United States District Court, D. Maryland
Richard D. Bennett United States District Judge.
Gladys Jean Carter (“Plaintiff” or
“Carter”) has filed a three-count Complaint
against Defendant Morgan Stanley Wealth Management
(“Defendant” or “Morgan Stanley”),
seeking Declaratory Relief (Count I), and alleging, inter
alia, Conversion of Property (Count II), and violation
of the Maryland Consumer Protection Act, Md. Code Ann., Com.
Law, § 13-301, et seq. (“MCPA”) (Count III).
Carter alleges that Morgan Stanley has refused to release to
her funds which were identified by her daughter, Judy L.
Burnette (“Burnette”), as joint property when
deposited with Morgan Stanley. (ECF No. 2.) Morgan Stanley
does not dispute Carter's entitlement to some (or
potentially all) of the funds, but refuses to release the
assets to her without the written consent of the listed
co-owners of certain accounts. This case was originally filed
in the Circuit Court of Maryland for Caroline County, but was
subsequently removed by Morgan Stanley to this Court on the
basis of diversity of citizenship pursuant to 28 U.S.C.
§§ 1332, 1441, and 1446. (ECF No. 1.)
pending before this Court is Defendant Morgan Stanley's
Motion to Dismiss (“Defendant's Motion”)
Counts II and III of Plaintiff's Complaint pursuant to
Rule 12(b)(6) of the Federal Rules of Civil Procedure. (ECF
No. 7.) In Plaintiff's Opposition to Defendant's
Motion, Plaintiff withdrew her Conversion of Property Claim
(Count II). (ECF No. 12 at 1.) Accordingly, Count II is
DISMISSED. The parties' submissions have been reviewed,
and no hearing is necessary. See Local Rule 105.6
(D. Md. 2016). For the reasons that follow, Defendant Morgan
Stanley's Motion to Dismiss (ECF No. 7) is GRANTED, and
both Counts II and III of Plaintiff's Complaint are
DISMISSED. This case shall proceed as a one-count Complaint
seeking a Declaratory Judgment.
reviewing a Motion to Dismiss, the Court accepts as true the
facts alleged in the plaintiff's Complaint. See Aziz
v. Alcolac, Inc., 658 F.3d 388, 390 (4th Cir. 2011).
Gladys Jean Carter is an eighty-five year old resident of
Greensboro, Caroline County, Maryland. (Compl., ECF No. 2 at
¶ 1.) In January 2013, Plaintiff Gladys Jean Carter
(“Plaintiff” or “Carter”) “fell
and broke her hip . . . and was in a nursing home, against
her will, for some period of the last three years.”
(Id. at ¶ 16.) In January 2014, Carter
“gave her daughter Judy L. Burnette a power of attorney
to manage her affairs while [plaintiff] was in the nursing
home.” (Id. at ¶ 18.) Prior to May 6,
2014, Carter held funds in multiple accounts in several
financial institutions, and “all of the property was
either in Mrs. Carter's individual name, or in her
individual name but with a beneficiary in the case of her
death.” (Id. at ¶ 30.) These contingent
beneficiaries did not have any right to these assets while
Carter was still alive. (Id.)
Carter granted her daughter a power of attorney, Burnette
allegedly transferred all of her mother's funds to an
M&T Bank account, and then “transferred a
substantial portion of the consolidated amount to newly
created accounts” at Morgan Stanley. (ECF No. 2 at
¶¶ 25-27.) These accounts were administered through
Defendant's West Palm Beach, Florida branch.
(Id.) Plaintiff now alleges that these funds were
improperly titled as joint accounts, and not “Payable
on Death” accounts; as a result, the individuals whom
she intended to be contingent beneficiaries obtained
immediate property interests in the funds. (Id. at
Carter left the nursing home and learned of the status of the
accounts, she revoked the power of attorney granted to
Burnette and “asked Morgan Stanley to close all her
accounts and return all funds directly to her.” (ECF
No. 2 at ¶¶ 19, 23.) Morgan Stanley has refused,
asserting that “because the accounts were opened in
joint names, a letter of authorization from both account
holders would be required before [Morgan Stanley] could move
all of the funds into [Carter's] Individual
Account.” (ECF No. 8 at 3.)
