United States District Court, D. Maryland
XINIS UNITED STATES DISTRICT JUDGE
in this breach of contract action is Plaintiff Robert
Ringdahl's motion for summary judgment (ECF No. 47). The
motion is fully briefed, and no hearing is necessary.
See Loc. R. 105.6. For the following reasons, the
Court grants Ringdahl's motion as to liability, but
denies the motion as to damages. Ringdahl will be granted 14
days from the date of this Opinion and accompanying Order to
supplement the record as to damages and to submit a petition
for reasonable attorneys' fees.
following facts are undisputed. In June 2017, Ringdahl loaned
$150, 000 to Binary Group, Inc. (“Binary Group”),
a government contractor. ECF No. 50 ¶ 13; ECF No. 2 at
7; ECF No. 12 at 7; ECF No. 47-3 ¶ 3. Defendant Artin
Afsharjavan, a shareholder of Binary Group and a member of
its board of directors, personally guaranteed the loan as
memorialized in a written Guaranty Agreement. ECF No. 47-13;
ECF No. 50 ¶ 5; ECF No. 47-10 at 4-7. Additionally,
Binary Group's CEO, Kawaljit Singh, memorialized an
identical Guaranty Agreement in connection with the Ringdahl
loan. ECF No. 47-10 at 13-16. Both Guaranty Agreements
provided that if Binary Group defaulted on repayment terms of
the Ringdahl loan, Ringdahl could seek satisfaction of the
loan from Afsharjavan and Singh regardless of whether
Ringdahl pursued separate legal action against Binary Group.
ECF No. 47-10 at 4-7, 13-16.
addition to the Guaranty Agreements, Afsharjavan and Singh
executed two separate Stock Pledges, identical except for the
number of shares pledged. Afsharjavan secured the loan by
pledging 450, 000 shares of Binary Group stock to Ringdahl,
whereas Singh pledged 40, 500 shares. ECF No. 47-10 at 8-12,
17-22. Both Stock Pledges provided that the stock would be
released once the loan was paid in full. Id.
this time, Binary Group experienced financial difficulties
and failed to pay on the Ringdahl loan. On November 20, 2017,
Binary Group and Ringdahl modified the terms of the loan by
way of an allonge to the promissory note, which extended
payments on the loan through February 1, 2018 but did not
otherwise change the terms of the Guaranty Agreements or
Stock Pledges. ECF No. 47-15. Binary Group, however, did not
satisfy the amended loan agreement, and on January 2, 2018,
Ringdahl issued a notice of loan default on the company. ECF
No. 47-18. The outstanding loan balance owed to Ringdahl at
that time was $128, 750. ECF No. 47-18; ECF No. 47-3
January 11, 2018, the Binary Group Board scheduled an
emergency Board meeting to take place on January 22, 2018.
ECF No. 50-13. The purpose of the meeting was to address the
financial health of the company and whether Singh should be
ousted from the Board for having taken money from the
company. See ECF Nos. 50-13; 47-17. On the same day,
Singh and Ringdahl entered a separate agreement which
released Singh from his personal guaranty on the loan in
exchange for transferring his 450, 000 shares of Binary Group
stock to Ringdahl. ECF No. 50-12. Singh also agreed to allow
Ringdahl a proxy vote for the 450, 000 shares at upcoming
Board meetings until the shares were transferred.
Board meeting occurred as planned. On January 22, 2018, Singh
was unanimously voted off the Board and Ringdahl was voted in
as a Director, albeit over Afsharjavan's objection. ECF
No. 50-13. The record is unclear as to whether Singh ever
transferred the 450, 000 shares to Ringdahl, and if so, the
fair market value of such shares at the time of
transfer. Further, although Ringdahl acknowledged in
his deposition to having “settled” the matter
with Singh, the record sheds no additional light on the terms
of this settlement and whether the settlement satisfied some
or all of the outstanding balance of the Ringdahl
loan. ECF No. 50-5 at 3.
