United States District Court, D. Maryland
LIPTON HOLLANDER, UNITED STATES DISTRICT JUDGE
Griaznov, plaintiff, has filed suit against J.K.
Technologies, LLC (“J.K.”), defendant, arising
from a dispute in connection with the importation of
plaintiff's 2012 McLaren MP4-12C (the
“Vehicle”). ECF 1, ¶¶ 6, 7. Under the
terms of the parties' “Compliance and Conversion
Agreement” (“Agreement”), J.K. agreed,
inter alia, to “provide compliance and
conversion services concerning the Vehicle for the purpose of
satisfying the safety standards promulgated b y” the
United States Department of Transportation
(“USDOT”) and the United States Environmental
Protection Agency (“EPA”). See ECF 17-2
alleges that J.K. has wrongful possession of the Vehicle.
See, e.g., ECF 1, ¶ 68. He seeks, inter
alia, a declaration that J.K. cannot retain the Vehicle
under Md. Code (2013 Repl. Vol., 2016 Supp.), § 16-202
of the Commercial Law Article (“C.L.”)
(“Garageman's Lien Statute”), because that
statute is preempted by the National Traffic and Motor
Vehicle Safety Act of 1966, as amended and recodified, 49
U.S.C. §§ 30101 et seq. (“Safety
Act”). ECF 1, ¶¶ 28-46 (Count I). Griaznov
also seeks an injunction requiring J.K. to export the Vehicle
to Russia (id. ¶¶ 27, 47-54) (Count II).
In addition, he asserts a claim for breach of contract
(id. ¶¶ 55-71) (Count III) and Violation
of the Maryland Consumer Protection Act, C.L. §
13-101(c)(1) (id.¶¶ 72-87) (Count IV).
filed an Answer and a Counterclaim. ECF 7. The Counterclaim
contains one count, alleging breach of contract. Id.
at 11-12. J.K. asserts that on August 12, 2016, it completed
the conversion of the Vehicle to comply with USDOT
regulations, and on August 30, 2016, it completed the
conversion to meet EPA emissions standards. Id. at
12, ¶¶ 20-21. It seeks $168, 287.82 for breach of
the Agreement, representing the research, petition, parts,
storage, and conversion of the Vehicle. Id. at
11-12, ¶¶ 13-24.
pending is Griaznov's Motion for Leave to File Amended
Complaint (ECF 17), supported by a memorandum (ECF 17-1)
(collectively, “Motion”) and exhibits. ECF 17-2
through ECF 17-11. In the proposed amended complaint (ECF
17-10, “Amended Complaint”), plaintiff seeks to
add claims for replevin; trespass to chattel; trover and
conversion; and additional injunctive relief. See
ECF 17-11. In addition, he seeks to add as defendants Lois
Joyeusaz and Jonathan Weisheit, the two “members”
of J.K. (collectively, “Members”). J.K. opposes
the Motion (ECF 19, “Opposition”), and submitted
two exhibits with its Opposition. ECF 19-1 and ECF 19-2.
Griaznov replied (ECF 20, “Reply”), and appended
additional exhibits. ECF 20-1 through ECF 20-7.
Motion is fully briefed and no hearing is necessary to
resolve it. See Local Rule 105.6. For the reasons
that follow, I shall grant the Motion in part and deny it in
Factual and Procedural Background
is a citizen of Russia who is domiciled in the State of
Florida. ECF 1, ¶ 1. He is the owner of a “2012
McLaren MP4-12C”, which was valued at $278, 597 in July
2013. Id. ¶ 6. J.K. is a limited liability
company organized under the laws of Maryland, where it
maintains its principal place of business. Id.
¶ 2. J.K. is a “Registered Importer” with
the National Highway Traffic Safety Administration
(“NHTSA”). Id. ¶ 8; see 49
C.F.R. §§ 592.1 et seq.
and J.K. executed the Agreement on July 12, 2013. ECF 1,
¶ 7; see ECF 17-2 at 6. As noted, under the
Agreement, J.K. agreed to “provide compliance and
conversion services concerning the Vehicle for the purpose of
satisfying the safety standards promulgated” by the
USDOT and the EPA. ECF 1, ¶ 7; see also ECF
17-2. The Agreement provided, inter alia, an
estimated base cost of $18, 000 for the conversion, a flat
fee of $2, 500 “for the preparation and filing of a
petition for eligibility”, and a $25 per day storage
fee, which would only be assessed under certain conditions.
