United States District Court, D. Maryland, Southern Division
J. HAZEL United States District Judge
Grace Collins alleges breach of contract and fraudulent
inducement claims against Defendants. Pending before the Court is
Defendants' Motion to Dismiss or Motion to Transfer. ECF
No. 9. No. hearing is necessary. See Loc. R. 105.6
(D. Md. 2016). For the foregoing reasons, Defendants'
Motion to Transfer will be granted.
December 9, 2016, Plaintiff Grace Collins agreed to loan
Defendant Hannibal Production Inc. (Hannibal) $245, 000. ECF
No. 1-1 at 25. According to the loan agreement, in
consideration for Hannibal's receipt of the $245, 000
principal loan amount, Hannibal was to pay Collins “a
one-time interest payment” of $31, 850.00 on December
5, 2017. Id. at 26. The loan agreement also
obligated Hannibal to pay back the loan's principal on
December 5, 2017. Id.
Richard Rionda Del Castro was Hannibal's President and
negotiated the loan agreement on Hannibal's behalf. ECF
No. 1-1 at 2; ECF No. 1-8 at 3. Specifically, Del Castro flew
to Collins's home in Maryland, which Collins shared with
her mother, to discuss the loan agreement's terms on
December 8, 2017. ECF No. 1-1 at 2; ECF No. 1-8 at 3.
Although she did not have knowledge of his reputation at the
time that she made the loan, Collins alleges that Del Castro
came to Maryland “to get money where people didn't
know his reputation” because his contacts in Los
Angeles who knew “his reputation” would be weary
of lending him or his production company money. ECF No. 1-1
Del Castro met Collins in Maryland, Collins explained that
she was interested in making a bridge loan that would accrue
interest quickly and expand funds designated for her
mother's health care costs. ECF No. 1-8 ¶¶ 3,
13. Collins's mother Duk Sun Lyu has Alzheimer's
Disease, among other health issues, and her health care costs
are estimated to be $100, 000 per year. Id. ¶
Castro told Collins that the loan would serve as “the
very first seed capital to kick start the acquisition of the
rights to produce” the film, Speed Kills, and that
Collins' loan would be repaid before any other
obligations connected to the film. Id. ¶ 13;
see also ECF No. 1-1 at 25. He explained that the
loan agreement was a “simple straight forward bridge
loan agreement” and that she would be repaid after bank
funding was acquired to finance the movie and no later than
December 5, 2017. ECF No. 1-8 ¶ 11. Collins was not
under the impression that repayment of her loan was
contingent upon Hannibal finishing production or distributing
the film. Id. ¶ 2. On December 7, 2016, before
the parties signed the loan agreement, Collins wired Hannibal
$10, 000 from a bank account in Maryland in both her and her
mother's name. ECF No. 1-1 at 40. It is not clear if
Collins had a guarantee that this $10, 000 would be returned
to her if the parties did not agree to the broader loan deal.
See ECF No. 1-1; ECF No. 1-8.
and Del Castro signed the loan agreement at the Gaylord Hotel
in Maryland two days later on December 9, 2016. ECF No. 1-1
at 31; ECF No. 19 at 6. Patricia Rionda Del Castro,
Hannibal's Secretary, and Timothy Cavanaugh, an Executive
Producer were also signatories. Id.
way to meet Del Castro to sign the contract, Collins spoke to
her lawyer who told her that she should speak to a contracts
or entertainment lawyer based in Los Angeles. ECF No. 1-1 at
13. However, Plaintiff felt obligated to sign the loan
agreement because Del Castro had come to Maryland from
California. Id. at 14. Plaintiff had also already
wired Hannibal $10, 000 of the loan principal, ECF No. 1-1 at
40, and it is not clear that the lawyer she spoke to had
knowledge of this transfer. Collins met Del Castro at 11:00am
and Del Castro had a 1:00pm flight. ECF No. 1-1 at 13. They
went over only paragraphs 2 and 4 of the loan agreement
together. Id. These paragraphs describe the interest
arrangement and the payback date. Id. They discussed
that if the loan was repaid prior to the payback date in
approximately June 2017 rather than December 2017, they might
mutually agree to reduce the interest rate to a flat 6%.
Id. Plaintiff wired the remaining principal loan
amount from a Bank of America located in Maryland on December
13, 2016. ECF No. 1-1 at 41. Collins and her mother's
names both appear on the account. Id.
did not pay Collins the principal loan amount or interest
when it came due on December 5, 2017. See ECF No.
1-8 ¶ 3. Del Castro treated the loan as if repayment was
contingent upon the film's complete production and
distribution. ECF No. 1-8 ¶ 2. He also invoked the
contract's “Force Majeure” clause, which
Neither party hereto shall be deemed in default of its
obligations hereunder if the business operations of HPI [i.e.
Hannibal Production, Inc.] are delayed, or become impossible
or impractical, by reason of any cause beyond HPI's
reasonable control including, without limitation, war,
strike, accident, act of God, civil unrest, epidemic, death,
illness, or act or order of any governmental authority (such
causes collectively referred to herein as a “Force
Majeure Event”). Each party acknowledges the risk that
payment of the Interest may be delayed due to a Force Majeure
Event. In the event any portion or all of the above are
delayed due to a Force Majeure Event, HPI shall use its best
efforts to resume the payment of any sums due within a
reasonable time after the Force Majeure Event has ended. Both
parties shall be responsible for their own costs and expenses
in connection with any such Force Majeure Event.
ECF No. 1-1 at 30-31. According to Del Castro, Hurricane
Maria prevented Hannibal from abiding by the terms of the
loan agreement. ECF No. 1-8 at 3. At the time the parties
signed the loan agreement, Puerto Rico was a tentative
production location. ECF No. 1-1 at 25. Collins alleges that
all filming had been completed a few months before Hurricane
Maria hit Puerto Rico and that post-production editing was
always scheduled to be accomplished in California. ECF No.
1-8 ¶ 5. In any case, Collins alleges that repayment of
her loan was not contingent on the film's production
schedule. ECF No. 1-8 ¶ 2.
alleges that Del Castro lied about the Hurricane's impact
on the film because he never intended for Hannibal to repay
the loan. ECF No. 1-1 ¶ 6; ECF No. 1-8 ¶ 11.
According to Collins, before Del Castro flew to Maryland to
convince her to sign the loan agreement, he knew that she was
in the vulnerable financial position of seeking to stretch
her mother's healthcare funds and with this in mind he
wrote “a premeditated fraudulent contract” with
loopholes “designed to take advantage” of her
inability to spend money recovering the investment.
Id. In Collins's words, Del Castro
“premediated tricking my mom out of her money before he
even came to my home as he could see many loopholes in the
contract he knowing [sic] that I personally had no money
that if we went to court . . . I would run out of
money.” ECF No. 1-1 at 17. The loan agreement includes
an arbitration clause, which states:
Any dispute, controversy or claim arising out of or relating
to the enforcement, interpretation or alleged breach of this
agreement, including without limitation tort claims and
arbitrability issues, shall be submitted to and resolved by
binding arbitration in Los Angeles, California before one
neutral arbitrator with substantial experience in
entertainment industry matters appointed by the American
Arbitration Association in accordance with its Commercial
Arbitration Rules, and ...