United States District Court, D. Maryland
Richard D. Bennett United States District Judge.
case arises from Plaintiff 401 North Charles LLC's
(“North Charles” or “Plaintiff”)
allegations that Defendant Sonabank breached the terms of a
promissory note, deed of trust, and other loan documents.
(Compl., ECF No. 1.) Currently pending before this Court is
Plaintiff's Motion for Leave to Amend the Complaint,
which seeks to add four new Plaintiffs and four new claims.
(ECF No. 34.) The parties' submissions have been
reviewed, and no hearing is necessary. See Local
Rule 105.6 (D. Md. 2018). For the reasons stated below,
Plaintiff's Motion for Leave to Amend the Complaint (ECF
No. 34) is DENIED.
facts of this case have been discussed previously in a
Memorandum Order of this Court. (ECF No. 13.) This Memorandum
Opinion provides a brief summary of the facts as alleged in
the Complaint. (ECF No. 1.) Plaintiff claims that Defendant
Sonabank breached the terms of a promissory note, deed of
trust, and other loan documents by charging North Charles
arbitrarily inflated late fees and refusing to accept
satisfaction of the loan amount. On April 7, 2006, Plaintiff
obtained a loan (the “Loan”) from Sonabank's
predecessor, Greater Atlantic Bank, to purchase property
located at 401 North Charles Street, Baltimore, Maryland (the
“property”). (Id. at ¶ 6.) A
Secured Term Promissory Note (the “Note”) in the
principal amount of $1, 200, 000.00 made by North Charles in
favor of Greater Atlantic Bank sets forth Plaintiff's
payment obligations. (Id. at ¶ 7.)
Plaintiff's commitments under the Note were secured by,
among other things, a Deed of Trust in favor of Greater
Atlantic Bank on the Property. (Id. at ¶ 8.) In
2009, Sonabank purportedly acquired rights to the Loan, the
Note, and the Deed of Trust and other related documents
(collectively, the “Loan Documents”).
(Id. at ¶ 9.)
2016, North Charles sought to refinance the Loan with another
lender. (Id. at ¶ 11.) As part of any
refinancing agreement, all amounts owed under the Note to
Sonabank would be paid; in turn, Sonabank would release its
liens under the Deed of Trust and other security interests,
encumbrances, and obligations related to the Loan and the
Loan Documents. (Id.) North Charles alleges that
each time it attempted to close on refinancing efforts with a
third-party lender, Sonabank demanded “late fees”
in various arbitrary amounts, ranging as high as a
“late charge balance” of $99, 844.52.
(Id. at ¶ 14.) North Charles further alleges
that Sonabank, despite North Charles's requests, refused
to explain how it calculated the late fees or provide
authority for charging them under the Loan provisions.
(Id. at ¶ 15.) Sonabank allegedly refused to
permit satisfaction of the Loan and release of its claimed
lien on the Property without requiring payment of the late
charge balance. (Id. at ¶ 20.)
Charles claims that the late charge is unlawful and are not
permitted by the Loan Documents. (Id. at
¶¶ 21-22.) The Original Complaint list two Counts
sounding in breach of contract. Under Count I, North Charles
demands that Sonabank specifically perform its contractual
obligations by releasing the Deed of Trust and any other
liens it holds against Plaintiff's property in exchange
for satisfaction of the loan balance, excluding the late
charge balance. (Id. at ¶¶ 23-30.) Under
Count II, North Charles demands $75, 000.00 in damages
together with interest, costs, and attorneys' fees, and
such other relief as this Court deems proper. (Id.
at ¶¶ 31-37.)
February 26, 2018 this Court issued a Memorandum Order (ECF
No. 13) denying Defendant's Motion to Dismiss (ECF No. 5)
and Motion for Leave to File Supplemental Memorandum of Law
(ECF No. 10.) On June 15, 2018, in accordance with the
briefing schedule set forth in an Order of this Court (ECF
No. 33), Plaintiff filed the pending Motion for Leave to
Amend the Complaint, seeking to add four additional
plaintiffs and to assert four new claims. (ECF No. 34).
plaintiff may amend his or her complaint once as a matter of
course before a responsive pleading is served, or within
twenty-one days of service of a responsive pleading or motion
under Federal Rule of Civil Procedure 12(b), (e), or (f),
whichever is earlier. Fed.R.Civ.P. 15(a). While Rule 15(a)
requires that leave “shall be freely given when justice
so requires, ” id., a district court may deny
leave to amend “when the amendment would be prejudicial
to the opposing party, the moving party has acted in bad
faith, or the amendment would be futile.” Equal
Rights Center v. Niles Bolton Assocs., 602 F.3d 597, 603
(4th Cir. 2010). “Whether an amendment is prejudicial
will often be determined by the nature of the amendment and
its timing.” Laber v. Harvey, 438 F.3d 404,
427 (4th Cir. 2006). An amendment is futile “when the
proposed amendment is clearly insufficient or frivolous on
its face.” Johnson v. Oroweat Foods
Co., 785 F.2d 503, 510 (4th Cir. 1986). As this Court
has repeatedly explained, an amendment is insufficient or
frivolous if it would not survive a motion to dismiss.