ECF 1, ¶ 9; see ECF 17-2, ¶¶ 7, 8,
11, 13-15. The Agreement also required plaintiff to pay a
deposit of $18, 000. ECF 1, ¶ 10; see ECF 17-2
¶ 7. And, either party “shall have the right to
terminate this Agreement for any reason upon thirty (30) days
of notice to the other party.” ECF 17-2, ¶ 15.
imported the Vehicle to the United States on or around July
16, 2013. ECF 1 ¶ 12. At that time, J.K. informed
Griaznov that a “petition for eligibility had to be
filed with NHTSA” to determine whether the Vehicle was
eligible for import. Id. ¶ 15. On August 8,
2013, J.K. filed a Petition for Import Eligibility
Determination with NHTSA to determine the eligibility for
importation of 2012 McLaren MP4-12Cs. Id. ¶ 15.
Thereafter, J.K. filed three amended petitions, on December
10, 2013, January 6, 2014, and January 30, 2014. Id.
On November 15, 2014, J.K. informed an agent of NHTSA that it
had “obtained all parts and programs for the conversion
of the Vehicle.” Id. ¶ 17. NHTSA approved
the final amended petition on April 3, 2015. Id.
January 16, 2015, after Griaznov “became increasingly
frustrated with the amount of time that had passed since the
submission of the original petition, [J.K.] indicated that
the Contract could be cancelled.” ECF 1, ¶ 18.
According to the Complaint, J.K. “informed Mr. Griaznov
that he would simply need to pay the petition fee and storage
fees [of $25 per day] and that the balance of the deposit
would be returned.” Id.
subsequently submitted an invoice to Griaznov reflecting $20,
898.16 in charges. Id. ¶ 19 (“First
Invoice”). The First Invoice included $250 for the
“Translation of Title Documents”; $3, 343.16 for
the “Customs Bond”; $14, 550 for storage fees;
and $2, 755 for the “Petition of Eligibility.”
Id. J.K. applied the $18, 000 deposit to the
invoice, resulting in its claim of a balance due and owing in
the amount of $2, 898.16. Id. ¶ 20.
March 31, 2015, J.K. informed Griaznov that it would prepare
a quote for parts and programming. ECF 1, ¶ 21. On April
6, 2015, Griaznov requested a parts list. Id. ¶
22. Then, on April 23, 2015, J.K. indicated that it was going
to “send its chief programmer to California to obtain
the parts and programs for the Vehicle . . . .”
Id. J.K. indicated that the trip would cost $5, 500
and requested Griaznov's approval. Id. Griaznov
did not approve the trip. Id. ¶ 23. J.K.
submitted the parts list on May 15, 2015. Id. ¶
thereafter, Mr. Griaznov cancelled the Contract and informed
J.K. . . . that he would like to export the Vehicle to
Russia.” Id. ¶ 25. Griaznov insists that
he never approved the purchase of any parts or the provision
of any labor for the conversion of the Vehicle. Id.
30, 2015, J.K. submitted a second invoice to Griaznov.
Id. ¶ 26; see ECF 17-4 (Invoice No.
1965, “Second Invoice”). The Second Invoice
reflected total charges of $41, 069.87, including $29, 919.87
for parts; $8, 100 for labor; and $3, 050 for storage. ECF 1
¶ 26; see ECF 17-4. Despite
plaintiff's “numerous” requests, J.K would
not export the Vehicle until it received payment of the
outstanding balance. ECF 1, ¶ 27.
Motion, Griaznov claims that new information came to light
following the initiation of the suit. He asserts that
J.K.'s Counterclaim “revealed, for the first time,
that [J.K.] completed the conversion [of the Vehicle] on or
about August 12, 2016.” ECF 17-1 at 3; see ECF
7 at 12, ¶ 20. Plaintiff also notes that the
Counterclaim states that the cost due to J.K. is now $168,
287.82. ECF 17-1 at 3; see ECF 7 at 12, ¶ 24.
support of J.K.'s Opposition, Weisheit submitted an
Affidavit providing additional details as to the status of
the Vehicle during the spring and summer of 2015. ECF 19-1.
He avers that all work “on the conversion of the
Vehicle was completed by J.K. in the April/May time period of
2016.” Id. ¶ 8. According to Weisheit,
after J.K. completed its work, J.K. “was required by
law to have the manufacturer of the Vehicle (McLaren) remedy
any recalls.” Id. ¶ 9. On June 14, 2016,
“the Vehicle was sent to McLaren to have multiple
factory recalls performed and was completely serviced and
checked over by the manufacturer's
representatives.” Id. ¶ 10. Weisheit
claims that J.K. paid McLaren $10, 610.31 for those services.
