United States District Court, D. Maryland
William M. Nickerson Senior United States District Judge
the Court is a Motion for Summary Judgment filed by
Defendants Chemence, Inc. (CI) and Chemence Medical Products,
Inc. (Chemence Medical). ECF No 26. The motion is fully
briefed. Upon review of the filings and the applicable case
law, the Court determines that no hearing is necessary, Local
Rule 105.6, and that the motion should be granted.
FACTUAL  AND PROCEDURAL
action was initially filed as an adversary action in the
bankruptcy case of Debtor Commerce, LLC. (Commerce).
Plaintiff Zvi Guttman is the Debtor's Chapter 7 Trustee.
Commerce was once a major wholesale distributor of lawn,
garden, outdoor living, and holiday products. Malcolm Cork
was the president of Commerce from 2004 until August 2012,
when his employment was terminated.
while still the president of Commerce, formed a new company,
Medical Solutions International, Inc. (Medical Solutions), of
which he was the sole owner. On or about January 8, 2011,
Medical Solutions entered into a Sales, Marketing and
Distribution Agreement (Sales Agreement) and a License
Agreement with Chemence Medical, an enterprise which is
engaged in the manufacture of medical adhesives. The Sales
Agreement established Medical Solutions as a distributor for
a particular medical adhesive manufactured by Chemence
Medical, SUREࢳ®, and the License Agreement permitted
Medical Solutions to use the trademark for that product in
its marketing efforts. Under the terms of the License
Agreement, Medical Solutions was to pay Chemence Medical the
sum of $750, 000.00 in four installments: one for $100,
000.00; one for $275, 000.00; and two for $187, 500.00. On or
about July 15, 2011, Cork caused Commerce to wire $187,
500.00 from Commerce's account to Chemence Medical and
represented to Chemence Medical that this was Medical
Solutions' third required payment under the License
Agreement. Cork represented to Chemence Medical that he had
the authority to make this wire transfer.
August of 2012, Commerce filed a suit in this Court against
Medical Solutions relating to a $150, 000.00 Commerce check
that Cork allegedly had issued to Medical Solutions.
Commerce LLC v. Med. Solutions Int'l, Inc. Civ.
No. WMN-12-2393. Also in August 2012, Commerce filed a
separate suit in this Court against Cork alleging that he had
breached his agreement to repay a $450, 000.00 shareholder
loan made to him by Commerce. Commerce LLC v. Cork,
Civ. No. RDB-12-2513. These cases were consolidated. On
January 18, 2013, Commerce and Commerce's chairman of the
board and president, Richard Lessans, entered into a
Settlement Agreement with Cork, Cork's wife, and Medical
Solutions which purported to resolve any and all claims
between the parties. ECF No. 26, Ex. 8. That Settlement
Agreement provided that “[t]he parties wish to enter
into a complete and final resolution of all disputes,
business dealings and other matters between them and related
Parties, and have reached a full, complete, voluntary and
amicable settlement of any and all disputes, claims and
causes of action between them.” Id. at 4. The
agreement specifically identified as one of the claims being
settled the “$187, 500, paid via wire transfer on or
about July 15, 2011, and noted that “this claim is not
the subject of a currently pending lawsuit, but has been
asserted in correspondence between legal counsel.”
Id. at 2.
to the Settlement Agreement, Cork made an initial payment of
over one half a million dollars. On February 19, 2013, the
parties submitted a stipulation of dismissal, with prejudice,
which the Court granted on February 21, 2013. Cork, however,
has defaulted on subsequent payments due under the Settlement
Agreement. On March 20, 2014, Cork was indicted in this Court
on wire fraud charges related to the July 15, 2011, wire
transfer of funds from Commerce to Chemence Medical.
United States v. Cork, Crim. No.
March 26, 2014, Cork and Medical Solutions entered into an
Asset Purchase Agreement with Chemence Medical. Under the
terms of that agreement, Chemence Medical purchased back
Medical Solution's SUREࢳ® business and related
assets, including the license to use the SUREࢳ®
trademark, for the sum of $1, 060, 000.00. The agreement also
included an indemnification provision whereby Medical
Solutions and Cork agreed to indemnify Chemence Medical for
any losses, damages, or liabilities related to Medical
Solutions' business operations.