See, e.g., Whitaker v. Ciena Corp.,
RDB-18-0044, 2018 WL 3608777, at *3 (D. Md. July 27, 2018)
(citing Tawaab v. Virginia Linen Service, Inc., 729
F.Supp.2d 757, 770 (D. Md. 2010).
12(b)(6) of the Federal Rules of Civil Procedure authorizes
the dismissal of a complaint if it fails to state a claim
upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). The
purpose of Rule 12(b)(6) is “to test the sufficiency of
a complaint and not to resolve contests surrounding the
facts, the merits of a claim, or the applicability of
defenses.” Presley v. City of Charlottesville,
464 F.3d 480, 483 (4th Cir. 2006). While a complaint need not
include “detailed factual allegations, ” it must
set forth “enough factual matter (taken as true) to
suggest” a cognizable cause of action, “even if .
. . [the] actual proof of those facts is improbable and . . .
recovery is very remote and unlikely.” Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 555-56 (2007);
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A
plaintiff cannot rely on bald accusations or mere
speculation. Twombly, 550 U.S. at 555.
reviewing a Rule 12(b)(6) motion, a court “‘must
accept as true all of the factual allegations contained in
the complaint'” and must “‘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 omitted); Hall v. DirectTV, LLC, 846 F.3d
757, 765 (4th Cir. 2017). However, a court is not required to
accept legal conclusions drawn from those facts.
Iqbal, 556 U.S. at 678. “A court decides
whether [the pleading] standard is met by separating the
legal conclusions from the factual allegations, assuming the
truth of only the factual allegations, and then determining
whether those allegations allow the court to reasonably
infer” that the plaintiff is entitled to the legal
remedy sought. A Society Without A Name v. Virginia,
655 F.3d 342, 346 (4th Cir. 2011), cert. denied, 566
U.S. 937 (2012).
proposed First Amended Complaint (ECF No. 34-2)
(“PFAC”) would transform the nature of this
lawsuit. The PFAC would add four new plaintiffs: Eugene C.
Curran, Jr. (“Curran”), the alleged sole LLC
member of North Charles, and three limited liability
companies of which he is also the sole member, Victory
Management, LLC; Victory Realty, LLC; and Victory Capital,
LLC, (the “Victory Entities”) (collectively with
North Charles and Curran, the “Plaintiffs”).
(Pl.'s Mem. 2, ECF No. 34-1; PFAC ¶¶ 2, 4-6.)
The PFAC would also add four additional claims to the breach
of contract claim (Count I): tortious interference with
contractual relationships (Count II); tortious interference
with prospective advantage (Count III); injurious falsehood
(Count IV); and malicious use of process (Count V).
(Pl.'s Mem. 2; PFAC ¶¶ 69-103.) Finally, the
PFAC would remove the request for specific performance and
instead request damages resulting from Sonabank's failure
to perform its contractual obligations. (Pl.'s Mem. 2.)
Defendant objects to most of the proposed amendments as
futile, arguing that Plaintiff has strained unsuccessfully to
stretch North Charles's contract claim into a host of
frivolous claims involving various new parties. (ECF No. 35.)
Plaintiff's Request to Add Curran as a Party to Count
PFAC would add Curran as a party to North Charles' breach
of contract claim (Count I) against Sonabank arising from its
alleged breach of its contract with North Charles. Defendant
argues that Curran does not have standing to bring a breach
of contract claim against it because his status as a member
of 401 North Charles, LLC does not render him a party to the
Note, which sets forth the obligations of the parties and was
attached to Plaintiff's Original Complaint. (Def.'s
Mot. at 9, ECF No. 35; Promissory Note, ECF No. 1-2.)
only a party to a contract may enforce that contract.
Copiers Typewriter Calculators, Inc. v. Toshiba
Corp., 576 F.Supp. 312, 322 (D. Md. 1983). Individual
members of an LLC are not parties to the LLC's contracts
and cannot bring actions to enforce them. See Hosack v.
Utopian Wireless Corp., et al., DKC-11-0420, 2011 WL
1743297, at *4 (D. Md. May 6, 2011) (holding that the member
of an LLC was not a party to the LLC's contracts);
Baron Financial Corp. v. Natanzon, 471 F.Supp.2d
535, 540 (D. Md. 2006) (explaining that members of an LLC
cannot bring tortious interference claims because they are
not parties to the LLC's contracts). In this case, the
Note clearly indicates that it binds 401 North Charles, LLC,
not Curran. (ECF No. 1-2, at 1.) Although it appears to be