United States District Court, D. Maryland
JOHN H. MACSHERRY, JR., Plaintiff,
SPARROWS POINT, LLC, et al. Defendants
Lipton Hollander, United States District Judge
Macsherry, Jr., plaintiff, filed suit against defendants
Sparrows Point, LLC (“Sparrows Point” or
“SPLLC”); Commercial Development Company, Inc.
(“CDC”); and Michael Roberts, to recover a
commission of $825, 000 in connection with commercial
property that sold for $110, 000.00. See ECF
Plaintiff seeks relief under the Maryland Wage Payment and
Collection Law (“MWPCL”), Maryland Code (2016
Repl. Vol.) §§ 3-501 et seq. of the Labor
and Employment Article, as well as under theories of breach
of contract; promissory estoppel/detrimental reliance; and
quantum meruit. See ECF 2.
Memorandum Opinion, I consider “Plaintiff's Motion
to Amend His First Amended Complaint and to Reopen Discovery
Limited to the Issue of Fraudulent Conveyance” (ECF
47). It is supported by a legal memorandum (ECF 47-1)
(collectively, “Motion to Amend”) and numerous
exhibits. ECF 47-2 through ECF 47-12. In the Motion to Amend,
plaintiff seeks to file a Second Amended Complaint to add a
new defendant and a new claim. He also appends several new
exhibits. See ECF 47-3. Defendants oppose the Motion
to Amend (ECF 48, “Opposition”) and Macsherry has
replied. ECF 49 (“Reply”). In addition, I also
resolve “Defendants' Motion for Leave to File
Sur-Reply.” ECF 50 (“Motion for Surreply”).
The proposed Surreply is at ECF 50-1. Macsherry responded on
May 9, 2016 (ECF 51, “Response”). Defendants did
not reply, and the time to do so has expired.
motions have been fully briefed and no hearing is needed to
resolve them. See Local Rule 105.6. For the reasons
that follow, I shall deny the Motion for Surreply and I shall
deny the Motion to Amend.
Factual and Procedural Background
First Amended Complaint (ECF 26), Macsherry alleges that he
was employed jointly by Sparrows Point and CDC, as Vice
President of Leasing and Development. ECF 26 ¶¶ 1,
12. He avers that Roberts is an owner of both Sparrows Point
and CDC. ECF 47-2 at 3. Sparrows Point is a single-purpose
Missouri LLC that was “formed to acquire 3, 100 acres
of real property located at the Sparrows Point peninsula in
Baltimore County, formerly the site of the industrial complex
owned by Bethlehem Steel.” ECF 48 at 3. CDC is a
Missouri corporation that shares common management and human
resources personnel with Sparrows Point. ECF 26 ¶ 5.
Roberts, a Missouri resident, leads both entities.
Id. ¶¶ 5, 6. Macsherry “reported to
Robert Schoelch, Vice President of Defendant Commercial
Development, until Mr. Schoelch left the company in April
2014.” Id. ¶ 7.
to plaintiff, he was employed by both Sparrows Point and CDC,
either directly, as a single enterprise, or as joint
employers. Id. ¶ 8. In addition, he asserts
that Roberts was his employer “by virtue of his
leadership role with each entity and his direction and
control over employment decisions, including the payment of
wages . . . and the payment of the commission at issue . . .
asserts that in December 2012, “Defendants presented
Plaintiff Macsherry with a contract of employment . . .
.” Id. ¶ 12. Subsequently, Macsherry
received an edited copy of the document (the
“Contract”). At his deposition, Schoelch recalled
that he had drafted the Contract. See ECF 26-2;
ECF47-4 at 14-17. The Contract outlined Macsherry's
duties, as “Vice President of Leasing and
Development-Sparrows LLC.” ECF 26-2 at 2. He would,
Be directly responsible for the marketing and brokerage
efforts for the property; work directly with listing broker
and general counsel to negotiate lease and sale contracts.
Work with community organizations to increase the awareness
of property; be point person to identify international
customers and port related users for the site.
Be responsible for identifying appropriate local and state
economic development packages/incentives; understanding the
appropriate brown field entitlements and subsidies; work with
Site Manager to address master plan issues including utility
services, rail issues, zoning/subdivision issues, RET
addition, the Contract included that Macsherry's salary
would be $77, 000 per year and that Macsherry would be
entitled to a commission of “75 basis points paid on
the total value of any sales/leases or parcels on any deals
closed after the Start Date, Lafarge and Fritz deals
excluded.” Id. The draft included a start date
of “TBD, ” but Schoelch changed it to December
10, 2012. Id.
alleges that he signed the Contract in Saint Louis during a
meeting with Rebecca Lydon, the Chief Operating Officer of
CDC and Sparrows Point. ECF 47-6 at 12-16.Lydon advised
Macsherry that she would have Roberts sign the Contract and
that she would send him a copy. Id. at 16. Macsherry
never received a signed copy, however. See ECF 47-6
at 16; ECF 48-1 at 1-2.