Id. According to Weisheit, J.K. did not receive the
Vehicle from McLaren until July 15, 2016. Id. ¶
11. And, on August 12, 2016, USDOT released the bond on the
Vehicle. Id. ¶¶ 13-15. The bond with the
EPA and U.S. Customs was released on August 30, 2016.
November 3, 2016, the parties agreed to “maintain the
status quo.” ECF 19-2 (letter confirming
status quo agreement). In particular, J.K. agreed to
“refrain from altering, modifying, damaging,
destroying, and/or selling the Vehicle”, and to retain
the Vehicle “in a secured location while the [case] is
Standard of Review
Civ. P. 15(a)(2) states: “[A] party may amend its
pleading only with the opposing party's written consent
or the court's leave. The court should freely give leave
when justice so requires.” See also Foman v.
Davis, 371 U.S. 178, 182 (1962); Talley v. Ocwen
Loan Servicing, LLC., ___ Fed. App'x ___, No.
16-1478, 2017 WL 218858 at *1 (4th Cir. Jan. 19, 2017) (per
curiam); Goode v. Cent. Virginia Legal Aid Soc'y,
Inc., 807 F.3d 619, 628 (4th Cir. 2015).
Rule 15(a), the district court has “broad discretion
concerning motions to amend pleadings . . . .”
Booth v. Maryland, 337 Fed. App'x 301, 312 (4th
Cir. 2009) (per curiam); see also Foman, 371 U.S. at
182; Laber v. Harvey, 438 F.3d 404, 426-29 (4th Cir.
2006) (en banc). A district court may deny a motion to amend
for reasons “‘such as undue delay, bad faith or
dilatory motive on the part of the movant, repeated failure
to cure deficiencies by amendments previously allowed, undue
prejudice to the opposing party by virtue of allowance of the
amendment or futility of the amendment.'”
Booth, 337 Fed. App'x at 312 (quoting
Foman, 371 U.S. at 182).
alone is an insufficient reason to deny leave to
amend.” Edwards v. City of Goldsboro, 178 F.3d
231, 242 (4th Cir. 1999) (citation omitted); see also
Davis v. Piper Aircraft Corp., 615 F.2d 606, 613 (4th
Cir. 1980) (“Delay alone however, without any
specifically resulting prejudice, or any obvious design by
dilatoriness to harass the opponent, should not suffice as
reason for denial.”); Brightwell v.
Hershberger, DKC-11-3278, 2015 WL 5315757, at *3 (D. Md.
Sept. 10, 2015) (“Delay, however, ‘cannot block
an amendment which does not prejudice the opposing
party.'”) (quoting Frank M. McDermott, Ltd. v.
Moretz, 898 F.2d 418, 421 (4th Cir. 1990)).
“Rather, the delay must be accompanied by prejudice,
bad faith, or futility.” Edwards, 178 F.3d at
242 (citation omitted); see Simmons v. United Mortg.
& Loan Inv., LLC, 634 F.3d 754, 769 (4th Cir. 2011);
Equal Rights Center v. Niles Bolton Assocs., 602
F.3d 597, 603 (4th Cir. 2010); Nourison Rug Corp. v.
Parvizian, 535 F.3d 295, 298 (4th Cir. 2008);
Steinburg v. Chesterfield Cnty. Planning Comm'n,
527 F.3d 377, 390 (4th Cir. 2008).
the most important factor listed by the [Supreme] Court for
denying leave to amend is that the opposing party will be
prejudiced if the movant is permitted to alter a
pleading.” 6 C. Wright & A. Miller, Federal
Practice and Procedure § 1487 at 701 (3d ed.)
(“Wright & Miller”) (citing Zenith Radio
Corp. v. Hazeltine Research, Inc., 401 U.S. 321 (1971);
United States v. Hougham, 364 U.S. 310 (1960)). The
burden of showing prejudice falls on “the party
opposing amendment.” Atl. Bulk Carrier Corp. v.
Milan Exp. Co., 3:10-cv-103, 2010 WL 2929612, at *4
(E.D. Va. July 23, 2010). “[I]f the court is persuaded
that no prejudice will accrue, the amendment should be
allowed.” Wright & Miller, § 1487 at
Newport News Holdings Corp. v. Virtual City Vision,
Inc., 650 F.3d 423, 439 (4th Cir. 2011), the Court said:
“‘Whether an amendment is prejudicial will often
be determined by the nature of the amendment and its timing .
