United States District Court, D. Maryland
L. RUSSELL, III UNITED STATES DISTRICT JUDGE
MATTER is before the Court on: (1) Plaintiffs Christopher
Miller and Kathleen Miller's (the “Millers”)
Motion for Partial Summary Judgment (ECF No. 70); and (2)
Defendants Martin Barry Strudwick (“Strudwick”),
Stacey Murray, Stephanie Green, Strudwick Management, LLC,
Strudwick & Associates, Inc. (“S&A”),
Monterey Del Pacifico Partners, LLLP (“Monterey Del
Pacifico”), Grupo Del Pacifico Development, LLC, Del
Pacifico Sales, LLC, Grupo Del Pacifico Development Venture
Sociedad Anonima (“Grupo Venture”), and Monterey
De Playa Sociedad Anonima's (“Monterey De
Playa”) Motion for Partial Summary Judgment (ECF No.
72). This action arises from the Millers' purchase of
real estate in Costa Rica for just over a quarter of a
million dollars and subsequent inability to resell the
property in accordance with the terms of the underlying
purchase and sale agreement. The parties' Motions are
ripe for disposition, and no hearing is necessary.
See Local Rule 105.6 (D.Md. 2016). For the reasons
outlined below, the Court will grant in part and deny in part
2008, Defendants piqued the Millers' interest in both
S&A's investment advisory services and an opportunity
to invest in real estate in Del Pacifico at Esterillos (the
“Del Pacifico Project”), located in Puntarenas,
Costa Rica. (Compl. & Demand Jury Trial
[“Compl.”] ¶¶ 16-27, ECF No. 1). The
Del Pacifico Project was described to the Millers as a
“hard asset investment with a solid floor, ” with
emphasis that investors could expect a “guaranteed 40%
return” on their investment. (Id. ¶¶
18-21). After visiting the Del Pacifico Project in April
2008, the Millers formalized their relationship with
Defendants. (Strudwick Aff. ¶¶ 13-18, ECF No.
early March 2009, the Millers entered into an Investment
Advisory Agreement (“IA Agreement”) with S&A.
(Compl. ¶ 27; Inv. Advisory Agreement
[“IAA”], ECF No. 70-3). The Agreement establishes
a fiduciary relationship between the Millers and S&A,
with Strudwick acting as the latter's representative.
(Compl. ¶ 27).
months later, on May 13, 2009, the Millers entered into a
Purchase and Sale Agreement (“P&S Agreement”)
to purchase Lot 11 of the Del Pacifico Project for $265,
000.00. (Id. ¶ 31; Purchase & Sale
Agreement [“PSA”], ECF 70-9). The P&S
Agreement indicates that the Millers are the
“Buyer” and Monterey De Playa and
“affiliated companies, ” “represented by
[Strudwick], ” are the “Seller.” (PSA at
1). Strudwick signed the P&S Agreement on Monterey De
Playa's behalf, in his capacity as President.
(Id. at 8). Under the terms of the P&S
Agreement, the Millers purchased Lot 11 by buying 100% of the
shares in “White Cloud View W.C. Once S.A.”
(“White Cloud”), a registered Costa Rican
business that was the “legal and sole owner of Lot 11,
” which, in turn, was owned by Monterrey De Playa.
(Compl. ¶¶ 31-32; PSA at 1). The Repurchase
Provision, located at paragraph 5 of the P&S Agreement,
provides the Millers with two options in the event that they
chose not to construct a residence on the lot. (Compl. ¶
36; PSA at 2). The Millers selected the second option,
“Option B.” (Compl. ¶ 37). It states that,
should the Millers exercise Option B within sixty months of
the closing date-that is, by May 12, 2014-Grupo Venture, the
named third-party “Repurchaser, ” would be
obligated to repurchase from them 100% of the shares of White
Cloud for $371, 000.00. (Id. ¶¶ 35-37; PSA
at 2). The repurchase price under Option B amounts to a
“40% appreciation” of the price the Millers
initially paid for the White Cloud shares. (Compl. ¶ 38;
see PSA 1-2).
the next five years, correspondence between the parties
tapered off. Approximately four and a half years later, in
December 2013, Strudwick informed the Millers that Grupo
Venture was on the “brink of failure” and would
not be able to fulfill its repurchase obligation under the
P&S Agreement. (Compl. ¶¶ 44, 50-51). On May
12, 2014, the Millers contacted Strudwick, requesting that
Grupo Venture honor the repurchase obligation. (Id.
¶ 53). Strudwick informed the Millers that he was
seeking new investors to fund the Del Pacifico Project, but
that “no return was ever guaranteed.”
18, 2014, the Millers sued Defendants. (ECF No. 1). They
filed an eight-count Complaint alleging: breach of the
P&S Agreement (Count I); breach of the IA Agreement
(Count II); breach of fiduciary duty (Count III);
misrepresentation (Count IV); conversion (Count V); violation
of N.H. Rev. Stat. Ann. §§ 358-A:1 et seq.