February 13, 2015, Plaintiff filed the instant adversary
action seeking to recover from Chemence Medical the $187,
500.00 that was wired to it by Cork. The Complaint includes
counts for “Unjust Enrichment” (Count I),
“Constructive Trust” (Count II),
“Declaratory Relief” (Count III), and
“Turnover” (Count IV) and names the following
entities as Defendants: Chemence Medical; CI; Chemence
Medical, Inc.; and Chemence, LLC. Chemence Medical and CI have
answered the Complaint, the other two entities have not. On
July 1, 2015, this Court granted a motion filed by Chemence
Medical and CI, and opposed by Plaintiff, to withdraw the
reference over this action to the bankruptcy court. ECF No.
5. On July 8, 2015, Chemence Medical filed a third party
complaint against Cork and Medical Solutions for
indemnification. On January 7, 2016, the Clerk of the Court
entered default against the third party defendants for want
Medical and CI have now moved for summary judgment as to all
claims brought against them. Defendant CI asserts that it had
no connection, whatsoever, with the wire transfer and has
never conducted business with Commerce, Medical Solutions, or
Cork. Chemence Medical argues that Commerce fully and finally
settled all claims related to the wire transfer when it
settled the previous suits against Cork and Medical
Solutions. In the alternative, Chemence Medical argues that
it was not unjustly enriched by the wire transfer because it
provided equivalent value for the payment in the form of the
SUREࢳ® trademark license. As for the remaining three
counts, this Court has already concluded that these counts
are more in the nature of remedies, not causes of action, and
each are dependent on a finding of liability under the unjust
enrichment claim. ECF No. 4 at 7.
motion for summary judgment will be granted only if there
exists no genuine dispute as to any material fact and the
moving party is entitled to judgment as a matter of law.
See Fed.R.Civ.P. 56(a); Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986); Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). Summary
judgment is inappropriate if any material factual issue
“may reasonably be resolved in favor of either
party.” Liberty Lobby, 477 U.S. at 250;
JKC Holding Co. LLC v. Wash. Sports Ventures, Inc.,
264 F.3d 459, 465 (4th Cir. 2001). The moving party bears the
burden of showing that there is no genuine dispute as to any
material fact. However, no genuine dispute of material fact
exists if the nonmoving party fails to make a sufficient
showing on an essential element of his or her case as to
which he or she would have the burden of proof.
Celotex, 477 U.S. at 322-23. Therefore, on those
issues on which the nonmoving party has the burden of proof,
it is his or her responsibility to confront the summary
judgment motion with an “affidavit or other evidentiary
showing” demonstrating that there is a genuine issue
for trial. See Ross v. Early, 899 F.Supp.2d 415, 420
(D. Md. 2012). “A mere scintilla of proof ... will not
suffice to prevent summary judgment.” Peters v.
Jenney, 327 F.3d 307, 314 (4th Cir. 2003). A
“party cannot create a genuine dispute of material fact
through mere speculation or compilation of inferences.”
Shin v. Shalala, 166 F.Supp.2d 373, 375 (D. Md.
2001) (citation omitted). Indeed, this court has an
affirmative obligation to prevent factually unsupported
claims and defenses from going to trial. See Drewitt v.
Pratt, 999 F.2d 774, 778-79 (4th Cir. 1993) (quoting
Felty v. Graves- Humphreys Co., 818 F.2d 1126, 1128
(4th Cir. 1987)).
arguing that the January 18, 2013, Settlement Agreement also
released the claim against it, Chemence Medical relies on a
decision of the Maryland Court of Special Appeals,
Chicago Title Insurance Company v. Lumbermen's Mutual
Casualty Company, 707 A.2d 913 (Md. Ct. Spec. App.
1998). In Chicago Title, a title insurance company
sued one of its agents and the principal of that agent
alleging that the agent had misappropriated funds from its
escrow account. The insurance company also sued the entity
that had provided the agent's surety bond. Previously,
the agent and its principal had entered into an agreement
with that surety to indemnify it for any losses on the bond.
While the litigation was pending, the plaintiff title