United States District Court, D. Maryland
CATHERINE C. BLAKE, District Judge.
Plaintiff Norman Willox brings this action against Michael Ladas, EPIC Yachting LLC ("EPIC"), and Mid Atlantic Marine Group LLC ("MAMG") for breach of contract, conversion, breach of fiduciary duty, constructive fraud, and fraudulent conveyance. Defendant Ladas filed counterclaims for breach of contract, unjust enrichment, and fraudulent inducement. The defendants' motion for summary judgment and the plaintiff's motion to dismiss Ladas's counterclaims and to amend his own complaint are pending. (ECF Nos. 20, 42, 43.) The parties have fully briefed the issues and no oral argument is necessary. See Local Rule 105.6 (D. Md. 2014). For the reasons stated below, the motions to dismiss and for summary judgment will be granted, and Willox's motion to amend his complaint will be denied.
On September 2, 2008, Willox entered into a Membership Interest Purchase Agreement ("MIPA") with MAMG. (MIPA, ECF No. 43-3). Ladas was the manager of MAMG. (Operating Agreement, ECF No. 47-6, § 1.01(p).) Under the terms of the MIPA, Willox obtained a one-third membership interest in MAMG. (MIPA § 1.01.) In exchange, Willox agreed to provide $300, 000 to secure financing to buy a new Ocean Alexander yacht ("the OA74"),  to execute a personal guarantee for the financing, and to make monthly contributions to pay for interest payments, insurance, maintenance, and other costs ("the carrying costs") related to the OA74. ( Id. § 1.03.) Under the MIPA, "upon request of [Willox], " MAMG was to provide access to "copies of all [MAMG] books and records applicable to determination of amounts due" to cover the OA74's carrying costs. ( Id. )
Although Willox had a membership interest of one-third in MAMG, his "Economic Interest" was limited to "revenues and expenses related only to the [OA74]." ( Id. at § 2.01.) Specifically, the MIPA conferred on Willox fifty percent of any net profits earned from the OA74 and one-hundred percent of any net losses. ( Id. § 2.01.) It expressly provided that Willox did not acquire an economic interest in any other component of MAMG's inventory or operations. ( Id. ) "Upon sale of the [OA74] to a third party by [MAMG], " the MIPA provided that the sale "funds shall be distributed to [Willox] in accordance with the flow of funds" set out in the MIPA. ( Id. § 2.01; see also id. Ex. A.) Upon the yacht's sale, the MIPA also obligated MAMG to return Willox's initial investment used to obtain financing. ( Id. § 3.06.)
MAMG purchased the OA74 on September 22, 2008, for $2, 268, 835. (Willox Aff., ECF No. 47-3, ¶ 12; April 2012 Accounting Records, ECF No. 47-19, at 1.) There is no evidence in the record that Willox made monthly payments for the OA74's carrying costs as agreed in the MIPA. Instead, Willox had MAMG sell a 2005 Cruisers Motoryacht ("the Cruisers") in June 2009 and reinvested the proceeds-$241, 300-back into MAMG. (Cruisers Purchase Agreement, ECF No. 47-8; Willox Dep., ECF No. 43-2, at 77:1-12; April 2012 Accounting Records, at 1.) Willox claims that MAMG and Ladas never provided him with invoices as to the OA74's carrying costs. Although in his affidavit Willox claims he routinely asked for such information, (Willox Aff., ECF No. 47-3, ¶¶ 13-16), in his deposition, he stated he did not recall ever asking for the information during the period that MAMG owned the OA74, (Willox Dep. at 81:7-82:6). Further, Willox testified in his deposition that, despite Ladas offering him access to MAMG's online accounting records, he never took him up on the offer. ( Id. at 80:8-81:2.)
On October 27, 2009, MAMG sold the OA74 for a "net purchase price" of $2, 535, 000. (OA74 Purchase Agreement, ECF No. 43-5, at 1.) The buyer paid the purchase price with $1, 485, 000 in cash and a vessel, a Hatteras 55 Convertible ("the Hatteras"), with a trade allowance of $1, 050, 000. ( Id. at 1.) Further, according to the OA74 Purchase Agreement, MAMG was to pay for the yacht's storage costs through May 2010. ( Id. at 3).
After the sale, in Willox's capital account, Ladas recorded the cash payment as well as what Ladas estimated would be the sale value of the Hatteras, which was far less than the $1, 050, 000 trade allowance listed in the OA74 Purchase Agreement. (August 2010 Accounting Records, ECF No. 47-7, at 3; Ladas Dep., ECF No. 47-11, at 122:16-21.) According to Ladas, any correspondence related to the OA74 sale would have indicated that the final value of the sale would not be determined until the Hatteras sold, (Ladas Dep. at 122:11-21), although there is no evidence of any such correspondence. The Hatteras ultimately sold for $630, 000, in February 2011, and that amount was credited to Willox's capital account. (April 2012 Accounting Records, ECF No. 47-8, at 1.) If that value is used to measure the final sale price of the OA74, then the vessel sold at a loss of over $150, 000. Under the terms of the MIPA, Willox would be responsible for such a loss. (MIPA § 2.01.)
Willox claims that Ladas improperly calculated the profits, or losses, from the OA74's sale by using the ultimate sale price of the Hatteras instead of the purchase price of the OA74 at the time it was sold. According to Willox, instead of paying him what he was owed after the sale, MAMG, and Ladas as its manager, misrepresented the result of the sale and converted the profits due to Willox toward other ventures and accounts.
Willox filed this suit on May 13, 2013. He seeks damages for breach of contract, conversion, and fraudulent conveyance by MAMG, and another of Ladas's companies, EPIC, which Willox alleges is a successor in interest to MAMG. He also seeks damages from Ladas, individually, for conversion, breach of fiduciary duty, constructive fraud, and fraudulent conveyance. Ladas counterclaimed for breach of contract and unjust enrichment. His claims are based on allegations that Willox never paid the carrying costs for the OA74 and the Hatteras, never paid for losses suffered on the sale of the OA74, and used MAMG's brokerage services to sell the Cruisers without paying for such services.
I. Willox's Motion to Dismiss Ladas's Counterclaims
When ruling on a motion under Federal Rule of Civil Procedure 12(b)(6), the court must "accept the well-pled allegations of the complaint as true, " and "construe the facts and reasonable inferences derived therefrom in the light most favorable to the plaintiff." Ibarra v. United States, 120 F.3d 472, 474 (4th Cir. 1997). "Even though the requirements for pleading a proper complaint are substantially aimed at assuring that the defendant be given adequate notice of the nature of a claim being made against him, they also provide criteria for defining issues for trial and for early disposition of inappropriate complaints." Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009). "The mere recital of elements of a cause of action, supported only by conclusory statements, is not sufficient to survive a motion made pursuant to Rule 12(b)(6)." Walters v. McMahen, 684 F.3d 435, 439 (4th Cir. 2012) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). To survive a motion to dismiss, the factual allegations of a complaint "must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citations and footnote omitted). "To satisfy this standard, a plaintiff need not forecast' evidence sufficient to prove the elements of the claim. However, the ...