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Tauber v. Souza

United States District Court, Fourth Circuit

May 10, 2013

ANITA TAUBER, Plaintiff/Counter-Defendant,
CYNTHIA SOUZA, Defendant/Counter-Plaintiff.


PAUL W. GRIMM, District Judge.

This Memorandum and Order addresses Plaintiff/Counter-Defendant Anita Tauber's Motion for Partial Summary Judgment and supporting memorandum ("Pl.'s Mem."), ECF No. 28; Defendant/Counter-Plaintiff Cynthia Souza's Cross-Motion for Summary Judgment and/or to Dismiss Any Remaining Claims for Lack of Jurisdiction, ECF No. 30; Defendant/Counter-Plaintiff's Memorandum in Opposition to Plaintiff/Counter-Defendant's Motion and in Support of Defendant/Counter-Plaintiff's Cross-Motion ("Def.'s ECF No. 31; Plaintiff/Counter Defendant's Reply & Opposition ("Pl.'s Reply"), ECF No. 32; and Defendant/Counter-Plaintiff's Surreply & Reply ("Def.'s Reply"), ECF No. 33. I find that a hearing is unnecessary in this case. See Local Rule 105.6. For the reasons stated below, Plaintiffs Motion for Partial Summary Judgment is DENIED, and Defendant/Counter-Plaintiff's Cross-Motion for Summary Judgment and/or to Dismiss Any Remaining Claims for Lack of Jurisdiction is DENIED.


In 2004, Tauber and Souza, two realtors, entered into a partnership ("Partnership"), governed by a Memorandum of Understanding ("MOU"), Compl. Ex. A, ECF No. 1-1, which they amended in 2006 ("1st Am."), Compl. Ex. B, ECF No. 1-2. MOU 1. The purpose of the MOU was "to introduce" Souza to the clientele that Tauber, who recently had moved to Florida, had established in Maryland and Washington, D.C., and "to assist [Souza] in a smooth transition to the Referral Stage, " in which Tauber would be less involved in the Partnership. Id. § 8. Pursuant to the MOU, each partner would "exert her best effort to assist the other with the business of selling, buying or renting real estate in Maryland or Washington. D.C." Id. § 4. The MOU provides that, during the initial "Equal Partner Stage" from September 1, 2004 through December 31, 2007, each partner would "receive 50% of the Partnership net revenues" and "be responsible for 50% of the Partnership expenses." Id. § 6.a; 1st Am. § 2. Thereafter, in the "Referral Stage, " Tauber would receive "a Referral Fee" that would decline from 40% to 10% during the remainder of the Partnership, which would terminate on December 31, 2013. MOU §§ 2 & 6.b; 1st Am. §§ 1-3. The MOU also provides that "no Partnership assets, including... the Partnership client list... shall be sold, assigned, or transferred to any third party (hereinafter, a Sale') without the express written consent of both [Tauber and Souza]." MOU § 10.

Tauber claims that the parties exchanged "reconciliation[s] of the Partnership's expenses for 2006 and 2007, " but never resolved how much Tauber owed. Compl. §§ 12-13, ECF No. 1. According to Tauber, Souza "refused to pay Ms. Tauber certain referral fees[;].... improperly charged Ms. Tauber for certain Partnership expenses[; and]... failed to keep Ms. Tauber regularly informed of her activities in connection with the business of the Partnership.'" Compl. §§ 15-16 (quoting MOU § 9). On that basis. Tauber filed a two-count complaint for breach of contract and unjust enrichment.[1] Compl. §§ 17-22. Souza filed a Counterclaim, alleging that Tauber breached the MOU when she "failed and/or refused to reimburse Ms. Souza for half" of the business expenses incurred in the Equal Partner Stage, and also when she "caused a third party. Tauber Real Estate Services, LLC to send marketing materials to individuals on the Partnership Client List." Am. Countercl. §§ 4-5 & 9-10, ECF No. 23.


