United States District Court, D. Maryland
THEODORE H. BUTZ, et al., Plaintiffs,
PULTE HOME CORPORATION, Defendant.
Xinis United States District Judge
in this declaratory relief action is a motion to dismiss
filed by Defendant, Pulte Home Corporation
(“Pulte” or “Defendant”). ECF No. 20.
The issues are fully briefed, and the Court now rules
pursuant to Local Rule 105.6 because no hearing is necessary.
For the following reasons, Defendant Pulte's motion to
dismiss is denied.
Theodore Butz, Thompson Butz, Jr., Robert Butz, and Jeremy
Butz are brothers (collectively, “Plaintiffs”)
who together owned a 54.45-acre property located at 21901
Ridge Road, Germantown, Montgomery County, Maryland
(“the Property”). ECF No. 2 at 2. Because the
Property was used for agricultural purposes, Plaintiffs
enjoyed favorable tax treatment under Md. Code Ann.,
Tax-Prop. § 8-209. See generally ECF No. 2 at
4. Defendant Pulte, a Michigan corporation, is a national
homebuilder with numerous projects in the state of Maryland.
ECF No. 2 at 2.
August 14, 2013, the parties executed a Letter of Intent for
Pulte to purchase the Property for development of 140
single-family residential homes. ECF No. 2 at 2; ECF No. 2-2.
On November 27, 2013, Pulte and the Plaintiffs executed an
agreement (“the Agreement”), ECF No. 2-3, for the
purchase of the Property. ECF No. 2 at 3. The recordation of
deed to the Property triggered three tax assessments: (1) an
agricultural land transfer tax (“the Agricultural Land
Transfer Tax”) pursuant to Md. Code Ann., Tax-Prop.
§ 13-301, et seq.; (2) a Prince George's
County transfer tax, pursuant to Prince George's County
Code § 10-188; (3) and a general state transfer tax
applicable to all real estate transactions, Md. Code Ann.,
Tax-Prop. §§ 13-202 to 13-203. ECF No. 2 at 5.
Because Pulte purchased the Property for the purpose of
building homes, ECF No. 2 at 2, the Property's favorable
tax treatment under Md. Code Ann., Tax-Prop. § 8-209
ended. ECF No. 2 at 4; ECF No. 2-5. This transformation from
agricultural to non-agricultural use resulted in an
Agricultural Land Transfer Tax in the amount of $959, 857.
ECF No. 2 at 4; ECF No. 2-5.
Agricultural Land Transfer Tax assessment precipitated a
dispute between the parties as to which party should bear the
cost under the Agreement. ECF No. 2 at 6. Plaintiffs contend
that Pulte is in material breach of Section 15.4 of the
Agreement by not sharing equally in the payment of the
Agricultural Land Transfer Tax. Section 15.4 of the Agreement
Shared Settlement Costs. Seller [Plaintiffs] and
Purchaser [Pulte] shall share equally the Settlement Agent
Fees and all state, county and other transfer taxes,
recordation fees and other fees in connection with the
Settlement [to complete the purchase and sale].
ECF No. 2-3 at 12.
April 18, 2016, Plaintiffs filed a complaint in the Circuit
Court for Montgomery County Maryland seeking a declaratory
judgment that Pulte pay its $479, 928 share of the
Agricultural Land Transfer Tax. ECF No. 2 at 6. Following
timely removal of the case to this Court, Pulte filed its
motion to dismiss. ECF No. 20.
STANDARD OF REVIEW
ruling on a motion under Rule 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). In addition to the complaint,
the court “may consider documents attached to the
complaint . . . so long as they are integral to the complaint
and authentic.” Sec'y of State for Def., v.
Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir.
2007) (citing Fed.R.Civ.P. 10(c)). The Court also “may
properly take judicial notice of matters of public
record.” Philips v. Pitt County Mem's
Hosp., 572 F.3d 176, 180 (4th Cir. 2009). Here, the
August 14, 2013 letter of intent to purchase the Property,
the executed Agreement, subsequent amendments to the
Agreement, the Agricultural Land Transfer Tax statement, and
deed of conveyance are integral exhibits attached to the
Complaint, whose authenticity is not disputed. See
ECF Nos. 2-2, 2-3, 2-4, 2-5, 2-6, 2-7.
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 Atlantic Corp. v.
Twombly, 550 U.S. 544, 555 (2007) (internal citations
omitted). “To satisfy this standard, a plaintiff need
not ‘forecast' evidence sufficient to prove the
elements of the claim. However, the complaint must allege
sufficient facts to establish those elements.”
Walters, 684 F.3d at 439 (citation omitted).
“Thus, while a plaintiff does not need to demonstrate
in a complaint that the right to relief is ‘probable,
' the complaint must advance the plaintiff's claim
‘across the line from conceivable to
plausible.'” Id. (quoting
Twombly, 550 U.S. at 570).
contends the current action should be dismissed on three
grounds: (1) Plaintiffs impermissibly seek declaratory
relief; (2) Plaintiffs failed to allege compliance with
statutory and contractual notice obligations regarding the
Agricultural Land Transfer Tax; and (3) Plaintiffs are
obligated to pay the Agricultural Land Transfer Tax pursuant
to the terms of the parties' Agreement. ECF No. 20-1 at
2. The Court will address each argument in turn.
Plaintiffs' sole cause of action is for declaratory
relief pursuant to §§ 3-401 through 3-415 of the
Courts & Judicial Proceedings Article of the Maryland
Code. ECF No. 2 at 6. Pulte argues the Plaintiffs
impermissibly seek declaratory judgment instead of ...