. . . [T]he further the case progressed before judgment was
entered, the more likely it is that the amendment will
prejudice the defendant . . . . '” (quoting
Laber, 438 F.3d at 427) (alteration in
Laber). To be sure, “prejudice can result
where a proposed amendment raises a new legal theory that
would require the gathering and analysis of facts not already
considered by the opposing party, but that basis for a
finding of prejudice essentially applies where the amendment
is offered shortly before or during trial.” Johnson
v. Oroweat Foods Co., 785 F.2d 503, 510 (4th
Cir. 1986). In contrast, “[a]n amendment is not
prejudicial . . . if it merely adds an additional theory of
recovery to the facts already pled and is offered
before any discovery has occurred.” Laber, 438
F.3d at 427 (emphasis added). Therefore, the court must
examine the facts of each case “to determine if the
threat of prejudice is sufficient to justify denying leave to
amend.” Wright & Miller, § 1487 at
a proposed amendment must not be futile. See Foman,
371 U.S. at 182. According to the Fourth Circuit, a proposed
amendment should be denied as futile “when the proposed
amendment is clearly insufficient or frivolous on its
face.” Johnson, 785 F.2d at 510; see
also Wright & Miller § 1487 (“[A]
proposed amendment that clearly is frivolous, advancing a
claim or defense that is legally insufficient on its face,
 or that fails to include allegations to cure
defects in the original pleading,  should be
denied.”). A motion to amend can also be denied on the
basis of futility where the proposed amendment “could
not withstand a motion to dismiss.” Perkins v.
United States, 55 F.3d 910, 917 (4th Cir. 1995); see
also Devil's Advocate, LLC v. Zurich Am. Ins. Co.,
___ Fed. App'x ___, No. 15-1048, 2016 WL 6871905, at *8
(4th Cir. Nov. 22, 2016) (per curiam) (affirming district
court's denial of leave to amend on the basis of
futility, because the amended complaint would not survive a
motion to dismiss under Rule 12(b)(6)); Moretz, 898
F.2d at 420-21 (“There is no error in disallowing an
amendment when the claim sought to be pleaded by amendment
plainly would be subject to a motion to dismiss under
the review for futility “is not equivalent to an
evaluation of the underlying merits of the case. To the
contrary, ‘[u]nless a proposed amendment may clearly be
seen to be futile because of substantive or procedural
considerations, . . . conjecture about the merits of the
litigation should not enter into the decision whether to
allow amendment.'” Next Generation
Grp., LLC v. Sylvan Learning Ctrs., LLC,
CCB-11-0986, 2012 WL 37397, at *3 (D. Md. Jan. 5, 2012)
(quoting Davis, 615 F.2d at 613).
the motion for leave to amend was timely filed within the
time provided by the Court's Scheduling Order.
See ECF 12. Nor is there a basis to find prejudice
due to delay. See Id. However, as noted, leave to
amend may also denied if the proposed amendment would not
survive a motion to dismiss under Rule 12(b)(6).
See, e.g., Perkins, 55 F.3d at
917. Therefore, I will briefly review the standard for
dismissal under Rule 12(b)(6).
defendant may test the legal sufficiency of a complaint by
way of a motion to dismiss under Rule 12(b)(6). Goines v.
Valley Cmty, Servs, Bd., 822 F.3d 159, 165-66 (4th Cir.
2016); McBurney v. Cuccinelli, 616 F.3d 393, 408
(4th Cir. 2010), aff'd sub nom. McBurney v.
Young, ___U.S. ___, 133 S.Ct. 1709 (2013); Edwards
v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999).
A Rule 12(b)(6) motion constitutes an assertion by a
defendant that, even if the facts alleged by a plaintiff are
true, the complaint fails as a matter of law “to state
a claim upon which relief can be granted.” Whether a
complaint states a claim for relief is assessed by reference
to the pleading requirements of Fed.R.Civ.P. 8(a)(2). It
provides that a complaint must contain a “short and
plain statement of the claim showing that the pleader is
entitled to relief.” The purpose of the rule is to
provide the defendants with “fair notice” of the
claims and the “grounds” for entitlement to
relief. Bell Atl., Corp. v. Twombly, 550 U.S. 544,
survive a motion under Fed.R.Civ.P. 12(b)(6), a complaint
must contain facts sufficient to “state a claim to
relief that is plausible on its face.”
Twombly, 550 U.S. at 570; see Ashcroft v.