Summary judgment is proper when the moving party demonstrates, through "particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations..., 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); see Baldwin v. City of Greensboro, No. 12-1722, ___ F.3d ___, 2013 WL 1866940, at *3 (4th Cir. May 6, 2013). When considering cross-motions for summary judgment, the court must consider "each motion... individually" and view "the facts relevant to each... in the light most favorable to the non-movant." Mellen v. Bunting, 327 F.3d 355, 363 (4th Cir. 2003). If the party seeking summary judgment demonstrates that there is no evidence to support the nonmoving party's case, the burden shifts to the nonmoving party to identify evidence that shows that a genuine dispute exists as to material facts. See Celotex v. Catrett, 477 U.S. 317 (1986). The existence of only a "scintilla of evidence" is not enough to defeat a motion for summary judgment, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 (1986). Instead, the evidentiary materials submitted must show facts from which the finder of fact reasonably could find for the party opposing summary judgment. Id.


A. Statute of Limitations

Souza insists that Tauber's claims from prior to December 19, 2008 are barred by the statute of limitations, such that summary judgment in Souza's favor is appropriate on those claims. Def.'s Mem. 9, 16-17. Tauber disagrees, contending that, because the parties were partners. the "continuation of events' principle" tolled the statute of limitations until Tauber became aware of the harm. Pl.'s Reply 7.

Maryland law[2] imposes a three-year statute of limitations on breach of contract actions. Md. Code Ann., Cts. & Jud. Proc. § 5-101. The date of accrual begins when "the plaintiff discovers, or through the exercise of due diligence, should have discovered, the injury." Frederick Rd. Ltd. P'ship v. Brown & Sturm, 756 A.2d 963, 973 (Md. 2000). Yet, "under the continuation of events' principle, a harmed party's duty to investigate claims against a fiduciary for statute of limitations purposes is relaxed during the existence of the relationship." Dual Inc. v. Lockheed Martin Corp., 857 A.2d 1095, 1108 (Md. 2004) (citing Frederick Rd., 756 A.2d at 974-75). Nonetheless, even in a fiduciary relationship, "the statute of limitations would begin to run against an aggrieved party if that party had knowledge of facts that would lead a reasonable person to undertake an investigation that, with reasonable diligence, would have revealed wrongdoing on the part of the fiduciary." Dual, Inc., 857 A.2d at 1108; see Frederick Rd., 756 A.2d at 976.

Here, the parties, who are partners in the Partnership, are in a fiduciary relationship. See Lasater v. Guttman, 5 A.3d 79, 93 (Md. Ct. Spec. App. 2010); Buxton v. Buxton, 770 A.2d 152, 164 (Md. 2001). Therefore, the question is when Tauber knew or should have known of Souza's alleged wrong, given their relationship. This is not a question that the Court ordinarily answers on summary judgment. See Dashiell v. Meeks, 913 A.2d 10, 22 (Md. 2006). Rather, "the ultimate factfinder" typically determines "whether the plaintiff failed to discover the cause of action because he failed to exercise due diligence or whether he was unable to discover it (and, as a result, unable to exercise due diligence) because the defendant concealed the wrong." Id. ; see Frederick Rd., 756 A.2d at 976.

According to Tauber, she did not become aware of the harm until August 2011. Pl.'s Reply 7. Tauber contends that she "did not do an accounting of partnership revenues or expenses, because the parties trusted each other." Id. at 3. Further, in her view, the earliest that perhaps she "should have become suspicious" was "in May 2009 after Ms. Tauber requested rental commissions and Ms. Souza failed to respond, " a date which preceded the filing of this lawsuit by less than three years. Id. at 3 n. 1. Souza counters that, according to Tauber's sworn testimony, Tauber has known since 2004 that Souza owed her rental commissions. Def.'s Reply 6.

Certainly, in Tauber's Objections and Answers to Defendant's First Set of Interrogatories, Tauber stated that she has "been aware of rental commissions being owed to [her] since entering into the MCAT'" in 2004. Pl.'s Answers to Interrogatories 5, Def.'s Mem. Ex. 7, ECF No. 31-7. Yet, in the same answer, Tauber explained that, "[t]o assist Ms. Souza in covering her share of the partnership's expenses, Ms. Tauber permitted Ms. Souza to defer payment on rental commissions owed to Ms. Tauber until Ms. Souza generated sufficient income to cover her share of the partnership expenses." Id. Neither party has pointed to any evidence that indicates when Souza had to begin payment on rental commissions. When Tauber should have known that Souza was not, but should have been, paying rental commissions is a question for the ultimate factfinder, See Dashiell, 913 A.2d at 22; Frederick Rd., 756 A.2d at 976. Similarly, neither party has identified any evidence showing when Tauber knew, or should have known, how much she should have been, but was not, paid in sales commissions. This, ...

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