United States District Court, D. Maryland
XINIS, UNITED STATES DISTRICT JUDGE
are Plaintiff's and Defendant's cross-motions for
summary judgment (ECF Nos. 66, 67). The issues are fully
briefed and hearing was held on Friday, August 4, 2017. For
the reasons stated below, both motions are granted in part
and denied in part.
Farhad Dastranj (“Dastranj”) is an Iranian
citizen and resident seeking to immigrate to the United
States. He attempted to obtain an Employment Based Fifth
Preference Immigrant Investor Visa (“EB-5 Visa”)
under the Immigrant Investor Program (the “EB-5
Program”). ECF No. 67-2 at 1. To be eligible for an
EB-5 Visa, the applicant must invest, or be actively in the
process of investing, at least $500, 000 in an enterprise
that will benefit the United States economy by creating full
time employment for not fewer than ten (10) qualified
individuals. USA Investco (“Investco”), Northern
Riverfront Marina and Hotel LLP (“Northern
Riverfront”), and Wilmington Riverfront Development LLC
(“Wilmington Riverfront”) are North
Carolina-based companies that facilitate prospective EB-5
investors' visa requirements by coordinating investment
in a qualified project located in Wilmington, North Carolina
(the “EB-5 Project”). Id.
Mehdi Dehghan (“Dehghan”) was employed by
Investco as its Senior Vice President for Investor Relations
and President of Middle East and Central Asian affairs. His
responsibilities included acquiring investor capital for the
Northern Riverfront and Wilmington Riverfront projects.
Id. at 1-2. For each EB-5 investor whom Dehghan
brought to invest in the EB-5 Project, Investco paid Dehghan
a $35, 000 commission. Id. at 2.
first met Dastranj in 2010 in Iran to discuss Dastranj's
participation in the EB-5 Program generally and his
investment in the Wilmington EB-5 Project more specifically.
Over several meetings in Iran, Dehghan presented Dastranj
with written documents prepared by Investco about the
Wilmington EB-5 Project and discussed the terms of
Dastranj's participation. Id. at 2. Dehghan
specifically informed Dastranj the EB-5 visa Project required
a minimum of $500, 000 in a qualified investment such as the
Wilmington project, plus a $75, 000 administrative and
attorneys' fee. Dehghan provided Dastranj with a
Subscription Agreement to purchase an interest in the
Wilmington EB-5 Project, which Dastranj signed on August 8,
2010. Id. at 3.
August 2010, federal law prohibited United States persons
from engaging in financial transactions involving Iran
without first obtaining a license issued by the Department of
Treasury's Office of Foreign Asset Control
(“OFAC”). Thus, a necessary prerequisite to
transferring Dastranj's funds into the United States for
the EB-5 Project was obtaining the proper OFAC license.
See generally Iranian Transactions and Sanctions
Regulations (“ITSR”), 31 C.F.R. §§
560.101-560.901. Dehghan therefore connected Dastranj to
Investco's attorney Ali Herischi to facilitate obtaining
the OFAC license.
Dastranj did not have $575, 000 at the time the gentlemen
discussed the EB-5 program, Dastranj and Dehghan orally
agreed that Dastranj would transfer funds incrementally to
Dehghan who would hold the funds in his Iranian bank account
until the funds totalled the dollar equivalent of $ 575, 000.
ECF No. 67-2 at 4. Dastranj and Dehghan further agreed that,
once the payments reached the equivalent of $ 575, 000 and
the OFAC license was issued, Dehghan would transfer
Dastranj's investment to United States and the EB-5
Project. Dastranj also informed Dehghan that he, Dastranj,
would need to inspect and approve personally the EB-5 Project
in North Carolina prior to authorizing the transfer of funds
to the United States.
in the fall of 2010 and throughout 2011 and 2012, Dastranj
made partial periodic payments that were transferred to
Dehghan's Iranian bank account. See ECF No. 67-2
at 4-5. Aside from an initial $75, 000 payment, Dastranj made
these payments in Iranian rials. See Id. Dehghan
would then provide Dastranj signed, hand-written receipts
documenting the value of the specific payment in both rials
and United States dollars. See id.
