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Zayas v. Adcor Industries Inc.

United States District Court, D. Maryland, Southern Division

September 26, 2017




         Ricardo J. Zayas, receiver and authorized agent for Summit Trust Company, the Rudasill Family Charitable Remainder Annuity Trust, and the Bellavia Family Trust (collectively, the "Trusts" or "Plaintiffs'") brought a Complaint on behalf of the Trusts against Defendants Adcor Industries, Inc. and Adcor Packaging Group, LLC (collectively, "Defendants"), alleging that Defendants defaulted on a loan made by Plaintiffs in the amount of approximately $518, 000 in February and March 2012. ECF No. 4. Defendants move to dismiss the Complaint or, in the alternative, for summary judgment. ECF No. 9-2. No hearing is necessary to resolve the motion. Loc. R. 105.6 (D. Md. 2016). For the reasons that follow, Defendants' motion is granted, in part, and denied, in part.

         I. BACKGROUND[2]

         Zayas is the court appointed receiver for Summit Trust Company ("STC") pursuant to an order of the United States District Court for the Eastern District of Pennsylvania entered on November 25, 2015. ECF No. 4 ¶ 1; ECF No. 12-7. As receiver for STC, Zayas is also an authorized agent for the Rudasill Family Charitable Remainder Annuity Trust ("Rudasill") and the Bellavia Family Trust ("Bellavia"). Id. ¶ 2. STC is a resident of Pennsylvania, and Rudasill and Bellavia are both non-Maryland entities. Id. ¶¶ 1, 2. Defendant Adcor Industries, Inc. ("Adcor") is a Maryland corporation that manufactures, assembles, and supplies precision machine components, aerospace, telecommunications and weapons systems applications. Id. ¶3. Defendant Adcor Packaging Group, LLC ("Adcor Packaging") is a Maryland corporation and maintains the same principal place of business as Adcor. Id. ¶ 4. Jimmy Stavrakis is principal and owner of both Adcor and Adcor Packaging. Id. ¶ 22.

         In February and March 2012, the Trusts provided a series of loans to Defendants by three separate wire transfers in the total amount of $518, 092.40.[3] Id. ¶ 13; ECF No. 4-3; ECF No. 4-4; ECF No. 4-5. Plaintiffs allege that Defendants induced STC into making the loans on behalf of the Trusts and provided Plaintiffs with funding requests along with Adcor's financial information, balance sheets, and financial statements. ECF No. 4 ¶ 14; ECF No. 4-6. While Defendants had not ratified a loan agreement or letter of intent related to the loans, Plaintiffs allege that the parties came to a mutual agreement on the terms of the loans in December 2011. ECF No. 4 ¶¶ 9, 14; ECF No. 4-2.

         On May 10, 2012, STC unilaterally filed three individual UCC-1 Financing Statements with the Maryland State Department of Assessments and Taxation ("SDAT") for a security interest in Adcor's patent portfolio, ECF No. 4-7, allegedly perfecting Plaintiffs' security interests in the patent portfolio as collateral for the loans. ECF No. 4 ¶¶ 15, 16. On June 18, 2013, Defendants, or their representatives, unilaterally filed UCC-3 Financing Statement Amendments with SDAT terminating the security interests filed by Plaintiffs. ECF No. 4-10.

         Following the wire transfers in February and March 2012, Defendants allegedly failed to execute the loan documents and refused to repay the loans. ECF No. 4 ¶ 18. STC sent demand letters on May 31, 2012, May 31, 2013, January 31, 2014, October 22, 2014, and February 24, 2015. ECF No. 4-8. Plaintiffs allege that the current balance of the loans, including interest, is no less than $859, 783.71. ECF No. 4 ¶ 25. Plaintiffs assert the following claims: Money Judgment, Declaratory Relief (Count I); Unjust Enrichment (Count II); Civil Conspiracy (Count III); Breach of Duties: Care, Good Faith and Fair Dealing, Declaratory Relief (Count IV); Breach of Contract (Count V); and Theft and/or Conversion (Count VI).


         Defendants move to dismiss the Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) or, in the alterative, for summary judgment pursuant to Rule 56. ECF No. 9.

         A. Motion to Dismiss Pursuant to Rule 12(b)(6)

         Pursuant to Rule 12(b)(6), a court may dismiss a complaint for failure to state a claim upon which relief can be granted. When deciding a motion to dismiss, a court "must accept as true all of the factual allegations contained in the complaint, " and "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 and internal quotation marks omitted). Pursuant to Rule 8(a)(2) of the Federal Rules of Civil Procedure, 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 to dismiss invoking Rule 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, 'to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544. 570 (2007)).

         B. Motion for Summary Judgment Pursuant to Rule 56

         Defendant's motion is styled as a motion to dismiss, or in the alternative, for summary judgment. A court considers only the pleadings when deciding a Rule 12(b)(6) motion. Where the parties present matters outside of the pleadings, and the court considers those matters, the court will treat the motion as one for summary judgment. See Gadsby v. Grasmick, 109 F.3d 940, 949 (4th Cir. 1997); Mansfield v. Kerry, No. DKC-15-3693, 2016 WL 7383873, at *2 (D. Md. Dec. 21, 2016). All parties must be given some indication by the Court that it is treating a motion to dismiss as one for summary judgment, "with the consequent right in the opposing party to file counter affidavits or pursue reasonable discovery." Gay v. Wall, 761 F.2d 175. 177 (4th Cir. 1985).

         When the moving party styles its motion as a "Motion to Dismiss or, in the Alternative, for Summary Judgment, " as in the case here, and attaches additional materials to its motion, the non-moving party is, of course, aware that materials outside the pleadings are before the Court, and the Court can treat the motion as one for summary judgment. See Laughlin v. Metropolitan Wash. Airports Auth, 149 F.3d 253, 260-61 (4th Cir. 1998). Further, the Court is not prohibited from granting a motion for summary judgment before the commencement of discovery. See Fed. R. Civ. P. 56(a) (stating that the court "shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact" without distinguishing pre- or post-discovery).

         However, summary judgment should not be granted if the non-moving party has not had the opportunity to discover information that is essential to his opposition to the motion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 n.5 (1987). If the non-moving party feels that the motion is premature, that party can invoke Fed.R.Civ.P. 56(d). See Celotex Corp. v. Catrett, 477 U.S. 317, 326 (1986). Under Rule 56(d), the Court may deny a motion for summary judgment if the non-movant shows through an affidavit that, for specified reasons, he or she cannot properly present facts, currently unavailable to him or her, that are essential to justify an opposition. Fed.R.Civ.P. 56(d). Plaintiffs have not invoked Rule 56(d) in this case by filing an appropriate motion with an attached affidavit.

         A court may grant a motion for summary judgment only if there exists no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). A material fact is one that constitutes an element that is essential to a party's case. Celotex, 477 U.S. at 322-23; see also Anderson, 477 U.S. at 248 ("the substantive law will identify which facts are material").

         A genuine issue as to a material fact exists if the evidence that the parties present to the court is sufficient to indicate the existence of a factual dispute that could be resolved in the non-moving party's favor through trial. See Anderson, 477 U.S. at 248-49. While it is the movant's burden to show the absence of a genuine issue of material fact, Pulliam Inv. Co., Inc. v. Cameo Properties, 810 F.2d 1282, 1286 (4th Cir.1987), it is the non-moving party's burden to establish its existence, see Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585-87 (1986), and "[t]he evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson, 477 U.S. at 255.

         III. ...

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