United States District Court, D. Maryland, Northern Division
WILLIAM D. QUARLES, Jr., District Judge.
Fidelity & Guaranty Life Insurance Co. ("Fidelity") sued United Advisory Group, Inc. d/b/a Qintera Financial Group ("Qintera"), Joseph Roosevans, and James Stoddard, (collectively, the "defendants") for breach of contract, unjust enrichment, and fraud. ECF No. 63. Pending is Qintera's motion for leave to file a counterclaim with its answer to Fidelity's first amended complaint. ECF No. 78. No hearing is necessary. Local Rule 105.6 (D. Md. 2014). For the following reasons, Qintera's motion will be granted in part and denied in part.
This case arises from an alleged contractual relationship between Fidelity and the defendants, under which Qintera was authorized to sell Fidelity's insurance products. See ECF Nos. 63 ¶ 1, 63-4 at 2, 63-7 at 10. On or about June 21 and 22, 2012, Fidelity representatives met with Stoddard and Roosevans,  "part of the group from Defendant Qintera, " in Baltimore, Maryland, to negotiate the terms of a development loan agreement (the "Loan"). ECF No. 63 ¶¶ 16, 21. During these negotiations, at which Stoddard and Roosevans allegedly "represent[ed] themselves as well as Defendant Qintera, " Stoddard and Roosevans "prepared and presented" to Fidelity a "Business Plan Executive Summary' and an Implementation Plan' for Defendant Qintera." Id. ¶¶ 24, 29. The Executive Summary stated that Qintera would leverage its affiliation with Financial Resources of America, Inc. ("FRA") so that it would not "start from scratch" in selling Fidelity's products. See id. ¶ 30 (internal quotation marks omitted). The Executive Summary also stated that FRA would fund $250, 000 of Qintera's start-up expenses. Id. ¶ 45.
The Executive Summary described Stoddard's qualifications as President of Qintera, and the Implementation Plan assigned "numerous tasks" for Stoddard to complete for Qintera. Id. ¶¶ 40-41. Stoddard's participation in Qintera was a "critical factor" in Fidelity's decision to enter the Loan agreement. Id. ¶ 44.
The Loan was "made" as of August 1, 2012. ECF No. 63-2 at 2. Under the agreement, Fidelity agreed to lend Qintera $500, 000, and the defendants, "jointly and severally, " agreed to repay that amount with interest on or before the "maturity date." ECF Nos. 63 ¶ 2, 63-2 at 2. Paragraph 1(a) of the Loan Agreement defined "Maturity Date" as "12/31/2014, or such earlier date as the Note may become due by acceleration or demand." ECF No. 63-2 at 2.
Also on August 1, 2012, Stoddard signed a producer/agency form (the "Producer Form") for Qintera, which acknowledged that he had "received, read and agree[d] to be bound by the terms of [Fidelity's] Producer Agency/Agreement." ECF Nos. 63 ¶¶ 17-18, 63-6 at 2. By its terms, the producer/agency agreement (the "Producer Agreement") was "made and entered into" in the State of Maryland, and was to be governed by Maryland law. ECF No. 63-4 at 8.
On August 23, 2012, Fidelity wired $500, 000 to Qintera's account at Midland State Bank in Effingham, Illinois. ECF No. 48-1 ¶ 3. On October 9, 2012, Qintera fired Stoddard because of poor performance, "took steps to remove him as a corporate officer, " and asked Mr. Harry Stout, one of Qintera's directors, to replace him. ECF No. 78 ¶ 21. Stoddard contacted John Phelps, Fidelity Senior Vice President, to inform him of Stoddard's termination. Id. ¶ 22; see also ECF No. 83-1 at 1. According to Qintera, Fidelity did not want Stout - a former Fidelity CEO - involved, and used Stoddard's departure to "pull the plug on the venture..., and indeed do everything possible to ensure Qintera couldn't succeed." ECF No. 78 ¶¶ 23, 24.
Between October 11 and December 14, 2012, Qintera made "certain interest payments" on the loan. Id. ¶ 4. However, "[t]he entire principal balance remains outstanding." Id.
On October 24, 2012, Fidelity terminated its relationship with Qintera by letter and demanded payment of the loan. ECF Nos. 63 ¶¶ 7, 27, 63-3 at 2, 78 ¶ 25.
On or around October 30, 2012, Fidelity ended its producer agreement with Qintera and its agents. ECF Nos. 63-5 at 2; 78 ¶ 26. Qintera alleges that Fidelity "coerc[ed] its partners in Qintera to pull the plug on negotiations and putative contracts with third parties." ECF No. 78 ¶ 27. Fidelity also ended its "producer agreement with all other business entities associated with Qintera, ending [Qintera's] extremely lucrative and decades-long relationship with Financial Resources Planning, Inc. ("FRP")." Id. ¶ 28.
On January 3, 2013, Qintera sued Fidelity in Illinois state court for fraudulent inducement. ECF Nos. 83 at 5; 83-2.
On January 4, 2013, Fidelity filed suit in this Court on the basis of diversity jurisdiction. Count One alleged breach of contract against the defendants; Count Two alleged breach of contract against Stoddard and Roosevans individually. See ECF No. 1 at 6-7. Count Two alleged that Stoddard and Roosevans entered into the Loan agreement with "fraudulent intent" by materially misrepresenting Qintera's financial status, as well as their intentions "with respect to the use of the loan proceeds." Id. ¶¶ 35-36. Fidelity alleged entitlement to pierce the corporate veil and obtain relief from Stoddard and Roosevans because of their fraud and role as Qintera's "alter egos." Id. ¶ 40. Count Three alleged unjust enrichment against the defendants. Id. at 9. The amended complaint adds Count Four against FRA, alleging that Fidelity "is entitled to collect the debt owed by Defendant Qintera from Defendant FRA as its alter ego, " because "Qintera had no mind of its own." See ECF No. 63 ¶¶ 75, 79.
On January 25, 2013, following a hearing, the Court denied Fidelity's request to preliminary enjoin the defendants from proceeding against it in litigation in Illinois. ECF Nos. 16, 17. On January 29, 2013, Fidelity removed the action to the United States District Court for the Southern District of Illinois. ECF No. 83 at 5 n. 25. On March 14, 2013, Qintera voluntarily dismissed the suit. Id.
On January 29, 2014, the Court granted in part, and denied in part, Fidelity's motion to amend the complaint, and denied as moot Roosevan's motion to dismiss for failure to state a claim. ECF No. 62.
On March 30, 2014, Qintera moved for leave to file a counterclaim with its answer to the amended complaint. ECF No. 78. Count One of Qintera's proposed counterclaim alleges breach of contract; Count Two alleges breach of the implied covenant of good faith and fair dealing; and Count Three alleges tortious interference with contract and prospective advantage. Id. at 13-17. On May ...