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Callendar v. Anthes

United States District Court, D. Maryland

April 18, 2014



DEBORAH K. CHASANOW, District Judge.

Presently pending and ready for review in this defamation case are four motions: (A) a motion to remand filed by Plaintiffs Donald J. Callender and Convergence Management Associations, LLC d/b/a Convergex Caribbean Ltd. (ECF No. 28); (B) a motion to dismiss filed by Defendants Douglas Anthes and Dreamer's Entertainment Club, LLC. (ECF No. 11); and (C) two motions to seal: one filed by Defendants and one filed by Plaintiffs. (ECF Nos. 15 and 33). The issues have been briefed and the court now rules, no hearing being deemed necessary. Local Rule 105.6. For the following reasons, the motions to seal will be denied. The motion to remand will be granted and the case will be remanded to the Circuit Court for Calvert County, Maryland.

I. Background

Plaintiff Donald J. ("DJ") Callender is head of Plaintiff Convergence Management Associates, LLC d/b/a Convergex Caribbean, Ltd. Both are citizens of Maryland. Convergex acts as an investor matchmaker: organizations and individuals come to Convergex seeking private capital investment. Convergex evaluates the investment and then puts them in touch with potential investors.

Defendant Douglas Anthes is the agent of Defendant Dreamer's Entertainment Club, LLC. Both are citizens of Arizona. Mr. Anthes - through Dreamer's - proposed a "start-up business offering [a] completely new concept to the multi-entertainment industry in the Phoenix area... a concept combining the traditional entertainment center (bowling, billiards, and sports bar) and adding the thrill of racing and nightclub scene with dancing and music." (ECF No. 2 ΒΆ 6, Verified Complaint). Defendants sought approximately $5, 000, 000 of funding.

In June 2013, Mr. Anthes contacted Convergex to find investors. On June 11, 2013, the parties signed a "Mutual Non-Circumvention, Non-Disclosure Agreement" ("NDA"). Three paragraphs of the NDA are relevant here:

(2) The parties will maintain complete confidentiality regarding each other's business methods, processes, Source(s) and/or affiliates and will disclose such only to parties named in advance, pursuant to express written permission of the Party who had made available said source.
(4) The parties will not disclose any name(s), address(es), telephone/facsimile number(s) of any contact(s) revealed by either party to any third party.
(8) This Agreement is valid for any and all transaction(s) between the parties hereto and is enforceable only in the Courts of the State of Maryland, Calvert County, United States of America, and the signing Parties hereby accept such selected jurisdiction as the exclusive venue for the resolution of any dispute(s).

(ECF No. 2, Ex. A). The parties subsequently signed a "Financial Services Agreement" ("FSA"). The FSA is dated June 24, 2013, although Defendants contend that it was in fact signed in August 2013. The FSA required Defendants to pay a $4, 000 fee to meet with Plaintiffs and a $21, 000 "Good Faith Deposit." If Plaintiffs failed to bring a willing and capable funding source forward to Defendants, the $21, 000 would be refunded immediately, upon demand. (ECF 2-1, at 5). Relevant for present purposes are two clauses of the FSA:

2.C: The Parties agree that the names, locations and contact data of Source(s), which [Plaintiffs] present to [Defendants] represent valuable information, which may not be disclosed at any time, except with the prior written consent of [Plaintiffs]. To be most clear: [Defendants] shall keep the identity, as well as the content of discussions, negotiations and/or terms of this Agreement or Agreements with any and all Sources in the strictest of confidence, revealing such to no person - to specifically include Intermediaries - at any time, for any reason or Client shall be in material default of this Agreement.
This provision of the Agreement between the Parties requires Client initials here with the specific understanding that it will survive the termination or expiration of the Agreement, as a whole.
7.B: This Agreement shall be governed by and construed in accordance with the laws of the State of Maryland and shall be deemed to have been accepted and entered into at [Convergex Caribbean, Ltd.]'s place of business in Prince Frederick, Maryland.

(ECF No. 2-1, at 4-5, 7) (emphases in original).

On July 23, 2013, Mr. Anthes wired $4, 000 to Plaintiffs to secure a meeting. They met at a restaurant in Washington, DC on August 3, 2013. Mr. Anthes wired the $21, 000 balance of the Good Faith Deposit to Plaintiffs on August 13, 2013. The next day, Defendants received an email from Signature Equity Services Group in Nashville, Tennessee, to schedule a call. On August 16, 2013, following the call, Signature sent a financial services agreement setting forth a non-refundable initial underwriting fee of $15, 900. Defendants could not afford this and subsequently learned that Signature's corporate status had been administratively dissolved on August 13, 2013, two days before the call. On August 19, 2013, Mr. Anthes called Mr. Callender and let him know that he could not pay Signature's underwriting fee and demanded return of his $21, 000 Good Faith Deposit. Mr. Callender refused. The next day Mr. Anthes - through email and telephone - told Plaintiffs that either they fully refund the Good Faith Deposit or he will "publicize this scandal" and "go to the FBI, IRS, Better Business Bureau, and the States Attorney's Offices of Maryland and Arizona." Mr. Anthes made good on his promise and posted several allegedly defamatory postings to multiple consumer protection websites. ( See ECF No. 2-1, at 9-15).[1]

On October 15, 2013, Plaintiffs' counsel sent a cease and desist letter to Defendants, demanding that they stop posting defamatory statements and immediately remove the ...

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