(2018) (Count VI), and conspiracy to violate the same (Count
VII); and unjust enrichment (Count VIII). (Compl.
¶¶ 56-96). The Millers seek double or treble
damages and their attorney's fees and costs.
(Id. ¶¶ A-C).
November 15, 2017, the Millers filed a Motion for Partial
Summary Judgment as to Counts I, III, VI, and VII. (ECF No.
70). On December 4, 2017, Defendants filed an Opposition (ECF
No. 72-1), along with a Motion for Partial Summary Judgment
(ECF No. 72) seeking judgment: (1) in their favor as to
Counts II-VII; and (2) in favor of all Defendants other than
Grupo Venture with respect to Counts I and VIII. On December
18, 2017, the Millers filed an Opposition to Defendants'
Motion. (ECF No. 74). To date, the Court has no record that
the parties have filed Replies.
Standard of Review
reviewing a motion for summary judgment, the Court views the
facts in a light most favorable to the nonmovant, drawing all
justifiable inferences in that party's favor. Ricci
v. DeStefano, 557 U.S. 557, 586 (2009); Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 255 (1986) (citing
Adickes v. S.H. Kress & Co., 398 U.S. 144,
158-59 (1970)). Summary judgment is proper when the movant
demonstrates, through “particular parts of materials in
the record, including depositions, documents, electronically
stored information, affidavits or declarations, stipulations
. . . admissions, interrogatory answers, or other materials,
” 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), (c)(1)(A).
Significantly, a party must be able to present the materials
it cites in “a form that would be admissible in
evidence, ” Fed.R.Civ.P. 56(c)(2), and supporting
affidavits and declarations “must be made on personal
knowledge” and “set out facts that would be
admissible in evidence, ” Fed.R.Civ.P. 56(c)(4).
motion for summary judgment is properly made and supported,
the burden shifts to the nonmovant to identify evidence
showing there is a genuine dispute of material fact. See
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 586- 87 (1986). The nonmovant cannot create a
genuine dispute of material fact “through mere
speculation or the building of one inference upon
another.” Othentec Ltd. v. Phelan, 526 F.3d
135, 141 (4th Cir. 2008) (quoting Beale v. Hardy,
769 F.2d 213, 214 (4th Cir. 1985)).
“material fact” is one that might affect the
outcome of a party's case. Anderson, 477 U.S. at
248; see also JKC Holding Co. v. Wash. Sports Ventures,
Inc., 264 F.3d 459, 465 (4th Cir. 2001) (citing
Hooven-Lewis v. Caldera, 249 F.3d 259, 265 (4th Cir.
2001)). Whether a fact is considered to be
“material” is determined by the substantive law,
and “[o]nly disputes over facts that might affect the
outcome of the suit under the governing law will properly
preclude the entry of summary judgment.”
Anderson, 477 U.S. at 248; accord
Hooven-Lewis, 249 F.3d at 265. A “genuine”
dispute concerning a “material” fact arises when
the evidence is sufficient to allow a reasonable jury to
return a verdict in the nonmoving party's favor.
Anderson, 477 U.S. at 248. If the nonmovant has
failed to make a sufficient showing on an essential element
of her case where she has the burden of proof, “there
can be ‘no genuine [dispute] as to any material
fact,' since a complete failure of proof concerning an
essential element of the nonmoving party's case
necessarily renders all other facts immaterial.”
Celotex Corp. v. Catrett, 477 U.S. 317, 322-23
the parties have filed cross-motions for summary judgment,
the court must “review each motion separately on its
own merits to ‘determine whether either of the parties
deserves judgment as a matter of law.'”
Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir.
2003) (quoting Philip Morris Inc. v. Harshbarger,
122 F.3d 58, 62 n.4 (1st Cir. 1997)). Moreover, “[w]hen
considering each individual motion, the court must take care
to ‘resolve all factual disputes and any competing,
rational inferences in the light most favorable' to the
party opposing that motion.” Id. (quoting
Wightman v. Springfield Terminal Ry. Co., 100 F.3d
228, 230 (1st Cir. 1996)). This Court, however, must also
abide by its affirmative obligation to prevent factually
unsupported claims and defenses from going to trial.
Drewitt v. Pratt, 999 F.2d 774, 778-79 (4th Cir.
1993). If the evidence presented by the nonmovant is merely
colorable, or is not significantly probative, summary
judgment must be granted. Anderson, 477 U.S. at
The Millers' Motion
Count I - Breach of the Purchase Agreement
prevail on a breach-of-contract claim under Maryland law,
plaintiff must show: (1) “a contractual
obligation”; and (2) “a material breach of that
obligation.” Chubb & Son v. C & C Complete
Servs., LLC, 919 F.Supp.2d 666, 678 (D.Md. 2013)
(quoting Cowan Sys. LLC v. Ocean Dreams Transp.,
Inc., WDQ-11-366, 2012 WL 4514582, at *3 (D.Md. Sept.
