United States District Court, D. Maryland, Southern Division
V. CHARLES DONNELLY, et al., Plaintiffs,
BRANCH BANKING AND TRUST CO., Defendant.
MEMORANDUM OPINION AND ORDER
W. Grimm United States District Judge.
action arises out of a mortgage loan from Defendant Branch
Banking and Trust Company ("BB&T") on a failed real
estate investment, secured by a deed of trust on the
investment property and guaranteed by Plaintiffs V. Charles
Donnelly and Deborah A. Steffen and their co-investors. After
continuing the previously scheduled trial and re-opening
limited discovery, the case is currently set for trial to
begin on Monday, July 11, 2016. See ECF No. 87.
Donnelly has filed a letter requesting permission to file a
motion to continue the trial yet again, Pl.'s Cont. Mot.,
ECF No. 93, which I have treated as a motion for a
continuance of the trial, see ECF No.
Because I have already continued the trial once and Donnelly
has failed to provide sufficient justification for why I
should continue the trial yet again, Donnelly's motion
for a continuance of the trial is denied. At my direction,
Plaintiffs have also filed supplemental briefing requesting
that I reinstate their negligence claim against BB&T, which I
previously dismissed on BB&T's motion for summary
judgment, in light of documents that BB&T failed to produce
initially and only produced after my summary judgment ruling.
Pls.' Neg. Mot., ECF No. 86. Because Plaintiffs have
failed to demonstrate how the production of these new
documents creates a tort duty after the execution of the
February 2012 extension, Plaintiffs' motion to reinstate
their negligence claim is denied.
incorporate by reference the factual background discussed in
my March 3, 2015, memorandum opinion, Summary Judg. Mem., ECF
No. 62. This case was previously set for trial to begin on
Tuesday, January 19, 2016. See Dec. 10, 2015, Letter
Order, ECF No. 75. On January 14, 2016, Donnelly filed a
motion to compel discovery, for sanctions, to re-open
discovery, and to continue the trial and request a hearing.
See ECF No. 79. On January 15, 2016, I held a
conference call with the parties regarding Donnelly's
motion. See Jan. 15, 2016, Letter Order, ECF No. 81.
I granted Donnelly's motion for a continuance and ordered
BB&T "to produce by February 1, 2016, any documents not
already produced to Plaintiffs relating to (1) the draft loan
extension and forbearance agreement produced by BB&T on
January 6, 2016, and (2) the February 2012 extension
agreement and Donnelly's execution of a deed of trust
regarding his 10% ownership of Solomons Two with respect
thereto." Id. I also permitted Plaintiffs to
provide supplemental briefing on whether my dismissal of the
negligence claim, see Summary Judg. Mem., ECF No.
62, "should be revisited in light of (i) the recent
document productions, (ii) any future documents produced
pursuant to this letter order, and (iii) the deposition(s)
taken pursuant to this letter order." Id.
Motion for a Continuance of Trial
has filed a motion for a continuance of trial on the basis of
a Maryland Court of Special Appeals order remanding a related
case to the Circuit Court for Calvert County to hear
Donnelly's motion to revise judgment on the basis of
alleged discovery wrongdoing on the part of BB&T.
See Pl.'s Cont. Mot. Donnelly admits that this
state court action is based on my January 15, 2016, Letter
Order, which directed BB&T to produce additional documents
relating to Plaintiffs' claims. BB&T now has produced
these documents, its former employee, Carol Taylor, was
deposed regarding the recently produced documents, and I have
ordered separate briefing in response to Donnelly's
discovery fraud allegations. But these allegations do not
relate to the substance of Donnelly's negligent
misrepresentation claim, which is scheduled for trial
starting on July 11, 2016. Further, because I find that there
is no basis to reinstate Plaintiffs' negligence claims
based upon the belatedly produced documents, there is no need
to postpone the trial a second time, particularly because
Plaintiffs can use the produced documents and the deposition
of Carol Taylor in presenting their negligent
misrepresentation claim. The postponement request therefore
Motion for Reinstatement of the Negligence Claim
March 3, 2015, Memorandum Opinion
Plaintiffs seek reinstatement of their negligence claim,
which I previously dismissed, I will reproduce my reasoning
from my March 3, 2015, memorandum opinion below:
It is "a longstanding principle of Maryland law that the
relationship of a bank to its customer in a loan transaction
is ordinarily a contractual relationship between a debtor and
a creditor and is not fiduciary in nature." Parker
v. Columbia Bank, 604 A.2d 521, 532 (Md. Ct. Spec. App.
1992). "‘The mere negligent breach of a contract,
absent a duty or obligation imposed by law independent of
that arising out of the contract itself, is not enough to
sustain an action sounding in tort.'" Jacques v.
First Nat'l Bank of Md., 515 A.2d 756, 759 (Md.
1986) (quoting Heckrotte v. Riddle, 168 A.2d 879,
882 (Md. 1961)). Where, as here, "the failure to
exercise due care creates a risk of economic loss only,
courts have generally required an intimate nexus between the
parties as a condition to the imposition of tort liability.
This intimate nexus is satisfied by contractual privity or
its equivalent." Id. at 759-60.
The Maryland Court of Special Appeals has recognized four
"special circumstances" that can give rise to a
tort duty between a bank and its customer where
the lender "(1) took on any extra services on behalf of
[the borrowers] other than furnishing the money for
construction of a home; (2) received any greater economic
benefit from the transaction other than the normal mortgage;
(3) exercised extensive control over the construction; or (4)
was asked by [the borrowers] if there were any lien actions
Parker, 604 A.2d at 533 (quoting Tokarz v.
Frontier Fed. Sav. & Loan Ass'n, 656 P.2d 1089, 1094
(Wash.Ct.App. 1982) ...