Ringdahl filed suit in the Circuit Court for Montgomery
County, Maryland alleging that Afsharjavan breached his
obligations under the Guaranty Agreement and the Stock Pledge
by failing to pay the outstanding loan amounts. ECF No. 2.
Afsharjavan, proceeding pro se, removed the action to this
Court. ECF No. 1. After a lengthy discovery period, Ringdahl
moved for summary judgment on both counts. ECF No. 47.
Standard of Review
judgment is appropriate when the court, viewing the evidence
in the light most favorable to the non-moving party, finds no
genuine disputed issue of material fact, entitling the movant
to judgment as a matter of law. See Fed. R. Civ. P.
56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322
(1986); Emmett v. Johnson, 532 F.3d 291, 297 (4th
Cir. 2008). “A party opposing a properly supported
motion for summary judgment ‘may not rest upon the mere
allegations or denials of [his] pleadings,' but rather
must ‘set forth specific facts showing that there is a
genuine issue for trial.'” Bouchat v. Baltimore
Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir.
2003) (quoting former Fed.R.Civ.P. 56(e)). “A mere
scintilla of proof . . . will not suffice to prevent summary
judgment.” Peters v. Jenney, 327 F.3d 307, 314
(4th Cir. 2003). Importantly, “a court should not grant
summary judgment ‘unless the entire record shows a
right to judgment with such clarity as to leave no room for
controversy and establishes affirmatively that the adverse
party cannot prevail under any circumstances.'”
Campbell v. Hewitt, Coleman & Assocs., Inc., 21
F.3d 52, 55 (4th Cir. 1994) (quoting Phoenix Sav. &
Loan, Inc. v. Aetna Casualty & Sur. Co., 381 F.2d
245, 249 (4th Cir. 1967)). Where the party bearing the burden
of proving a claim or defense “fails to make a showing
sufficient to establish the existence of an element essential
to that party's case, and on which that party will bear
the burden of proof at trial, ” summary judgment
against that party is likewise warranted. Celotex,
477 U.S. at 322. Although a pro se party is “given some
latitude, ” he may not avoid summary judgment by
“relying on bald assertions and speculative
arguments.” Mansfield v. Kerry, No. DKC
15-3693, 2016 WL 7383873, at *2 (D. Md. Dec. 21, 2016)
(citing Smith v. Vilsack, 832 F.Supp.2d 573, 580 (D.
preliminary matter, the Court must determine which state law
applies to the claims. Federal courts sitting in diversity
apply the conflict of laws rules of the forum state. See
Sokolowski v. Flanzer, 769 F.2d 975, 977 (4th Cir.
1985). Under Maryland law, if the contract does not include a
choice-of-law provision, the court applies “the law of
the jurisdiction where the contract was made.”
Cunningham v. Feinberg, 441 Md. 310, 326 (2015). The
Guaranty Agreement plainly states that Maryland law applies.
ECF No. 47-10 at 7. Although the Stock Pledge does not
include an express choice-of-law provision, the record
reflects that it was executed contemporaneously with the
promissory note between Ringdahl and Binary Group, which
clearly demonstrates that the Stock Pledge was made in
Maryland. ECF No. 2 ¶ 19; ECF No. 47-10 at 2-3 (stating
that the note “is secured . . . by a stock pledge
agreement dated the date hereof” and that the note
“is made in . . . the State of Maryland”).
Moreover, neither party disputes that Maryland law applies to
both agreements. The Court, therefore, applies Maryland law
to the claims.
Maryland, “to state a claim for breach of contract, a
plaintiff need only allege the existence of a contractual
obligation owed by the defendant to the plaintiff, and a
material breach of that obligation by the defendant.”
RRC Ne., LLC v. BAA Maryland, Inc., 413 Md. 638, 658
(2010). For each of the contracts in dispute, Afsharjavan has
failed to generate a genuine issue of ...