Iqbal, 556 U.S. 662, 684 (2009) (“Our decision in
Twombly expounded the pleading standard for
‘all civil actions' . . . .” (citation
omitted)); see also Hall v. DirecTV, LLC, ___F.3d
___, No. 15-1857, 2017 WL 361065, at *4 (4th Cir. Jan. 25,
2017). But, a plaintiff need not include “detailed
factual allegations” in order to satisfy Rule 8(a)(2).
Twombly, 550 U.S. at 555. Moreover, federal pleading
rules “do not countenance dismissal of a complaint for
imperfect statement of the legal theory supporting the claim
asserted.” Johnson v. City of Shelby, ___ U.S.
___, 135 S.Ct. 346, 346 (2014) (per curiam).
the rule demands more than bald accusations or mere
speculation. Twombly, 550 U.S. at 555; see
Painter's Mill Grille, LLC v. Brown, 716 F.3d 342,
350 (4th Cir. 2013). If a complaint provides no more than
“labels and conclusions” or “a formulaic
recitation of the elements of a cause of action, ” it
is insufficient. Twombly, 550 U.S. at 555. Rather,
to satisfy the minimal requirements of Rule 8(a)(2), the
complaint must set forth “enough factual matter (taken
as true) to suggest” a cognizable cause of action,
“even if . . . [the] actual proof of those facts is
improbable and . . . recovery is very remote and
unlikely.” Twombly, 550 U.S. at 556 (internal
noted, Griaznov seeks to amend his Complaint to add as
defendants the sole Members of J.K., Lois Joyeusaz and
Jonathan Weisheit, and to assert several new claims.
Addition of Individual Defendants
Amended Complaint seeks to add as defendants the two Members
of J.K.: Joyeusaz and Weisheit. See, e.g., ECF 17-1
at 5. According to Griaznov, the Members are liable for the
torts of J.K. because they personally “committed,
inspired, or participated” in J.K.'s
“tortious conduct.” ECF 20 at 16. J.K. opposes
the amendment, claiming it is brought in bad faith and based
on futility. ECF 19.
well settled that “[a] corporation exists as a legal
entity separate and distinct from its corporate
shareholders.” Cancun Adventure Tours, Inc. v.
Underwater Designer Co., 862 F.2d 1044, 1047 (4th Cir.
1988); see Johnson v. Flowers Indus., Inc., 814 F.2d
978, 980 (4th Cir. 1987). Notably, a corporation is a
“‘creature of legal fiction, '” and
“‘ a corporation must of necessity act through
its agents . . . . '” Southern Management Corp.
v. Taha, 378 Md. 461, 480, 836 A.2d 627, 638 (2003)
(citations omitted). Similarly, under Maryland law, a member
of a limited liability company (“LLC”) is not
“personally liable for the obligations of the limited
liability company, whether arising in contract, tort or
otherwise, solely by reason of being a member of the limited
liability company.” Md. Code (2014 Repl. Vol., 2016
Supp.), § 4A-301 of the Corporations & Associations
Article; see Allen v. Dackman, 413 Md. 132, 158, 991
A.2d 1216, 1228 (2010) (“[A] member of an LLC generally
is not liable for torts committed by, or contractual
obligations acquired by, the LLC.”). And, “a
person cannot be held liable under a contract to which he was
not a party. . . .” Residential Warranty Corp. v.
Bancroft Homes Greenspring Valley, Inc., 126 Md.App.
294, 316, 728 A.2d 783, 794 (1999).
concept of a corporation as a separate legal entity “is
expressed by the colorful metaphor of the corporate veil,
which presumes that acts of the corporation are not acts of
the shareholder.” Johnson, 814 F.2d at 980.
The corporate veil doctrine “is a basic attribute of
the corporate form; it encourages business investment and
fosters stability in commercial transactions.”
Cancun Adventure, 862 F.2d at 1047. The same logic
applies to a LLC.
Bart Arconti & Sons, Inc. v. Ames-Ennis, Inc.,
275 Md. 295, 340 A.2d 225, 234 (1975), the Maryland Court of
Appeals observed that, in the absence of fraud or unless
necessary to enforce a paramount equity, shareholders are
generally not liable for the acts of a corporation. It said,
id. at 310, 340 A.2d at 234:
The most frequently enunciated rule in Maryland is that
although courts will, in a proper case, disregard the
corporate entity and deal with substance rather than form, as
though a corporation did not exist, shareholders generally
are not held individually liable for debts or obligations of
a corporation ...