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Rudasill Family Charitable Trust v. Adcor Industries Inc.

United States District Court, D. Maryland

October 3, 2018

Rudasill Family Charitable Trust et al., Plaintiffs,
Adcor Industries Inc. et al., Defendants.


          Honorable Gina L. Simms United States Magistrate Judge

         Pending before this Court, by the parties' consent, are Motions for Summary Judgment and Responses in Opposition thereto. (ECF Nos. 31, 32, 33, 34, 35). Upon review of the pleadings and the record, the Court finds that no hearing is necessary. See L.R. 105.6. For the reasons set forth below, Plaintiff's Motion for Summary Judgment is DENIED (ECF No. 31) and Defendant's Motion for Summary Judgment is GRANTED IN PART AND DENIED IN PART (ECF No. 32).

         I. Factual and Procedural Background

         Plaintiffs are trust companies represented by a court appointed receiver, Plaintiff Ricardo Zayas. (ECF No. 19 at 2). Plaintiffs the Rudasill Family Charitable Remainder Annuity Trust (“Rudasill”) and the Bellavia Family Trust (“Bellavia”) are “non-Maryland entity plaintiffs” and Summit Trust Company (“STC”) is headquartered in Nevada, but maintains a principal place of business in Pennsylvania. Id. Defendant Adcor Industries, Inc. (“Adcor”) is a Maryland corporation that manufactures, assembles, and supplies precision machine components, aerospace, telecommunications, and weapons systems applications. Id.

         According to Plaintiffs, STC negotiated and transacted commercial loans to businesses on its own behalf as a duly authorized trustee on behalf of other client trusts in its ordinary course of business. Id. at 3.

         The following facts are undisputed. On or about February 29, 2012, Rudasill transferred $145, 292.40 to Adcor. (ECF No. 31 at 3; ECF No. 32-1 at 2). Then, on or about March 7, 2012, STC transferred $200, 000 to Adcor. Id. Finally, on or about March 9, 2012, Bellavia transferred $172, 800 to Adcor. Id. Plaintiffs then filed three UCC-1 statements with the Maryland Department of Assessments and Taxation on May 10, 2012. (ECF No. 19, ¶ 20; ECF No. 32-1 at 2). Defendant subsequently filed termination statements on or about June 18, 2013 with respect to the May 10, 2012 UCC-1 statements. (ECF No. 19, ¶ 28; ECF No. 32-1 at 2). The filing of the UCC-1 statements allegedly perfected Plaintiffs' security interests in Adcor's intellectual property, including its patent portfolio, based on the alleged loans from Plaintiffs to Adcor. See Id. Both parties agree that no written agreement memorializing the loans exists. (ECF No. 33 at 3-4; ECF No. 32-1 at 9).

         Plaintiffs filed their Complaint on September 19, 2016, i.e., four months after they learned that Defendant had attempted to terminate Plaintiffs' security interests. (ECF No. 1). Defendant filed a Motion to Dismiss on November 15, 2016 (ECF No. 9), which was fully briefed, and was later granted in part and denied in part by the Honorable George Jarrod Hazel in a September 26, 2017 memorandum opinion (ECF No. 15). Subsequently, Plaintiffs filed an Amended Complaint on October 8, 2017, alleging, in relevant part: (1) breach of contract and (2) unjust enrichment. (ECF No. 19). Plaintiffs also allege that they “did not know and could not reasonably have known” that Adcor attempted to terminate their security interests in 2013 until May 2016 “when the Receiver initiated investigation and collection efforts with respect to the Loans.” Id. at 7.

         In addition, Plaintiffs maintain that Defendant breached loan agreements because they and the Defendant “had a meeting of the minds regarding all loans” by February 2012 and “entered into a binding agreement . . . to provide the Loans to Adcor and Adcor agreed to repay the Loans, with interest.” Id. ¶ 35. Plaintiffs allege that Adcor's failure and continued refusal to repay the loans despite agreeing to do so is a breach of contract. Id. ¶¶ 36-38. Plaintiffs aver that Defendant has been unjustly enriched at the expense of Plaintiffs by retaining the money. Id. ¶ 42.

         On June 2, 2018, Plaintiffs filed a Motion for Summary Judgment (ECF No. 31), which was fully briefed, and on June 4, 2018, Defendant filed its Motion for Summary Judgment (ECF No. 32), which was also fully briefed. Accordingly, the Motions pending before this Court are ripe for disposition. No hearing is deemed necessary pursuant to L.R. 105.6.

         II. Standard of Review

          Motions for summary judgment shall be granted only if there are no genuine issues as to any material fact, such that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The moving party bears the burden of showing that there is no genuine issue as to any material fact. Fed.R.Civ.P. 56(a); Pulliam Inv. Co. v. Cameo Properties, 810 F.2d 1282, 1286 (4th Cir. 1987) (internal citation omitted). The burden can be satisfied through the submission of discovery materials. Barwick v. Celotex Corp., 736 F.2d 946, 958 (4th Cir. 1984). To defeat motions for summary judgment, on the other hand, the nonmoving party cannot simply cast “metaphysical doubt” on the material facts, but rather must provide specific facts demonstrating a genuine issue for trial. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citing Fed.R.Civ.P. 56(e)).

         The Court must construe the facts and documentary materials submitted by the parties, including the credibility and weight of particular evidence, in the light most favorable to the party opposing the motions. Masson v. N.Y. Magazine, Inc., 501 U.S. 495, 520 (1991) (citing Anderson, 477 U.S. at 255)). A mere scintilla of evidence is insufficient to create an issue of material fact. See Barwick, 736 F.2d at 958-59 (citing Seago, 42 F.R.D. at 632). Summary judgment is inappropriate if any material factual issue “may reasonably be resolved in favor of either party.” Anderson, 477 U.S. at 250.

         III. Analysis

         In Maryland, the statute of limitations for a civil action is three years. Md. Code, Courts & Judicial Proceedings, § 5-101 (2014) (“A civil action at law shall be filed within three years from the date it accrues unless another provision of the Code provides a different period of time within which an action shall be commenced.”). The statute of limitations “does not extinguish [a] debt; it bars the remedy only.” Jenkins v. Karlton, 329 Md. 510, 531 (1993). Maryland has long recognized that acknowledgement of a debt removes a statutory bar to recovery. See Jenkins, 329 Md. at 531. Such an acknowledgement need not “expressly admit the debt, it need only be consistent with the existence of the debt, ” and it does not have to “be an express promise to pay a debt.” Id. Acknowledgement of a ...

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