September 9, 2014, Macsherry emailed a copy of the Contract
to Lydon. See ECF 47-3 at 31-34. On September 12,
2014, Macsherry received a letter from Lydon. ECF 26-3 at 2.
The top of the stationery contains the moniker,
“Sparrows Point LLC.” Id. Lydon stated,
in pertinent part, id. (emphasis in original):
As you are aware, the Sparrows Point site is under contract
with the sale expected to close soon. If the sale is
completed, please be advised that you will no longer be
employed by Sparrows Point LLC as of the date of closing.
All payroll earned to the closing date will be paid as well
as any vacation time earned but not yet taken on the next
regular payroll date.
Macsherry asserts, ECF 26 ¶ 20: “Following the
September 12, 2014 letter, Plaintiff Macsherry inquired
several times regarding the status of his commission of .75%
of the sale value.” Lydon stated at her deposition that
she took a copy of the email that Macsherry had sent her on
September 9, 2014, and put it on Roberts's desk. ECF 47-8
at 3-4. Later that afternoon, Lydon sent an email to Roberts
and three others, stating, ECF 47-9 (emphasis in original):
“John MacSherry [sic] is trying to get a hold of me--I
am NOT returning the call, just so you know.” Macsherry
followed up with Lydon by email on September 13, 2014, and
again on September 17, 2016, requesting information about his
commission. See ECF 47-1 at 9; ECF 47-3 at 36.
Macsherry also claims that he tried to reach Roberts by phone
and by email on September 10, 2014. See ECF 47-1 at
9; ECF 47-10.
Point sold the property for $110, 000, 000 in a transaction
that closed on September 17, 2014. ECF 47-7 at 12. Roberts
testified at his deposition that, within a week or two of the
closing, most of the net proceeds of sale were disbursed.
Id. at 14-15. Macsherry maintains that the transfer
was made even though defendants knew of plaintiff's claim
for a commission. ECF 47-1 at 6. Although Roberts initially
denied that he knew of Macsherry's claim as of the time
of the transfer of funds, he subsequently acknowledged that
he previously had a conversation with plaintiff about his
claim. Roberts said, id. at 13: “But . . . at
that point . . . we didn't know if he was serious or
again tried to reach Roberts on September 19, 2014 (ECF
47-11), and finally spoke with Roberts on September 25, 2014.
ECF 47-1 at 9. Macsherry testified at his deposition that
Roberts indicated that he did not think Macsherry deserved as
big a commission as was promised in the Contract, and that he
would contact Macsherry later with another offer. ECF 47-6 at
18. Macsherry sent an email to Roberts the same day,
referencing the telephone call and including as an attachment
the Contract negotiated in December 2012. ECF 47-12. On the
same date, Roberts forwarded the email to his brother, Thomas
Roberts, and wrote: “Need to discuss[.]”
Id. According to plaintiff, Roberts never contacted
Macsherry to discuss a settlement. ECF 47-1 at 9. Roberts
testified at his deposition that he told Thomas Roberts, at a
meeting soon after: “I'm sure [the dispute] is
going to end up in litigation . . . .” ECF 47-7 at
10-11. Moreover, Thomas Roberts knew of the Contract.
Id. at 11.
suit followed. In response, defendants filed a motion to
dismiss, pursuant to Fed.R.Civ.P. 12(b)(6). ECF 9. By Order
of May 21, 2015 (ECF 19), I denied the motion as to Sparrows
Point and CDC, but granted the motion with respect to the
claims against Roberts, with leave to amend.
issued a Scheduling Order on July 2, 2015 (ECF 21), which set
July 31, 2015, as the deadline for the amendment of pleadings
and October 29, 2015, as the deadline for discovery.
Id. Plaintiff filed his First Amended Complaint (ECF
26) on July 7, 2015, renewing his claims against Roberts.
Id. CDC and Sparrows Point timely answered (ECF 28),
but Roberts again moved to dismiss, pursuant to Rule
12(b)(6). ECF 29. By Memorandum Opinion and Order of October
23, 2015 (ECF 38; ECF 39), I dismissed the claims against
Roberts, with the exception of the alleged violation of the
MWPCL. See ECF 39. Roberts submitted an Answer to
that claim on November 6, 2015. ECF 42.
October 9, 2015, while the Motion to Dismiss was pending, the
parties filed a “Joint Motion to Modify the Scheduling
Order” (ECF 35), which I granted by Order of the same
day. ECF 36 (the “Amended Scheduling Order”). The
Amended Scheduling Order extended the discovery deadline to
January 29, 2016, and set a new deadline for dispositive
motions of February 29, 2016. ECF 36.
parties filed a “Joint Status Report” on January
29, 2016. ECF 43. The Joint Status Report notified the Court,
for the first time, id.: “Plaintiff intends to
file a motion for leave to amend his complaint to add claims
for fraud and/or fraudulent conveyance against Defendants
Michael Roberts and Sparrows Point, LLC as well as to add
three (3) new defendants for the same causes of action . . .
