United States District Court, D. Maryland
DONALD J. CALLENDER and CONVERGENCE MANAGEMENT ASSOCIATES, LLC, Plaintiffs,
WADE CALLENDER and ERICA CALLENDER, Defendants.
THEODORE D. CHUAN United States District Judge
Donald J. Callender and Convergence Management Associates,
LLC ("CMA" or "Convergence") have filed
this state law tort action against Defendants Wade Callender
and Erica Callender arising from an intra-family dispute
relating to a previously dismissed lawsuit in this Court.
Presently pending before the CoUrt is Wade Calender's
Motion to Dismiss or, in the Alternative, Motion for Summary
Judgment, Erica Calender's Motion to Dismiss, and
Plaintiffs' Motion for Leave of the Court to File a
Surreply. Having reviewed the submitted materials, the Court
finds that no hearing is necessary. See D. Md. Local
R. 105.6. For the reasons set forth below, Wade
Calender's Motion is GRANTED IN PART and DENIED IN PART,
Erica Calender's Motion is GRANTED, and Plaintiffs'
Motion is DENIED.
case is the second action before this Court involving the
Callender family. Donald Callender, divorced from Diane
Callender, is the father of Defendant Wade Callender and the
father-in-law of Erica Callender, Wade Calender's wife.
Donald and Diane Callender have another son, Christian
Callender, who is not a party to this suit. In 2001, Donald
Callender established CMA, a Maryland limited liability
company ("LLC") of which he is the sole member,
which provides financial services to various clients. In
approximately 2007, Donald and Diane Callender retained an
attorney, James P. Seidl, to develop an "asset
protection" strategy for the family's assets.
Callender v. Callender, No. C-14-1314 (Cir. Ct.
Calvert Cty.) 11/3/16 Hearing Tr. ("Divorce Action
Tr.") at 22-26, Wade Callender Mot. Dismiss Ex. 2, ECF
strategy began with the creation of at least three legal
entities: Loch Sloidh Realty Trust, a Maryland grantor
revocable trust; the Falkirk Family Limited Partnership
("Falkirk" or "the Partnership"), a
Virginia family limited partnership; and the Pegasus Living
Trust ("Pegasus",, a Maryland grantor revocable
trust described by Seidl as a "standard living
trust." Divorce Action Tr. at 25-27. Donald and Diane
Callender were named as the trustees of Pegasus.
April 13, 2007, the date that Falkirk was established, Donald
Callender executed an "Assignment of Interest"
("the Assignment"), notarized by Seidl, which
stated in full:
By this Instrument, the Assignor's interest in the
Convergence Management Associates, LLC, a Maryland Limited
Liability Company, federal tax ID number 01-0604814, whose
principal place of business is currently Prince Frederick,
Maryland, is hereby assigned to the General Partners of the
Falkirk Family Limited Partnership, a Virginia Limited
Partnership, signed on April 13, 2007, under the terms of the
Partnership in effect at the time of the Assignor's
Hereby assigned are all of the company's assets,
including but not limited to its real, personal, tangible,
intangible and mixed property, accounts receivable, bank
accounts, good will and investments, now owned or later
acquired by the Company.
This assignment is for estate planning purposes only, is
subject to, and is therefore null and void to the extent it
violates, the Article of Organization, the Company's
Operating Agreement, or other Business Agreements, is
contrary to law, inadvertently terminates any tax election or
results in unintended adverse tax or legal results under
federal, state or local law.
Assignment at 1, Wade Callender Mot. Dismiss Ex. 4, ECF No.
May 4, 200,, CMA had been named as the general partner of
Falkirk but held only a 1.345% interest in Falkirk. Donald
and Diane Callender, limited partners of Falkirk, held
interests of 0.1345% and 1.48%, respectively. The bulk of the
interest in Falkirk was held by Christian and Wade Callender,
who each held a 48.516% interest as limited partners.
2014, Diane Callender filed for divorce from Donald Callender
in the Circuit Court for Calvert County, Maryland ("the
Divorce Action"). On December 31, 2015, as the Divorce
Action was ongoing, Donald Callender filed suit in this Court
against Erica Callender, alleging that she fraudulently
withdrew money from another LLC owned by Donald Callender
("the 2015 Action"). See Compl.,
Callender v. Callender, No. TDC-15-4015 (D. Md. Dec.
31, 2015) (ECF No. 1). Although the 2015 Action was originally
brought by Donald Callender in his personal capacity, CMA and
the allegedly victimized company, Convergex Caribbean, Ltd.
("Convergex"), were substituted in as plaintiffs
after the Court ruled that Donald Callender lacked prudential
standing to pursue the case.
November 3, 2016, Judge E. Gregory Wells of the Circuit Court
for Calvert County held a hearing in the Divorce Action to
determine how to divide up the marital property between
Donald and Diane Callender. At the hearing, Seidl was called
as a witness to explain the relevant legal entities and
interpret the various documents that governed the
Calenders' property. When asked about the Assignment,
Seidl provided the following testimony:
A [Seidl]: Yeah, I'm not actually sure, but I think we
actually did an assignment, yes, and that would be the normal
course of things.
Q [Counsel]: So therefore Convergence is owned by Falkirk and
[Donald] Callender at one time owned 100 percent of
A: That's right.
Q: Therefore, by transferring it in, he was still the general
partner, but he no longer had an ownership interest in
Convergence outside of whatever interest he had in Falkirk,
A: I'm not sure if! would say it that way.
Q: Then you say it the way you want to.
A: Well, so the husband, I call DJ, DJ still owned
Convergence Associates, and he would still be governed by
that document, for example, we're still a Maryland
A: So he assigned his ownership to Falkirk. Does that answer
Q: Yes. He gave up his ownership interest in Falkirk - in
Convergence and he assigned it to Falkirk, correct?
A: I'm stuck on the word gave up his interest.
Q: Assigned it?
A: I would say he would still own interest - he was still 100