August 9, 2016, Carter filed this action, seeking a
declaratory judgment regarding her entitlement to all of the
funds and alleging that Morgan Stanley violated the Maryland
Consumer Protection Act by using “unfair, and deceptive
trade practices, intended to deprive Carter of her funds
under the [Act].” (ECF No. 2 at ¶¶ 46-47)
(Count III). Through her MCPA claim, Carter seeks to recover
“damages including attorneys' fees under Title
13-408 [of the MCPA].” (Id. at ¶
12(b)(6) of the Federal Rules of Civil Procedure authorizes
the dismissal of a complaint if it fails to state a claim
upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). The
purpose of Rule 12(b)(6) is “to test the sufficiency of
a complaint and not to resolve contests surrounding the
facts, the merits of a claim, or the applicability of
defenses.” Presley v. City of Charlottesville,
464 F.3d 480, 483 (4th Cir. 2006); see also Goines v.
Valley Cmty. Servs. Bd., 822 F.3d 159, 165-66 (4th Cir.
2016). The sufficiency of a complaint is assessed by
reference to the pleading requirements of Rule 8(a)(2), which
provides that a complaint must contain a “short and
plain statement of the claim showing that the pleader is
entitled to relief.” Fed.R.Civ.P. 8(a)(2). To 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.” Bell Atl., Corp. v.
Twombly, 550 U.S. 544, 570 (2007); Ashcroft v.
Iqbal, 556 U.S. 662, 684 (2009). In reviewing a Rule
12(b)(6) motion, a court “‘must accept as true
all of the factual allegations contained in the
complaint'” and must “‘draw all
reasonable inferences [from those facts] in favor of the
plaintiff.'” E.I. du Pont de Nemours & Co.
v. Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir. 2011)
(citations omitted); see Houck v. Substitute Tr. Servs.,
Inc., 791 F.3d 473, 484 (4th Cir. 2015); Semenova v.
Maryland Transit Admin., 845 F.3d 564, 567 (4th Cir.
9(b) of the Federal Rules of Civil Procedure requires that
“the circumstances constituting fraud be stated with
particularity.” Fed.R.Civ.P. 9(b). The rule “does
not require the elucidation of every detail of the alleged
fraud, but does require more than a bare assertion that such
a cause of action exists.” Mylan Labs., Inc. v.
Akzo, N.V., 770 F.Supp. 1053, 1074 (D. Md.
1991). To satisfy the rule, a plaintiff must “identify
with some precision the date, place and time of active
misrepresentations or the circumstances of active
concealments.” Johnson v. Wheeler, 492
F.Supp.2d 492, 509 (D. Md. 2007). A court “should
hesitate to dismiss a complaint under Rule 9(b) if [it] is
satisfied (1) that the defendant has been made aware of the
particular circumstances for which [it] will have to prepare
a defense at trial, and (2) that [the] plaintiff has
substantial prediscovery evidence of those facts.”
Harrison v. Westinghouse Savannah River Co., 176
F.3d 776, 784 (4th Cir. 1999).
Count III of the Complaint, plaintiff alleges that defendant
violated the Maryland Consumer Protection Act
(“MCPA”), Md. Code Ann., Com. Law, § 13-301.
(ECF No. 2 at ¶¶ 45-50.) The MCPA prohibits
“unfair or deceptive trade practices.”
See Md. Code Ann., Com. Law § 13-301. A
plaintiff bringing a claim under the MCPA must allege:
“(1) an unfair or deceptive practice or
misrepresentation that is (2) relied upon, and (3) causes
them actual injury.” Galante v. Ocwen Loan
Servicing, LLC, No. ELH-13-1939, 2014 WL 3616354, at *25
(D. Md. July 18, 2014) (citations omitted). Where a plaintiff
alleges unfair or deceptive trade practices under the MCPA,
the complaint “is subject to the heightened pleading
standards of Federal Rule of Civil Procedure 9(b), which
requires a plaintiff to plead with particularity the
circumstances constituting fraud.” Spaulding v.
Wells Fargo Bank, N.A., 714 F.3d 769, 781 (4th Cir.
2013) (citing Harrison v. ...