17, 2012, Dastranj applied for a B1/B2 nonimmigrant visa to
enter the United States for inspection of the EB-5 investment
Project. Id. at 6. His visa application was denied
in October 2012. On June 30, 2013, Ali Herischi informed
Dastranj and Dehghan that the United States granted the OFAC
license for Dastranj's investment. Id. at 5.
Dastranj was never able to visit and personally approve the
investment project. Accordingly, on or about May 2013,
Dastranj requested that Dehghan return his investment.
See Pl.'s Mot. Summ. J., ECF No. 67-1 at 5.
Dehghan never claimed that Dastranj's demand for his
money back was inconsistent with the terms of their
agreement. Dehghan simply did not return any the funds. For
several years to follow, Dastranj continued to demand return
of the funds to no avail. Although Dehghan repeatedly assured
Dastranj that he would return the money (once claiming he
would do so after he was “paid” by Investco),
repayment to Dastranj never happened. See ECF No.
67-2 at 8-9. To date, Dehghan has not returned any of
August 17, 2015, Dastranj filed the instant Complaint against
Dehghan asserting six counts: (1) breach of contract; (2)
unjust enrichment; (3) fraud; (4) “Consumer Protection
Violation- N.C. Gen. Stat. § 75-1.1;” (5)
“Fraudulent and Other Prohibited Practices- N.C. Gen.
Stat. § 78A-8”; and (6) “Fraudulent
Interstate Transactions-15 U.S.C. § 77q.” ECF No.
1. Dastranj's claims center on Dehghan's refusal to
return Dastranj's investment monies once Dastranj was
unable to visit the EB-5 project site and thus participate in
the EB-5 program. See generally Id. On February 10
and 11, 2017, Dastranj and Dehghan filed cross-motions for
summary judgment. See ECF Nos. 66 & 67. The
Court begins with Plaintiff's motion.
STANDARD OF REVIEW
court shall grant summary judgment if the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477
U.S. 317, 322 (1986) (citing predecessor to current Rule
56(a)). The burden is on the moving party to demonstrate the
absence of any genuine dispute of material fact. Adickes
v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). If
sufficient evidence exists for a reasonable jury to render a
verdict in favor of the party opposing the motion, then a
genuine dispute of material fact is presented and summary
judgment should be denied. See Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). However, the “mere
existence of a scintilla of evidence in support of the
[opposing party's] position” is insufficient to
defeat a motion for summary judgment. Id. at 252.
The facts themselves, and the inferences to be drawn from the
underlying facts, must be viewed in the light most favorable
to the opposing party, Scott v. Harris, 550 U.S.
372, 378 (2007); Iko v. Shreve, 535 F.3d 225, 230
(4th Cir. 2008), who may not rest upon the mere allegations
or denials of his pleading but instead must, by affidavit or
other evidentiary showing, set out specific facts showing a
genuine dispute for trial, Fed.R.Civ.P. 56(c)(1).
court is called upon to decide cross-motions for summary
judgment, it must review each motion separately as to whether
either party deserves judgment as a matter of law.
Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir.
2003). Thus, as with any motion for summary judgment, the
court must review the facts and reasonable inferences
therefrom in the light most favorable to the party opposing
that motion. Id.
Choice of Law
Court is presiding over a diversity action in Maryland, and
thus applies Maryland choice of law rules. See Wells v.
Liddy, 186 F.3d 505, 521 (4th Cir. 1999) (“A
federal court sitting in diversity must apply the
choice-of-law rules from the forum state.”). For causes
of action sounding in tort, Maryland adheres to the lex
loci delicti rule, applying the substantive law of the
state in which the alleged tort took place. Philip Morris
Inc. v. Angeletti, 358 Md. 689, 744-45 (2000). For
causes of action sounding in contract, Maryland follows the
doctrine of lex loci contractus, applying the
substantive law of the place where the contract was formed.
Allstate Ins. Co. v. Hart, 327 Md. 526, 529 (1992).
