Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

401 North Charles LLC v. Sonabank

United States District Court, D. Maryland

December 13, 2018

401 NORTH CHARLES, LLC, Plaintiff,
SONABANK, Defendant.


          Richard D. Bennett United States District Judge.

         This 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.


         The 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.)

         In 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.)

         North 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.)

         On 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).


         A 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).

         Rule 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.

         In 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).


         Plaintiff's 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.[1] (ECF No. 35.)

         I. Plaintiff's Request to Add Curran as a Party to Count I.

         The 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.[2] (Def.'s Mot. at 9, ECF No. 35; Promissory Note, ECF No. 1-2.)

         Generally, 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 signed ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.