.” Defendants noted their intent to oppose that motion.
Id. A briefing schedule was discussed during a
conference call on February 29, 2015. See Docket.
The briefing schedule followed. See ECF 45; ECF 46.
submitted his Motion to Amend on March 4, 2016 (ECF 47),
which includes a memorandum of law (ECF 47-1), and more than
two dozen exhibits. ECF 47-2 through ECF 47-12. In
particular, plaintiff seeks to file a Second Amended
Complaint to add a new defendant, Thomas Roberts, and a new
claim - fraudulent conveyance, under Maryland law.
See Maryland Code (2013 Repl. Vol., 2016 Supp.),
§§ 15-201 et seq., of the Commercial Law
Article; ECF 47-1 at 5-14; see also ECF 47-3
to plaintiff, in December 2015, “[d]uring the course of
the St. Louis depositions, Plaintiff became aware of the
existence of an additional claim for fraudulent
conveyance.” ECF 47-1 at 2; 3 n. 2. He alleges that
“two Unknown Trusts received substantial funds in
violation of Maryland's Uniform Fraudulent Conveyance Act
. . . . These trusts are identified by Defendant Sparrows
Point as the ‘Roberts family
trusts.'” ECF 47-1 at 2. Further,
plaintiff argues, id. at 13-14:
While on actual notice of Plaintiff's claim to an $825,
000.00 commission and Plaintiff's intention to file a
lawsuit for the commission, Mike Roberts and his brother, Tom
Roberts, caused Sparrows Point to transfer nearly all of the
proceeds from the Property's sale from Sparrows
Point's bank account to the Roberts family trusts. The
transfer was not made in exchange for any consideration, left
the LLC with insufficient funds to pay Plaintiff's $825,
000.00 commission and, as Plaintiff alleges in his amended
pleading, was done for the purpose of placing the funds out
of Plaintiff's reach in any subsequent lawsuit.
oppose the Motion to Amend as untimely. ECF 48 at 1-2. They
argue there is no good cause as to why plaintiff took three
months from the time that he learned of the new claim for
fraudulent conveyance on December 2, 2015 to file the Motion
to Amend. Id. They also argue that they would be
prejudiced by the addition of a new claim and a new
defendant. Id. at 10. In this regard, they point to
additional discovery burdens in a case where discovery has
closed, prejudicial delay of the proceedings, and the lack of
prejudice to plaintiff, who can pursue a fraudulent
conveyance claim if he prevails in this case. Id. at
13-15. Further, defendants argue futility, based on lack of
personal jurisdiction. Id. at 15-21.
addition, defendants claim plaintiff has waived his right to
a jury trial. Therefore, they maintain that he is “not
entitled to resuscitate that right through amending the
complaint.” ECF 48 at 21.
their Motion for Surreply (ECF 50), defendants argue that, in
his Reply, plaintiff introduced new arguments as to (1) a
previous discovery request, (2) the potential for additional
discovery that would result from granting the Motion to
Amend, and (3) the request for a jury trial. ECF 50-1 at 1-5.
Plaintiff disagrees. ECF 51.
The Motion for Surreply
Rule 105.2(a) provides that a party is not permitted to file
a surreply without permission of the court. The filing of a
surreply “is within the Court's discretion,
see Local Rule 105.2(a), but they are generally
disfavored.” EEOC v. Freeman, 961 F.Supp.2d
783, 801 (D. Md. 2013), aff'd in part, 778 F.3d
463 (4th Cir. 2015); see also, e.g., Chubb &
Son v. C & C Complete Servs., LLC, 919
F.Supp.2d 666, 679 (D. Md. 2013). A surreply may be permitted
“when the moving party would be unable to contest
matters presented to the court for the first time in the
opposing party's reply.” Clear Channel Outdoor,
Inc. v. Mayor & City Council of Baltimore, 22
F.Supp.3d 519, 529 (D. Md. 2014) (quotations and citations
omitted). However, a surreply is not permitted where the
nonmoving party, in its reply, merely responds to an issue
raised by the moving party in its opposition. See Khoury
v. Meserve, 268 F.Supp.2d 600, 605- 06 (D. Md. 2003).
This is because, in that posture, the moving party had the
opportunity to fully support its arguments in the opposition
and the surreply would not be the first time that the party
could respond. Id. at 606.
argue that plaintiff made three new arguments in his Reply.
See ECF 50-1. First, defendants submit, id.
at 1: “Plaintiff attaches to his Reply an irrelevant
discovery request seeking all of [Sparrow's Point's]
financial information. [Sparrows Point] previously objected
to this request due to its breathtakingly overbroad nature
and complete lack of connection to the sole issue in this
case . . . .” According to defendants, “the Reply
brief is the first time Plaintiff has ever suggested that the
objection was improper.” Id. at 2. Second,
defendants contend that, for the first time, plaintiff argued
in the Reply that “should his Motion be granted, there
will be no meaningful additional delay because this Court can
severely curtail the right of new (and existing) ...