27, 2012)). A breach is material if “it renders any
subsequent performance ‘different in substance from
that which was contracted for, '” or “alters
the purpose of the contract in a vital way.” Wright
Sols., Inc. v. Wright, CBD-12-178, 2013 WL 1702548, at
*3 (D.Md. Apr. 18, 2013) (quoting Jay/Dee Mole Joint
Venture v. Mayor of Balt., 725 F.Supp.2d 513, 516 (D.Md.
2010)). The issue of “[w]hether a breach of contract is
material is normally a question of fact, unless the issue is
so clear that it may be decided as a matter of law.”
White Marlin Open, Inc. v. Heasley, 262 F.Supp.3d
228, 253 (D.Md. 2017) (quoting Whiting-Turner Contracting
Co. v. Capstone Dev. Corp., WDQ-12-3730, 2013 WL
5423953, at *8 (D.Md. Sept. 26, 2013)).
Grupo Venture's Liability
Millers contend that Grupo Venture's breach of the
Purchase and Sale Agreement establishes liability. The Court
their briefs, the Millers assert that Grupo Venture was
contractually obligated to purchase 100% of the White Cloud
shares from them for $371, 000 in May 2014 under the P&S
Agreement. (Mem. Support Pl.'s Mot. Partial Summ. J.
[“Pl.'s Mem.”] at 17, ECF No. 70-1). They
further assert that Grupo Venture breached the obligation by
refusing, and continuing to refuse, to pay any portion of the
funds owed. (Id.) Defendants concede these
assertions. (Answer ¶¶ 57-59, ECF No. 36;
Defs.' Mem. Opp'n Pl.'s Mot. Partial Summ. J.
& Support Defs.' Mot. Partial Summ. J.
[“Defs.' Mem.”] at 20, ECF 72-1).
Accordingly, the Court will grant the Millers' Motion to
the extent it seeks summary judgment against Grupo Venture as
to Count I.
Monterey De Playa and Monterey Del Pacifico's
Millers seek to impose liability for breach of the P&S
Agreement against Monterey De Playa and Monterey Del
Pacifico. The Millers acknowledge that,
“generally, a party who is not a signatory to a
contract cannot be held liable for a breach of the
contract.” (Pls.' Mem. at 18). They nevertheless
contend that “Strudwick's control and ownership of
[Monterey De Playa] (a party to the P&S Agreement) and
Monterey Del Pacifico . . . compel the conclusion that those
entities should aslo [sic] be held liable for breach of the
repurchase obligation, as should Strudwick.”
(Id. at 19).
courts do not “pierce the corporate veil between a
parent and a subsidiary corporation if the subsidiary has
some independent reason for its existence, other than being
under the complete domination and control of another legal
entity simply for the purpose of doing its act and
bidding.” Kriesler v. Goldberg, 478 F.3d 209,
213 (4th Cir. 2007) (quoting Mylan Labs., Inc. v. Akzo,
N.V., 2 F.3d 56, 62 (4th Cir. 1993)).
Monterey Del Pacifico only owns 80% of Monterey De Playa.
(Pls.' Mot. Partial Summ. J. [“Pls.'
Mot.”] Ex. 24 at 1-2, ECF No. 70-26). The remaining 20%
is owned by Monterey Park-an entity which, based on
Defendants' 103.3 Corporate Disclosure, Strudwick likely
owns in full. (Id. at 2; Local Rule 103.3 & FRCP
7.1 Disclosure at 1, ECF No. 37). The parties have not
presented evidence that demonstrates Monterey De Playa is
under the complete dominion of Monterey Del Pacifico.
Monterey De Playa was formed to purchase and hold a 350-acre
farm in Costa Rica, and to periodically subdivide the farm
and sell parcels and lots. (Monterey De Playa Answers
Interrogs. at 3, ECF No. 70-10). And in keeping with this
purpose, Monterey De Playa has completed two major sales
since its inception-to Villas del Pacifico Esterillos Sun
S.A. and Del Pacifico Shopping Center S.A. (Id. at
5-7). Accordingly, the Court will not grant summary judgment
in Plaintiff's favor as to Monterey Del Pacifico.
Strudwick's Liability Under Alter Ego Doctrine
the Millers advance theories of fraud and paramount equity
under Maryland's alter ego doctrine as grounds for
piercing the corporate veil and imposing personal liability
against Strudwick. The Court addresses each theory in turn.
At bottom, the Court finds that a genuine dispute of material
fact exists as to Strudwick's personal liability.
Maryland law, the corporate entity will not be disregarded
except “when necessary to prevent fraud or to enforce a
paramount equity.” Dixon v. Process Corp., 382
A.2d 893, 899 (Md.Ct.Spec.App. 1978).
Maryland, fraud is established when:
(1) the defendant made a false representation to the
plaintiff, (2) the falsity of the representation was either
known to the defendant or the representation was made with
reckless indifference to its truth, (3) the misrepresentation
was made for the purpose of defrauding the plaintiff, (4) the
plaintiff relied on the misrepresentation and had the right
to rely on ...