleges
that Mr. McNutt committed legal malpractice with respect to his
representation of Tower Oaks-not Oak Plaza.

(See ECF No. 2 ¶¶ 61-

64).
Moreover,
McNutt’s

duty

the

undisputed

towards

evidence

Tower

demonstrates

Oaks-arising

from

that
his

Mr.

legal

representation of the company-also encompasses a duty toward Oak
Plaza.

As explained in the Audit Report, Oak Plaza as Tower Oaks’

sole member “remains entitled to 100% of the profits, losses and
net

distributions

of

[Tower

Oaks].”

(ECF

No.

96-5,

at

4).

According to the Tower Oaks Operating Agreement, Oak Plaza’s
authorization is required for “major decisions” affecting Tower
Oaks’ property. (See ECF Nos. 104-5, at 3-4; 83-1, at 3-4).
result,

Mr.

McNutt

violated

his

duty

toward

Tower

As a

Oaks

in

disbursing the Funds without Oak Plaza’s permission.
Therefore,

Plaintiff’s

motion

for

summary

judgment

with

respect to Count II against Mr. McNutt will be granted as to
liability and Defendants’ cross-motion for summary judgment with
respect to Count II will be denied.

Mr. McNutt acknowledges in his supplemental declaration
that he indeed represented Oak Plaza in the Dissolution Case, whose
purpose was to “obtain control of the . . . Funds.” (ECF No. 979 ¶¶ 25, 39).
15

39

IV.

Remaining Issues
In

light

of

the

ruling

on

Count

I,

unjust

enrichment,

Defendants will be required to turn over the funds improperly
disbursed to each of them, but those amounts are not clearly
established.

As pointed out above, Plaintiff’s complaint seeks

varying amounts as to each defendant and an overall amount jointly
and

severally.

The

different amounts.

cross-motion

for

summary

judgment

seeks

(Compare ECF No. 2, with ECF No. 96-1).

Defendants advance various arguments for setoffs or recoupments,
giving rise to counter arguments by Plaintiff, such as lack of
clean hands.

For Count II, even Plaintiff’s cross-motion for

summary judgment asks for two different amounts against Mr. McNutt.
(ECF No. 96-1 ¶ 146).

At this juncture, it is premature to

determine the amount Defendants must repay. Thus, to the extent
that Plaintiff sought summary judgment on more than liability at
this stage, the motion is denied.
Resolution of the fraud related claims will require either
further briefing on summary judgment or trial, once the legal
framework is clarified.

And it is not clear what additional

damages are sought on those claims that are not recoverable under
Counts I and II.
V.

Conclusion
For

the

foregoing

reasons,

Defendants’

joint

motion

for

summary judgment will be denied; Plaintiff’s cross-motion for
40

summary judgment will be granted in part and denied in part; and
Defendants’ request for a hearing will be denied. A separate order
will follow.

/s/
DEBORAH K. CHASANOW
United States District Judge

41