Finally, where a case involves causes of action sounding in
tort and contract, Maryland embraces the concept of
“dépeçage.” That is, the court will
apply lexi loci delicti to the tort-based issues and
lex loci contractus to those based in a contract.
Erie Ins. Exch. v. Heffernan, 399 Md. 598, 620
originally argued, in connection with a prior motion to
dismiss, that Iranian law governs this case because
Dastranj's alleged injuries occurred in Iran.
See ECF No. 59 at 4-8. Indeed, the meetings between
Dehghan and Dastranj, the transfer of Dastranj's funds,
and Dastranj's subsequent efforts to recapture his
investment, all occurred in Iran. But this Court cannot apply
foreign law unless “the requirements of Rule 44.1 of
the Federal Rules of Civil Procedure are [first] met.”
Baker v. Booz Allen Hamilton, Inc., 358 F. App'x
476, 481 (4th Cir. 2009). Rule 44.1 states:
A party who intends to raise an issue about a foreign
country's law must give notice by a pleading or other
writing. In determining foreign law, the court may consider
any relevant material or source, including testimony, whether
or not submitted by a party or admissible under the Federal
Rules of Evidence. The court's determination must be
treated as a ruling on a question of law.
as here, a party fails to carry its burden under Rule 44.1,
the forum law applies. Baker, 358 F. App'x at
481(citing Ferrostaal, Inc. v. M/V Sea Phoenix, 447
F.3d 212, 216 (3d Cir. 2006) and The Hoxie, 297 F.
189, 190 (4th Cir. 1924), for its holding in a
“pre-Rule 44.1 case, that forum law applies unless the
party seeking to use foreign law establishes that foreign law
differs from forum law”)).
motion to dismiss stage, Dehghan failed to satisfy his burden
under Rule 44.1 regarding application of foreign law, and has
since abandoned his efforts in this regard. Dehghan now
concedes that Maryland law applies to Dastranj's common
law claims. See ECF No. 66-1 at 10. The Court will
therefore apply Maryland law to Dastranj's common law
claims of breach of contract, unjust enrichment, and fraud.
Counts IV and V of his complaint, Dastranj alleges that
Dehghan violated two North Carolina statutes-§ 75.1.1 of
North Carolina's Unfair and Deceptive Trade Practices Act
(“UDTPA”), N.C. Gen. Stat. Ann. § 75-1.1;
and § 78A-8 the North Carolina Securities Act
(“NCSA”), N.C. Gen. Stat. Ann. § 78A-8.
See ECF No. 1 at 9-12. Section 75-1.1 of UDTPA
declares unlawful “[u]nfair methods of competition in
or affecting commerce, and unfair or deceptive acts or
practices in or affecting commerce.” Section 78A-8 of
the NCSA prohibits persons, “in connection with the
offer, sale or purchase of any security, directly or
indirectly: (1) To employ any device, scheme, or artifice to
defraud; (2) To make any untrue statement of a material fact
or to omit to state a material fact necessary in order to
make the statements made, in the light of the circumstances
under which they are made, not misleading or; (3) To engage
in any act, practice, or course of business which operates or
would operate as a fraud or deceit upon any person.” A
claim under the NCSA is, in many ways, like an action under
the UDTPA. See Associated Packaging, Inc. v. Jackson
Paper Mfg. Co., No. 10 CVS 745, 2012 WL 707038, at *4 (
N.C. Super. Mar. 1, 2012).
support of the North Carolina statutory claims, Dastranj
alleges that Dehghan duped Dastranj to transfer funds based
on false promises of facilitating Dastranj's investment
in the EB-5 Project. Dehghan's deceptive conduct, says
Dastranj, not only violated the UDTPA, but also the NCSA
because it was in furtherance of the sale of a security,
namely, a stake in the EB-5 Project. If Dastranj were to
prevail on his UDTPA claim, he is entitled to treble damages
pursuant to N.C. Gen. Stat. § 75-16. See Marshall v.
Miller, 302 N.C. 539, 547 (1981) (finding that the
“Legislature intended trebling of any damages assessed
to be automatic once a violation is shown.”). The Court
in its discretion may also award attorney's fees to the