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RX Trials LLC v. Coastal Biomedical Research, Inc.

United States District Court, D. Maryland

November 13, 2019

RX TRIALS, LLC, Successor-In-Interest to Rx TRIALS, INC., Plaintiff,
v.
COASTAL BIOMEDICAL RESEARCH, INC., ET AL. Defendants.

          MEMORANDUM OPINION

          J. MARK COULSON, UNITED STATES MAGISTRATE JUDGE

         The case is before me for all proceedings by the consent of the parties pursuant to 28 U.S.C. § 636(c). (ECF Nos. 15 and 16). Now pending before this Court is Plaintiff's (“Rx Trials”) Amended Motion for Summary Judgment as to Count II (Intentional Concealment) against Linda A. Glaser, M.D. (“Defendant”). (ECF No. 31). Defendant did not file an opposition and no hearing is necessary. See Loc. R. 105.6 (D. Md. 2018).

         I. BACKGROUND

         Rx Trials is a limited liability company, organized under Maryland law, that specializes in clinical research trial efficiency and consulting. (ECF No. 3 ¶ 2). Coastal is a corporation, organized under California law, that conducts clinical research trials and is owned and operated by Dr. Glaser. Id. ¶¶ 3, 66-68. On June 15, 2013, Rx Trials and Coastal entered into a Partner Site Agreement for consulting services and site management research. (ECF No. 27-1). Per the agreement, Coastal would utilize Rx Trial's clinical trial management software (the “Software”) for site management, and this would permit Rx Trials to keep track of the trials for billing purposes. In exchange for Rx Trial's services and Software, Coastal agreed to compensate Rx Trials by paying it a percentage of each month's revenue based on a tiered payment schedule outlined within the Agreement. Id. at 22. The parties agreed that all clinical trials would utilize Rx Trial's services and Software, and thus all trials were subject to the pricing schedule. Id. Furthermore, Coastal was to send Rx Trials all payments made to Coastal by trial sponsors and supply records of such payments each month. Id. Once all the information on revenue was gathered, Rx Trials would issue an invoice to Coastal which would be due within thirty (30) days of receipt. Id.

         It is undisputed that Coastal ignored these obligations and breached the Agreement. Dr. Steven Geller, the managing member of Rx Trials, submitted an affidavit in which he affirms that Coastal and Dr. Glaser stopped utilizing the Software, ceased updating Rx Trials as to what clinical trials Coastal was performing, and instructed trial sponsors to compensate Coastal in a manner that Rx Trials could not monitor. Id. at 29. During this time Coastal conducted clinical trials that generated over $1.1 million in revenue. Id. The majority of this revenue, however, was never reported to Rx Trials as required by the Agreement.

         Once Rx Trials discovered Coastal's conduct, it served a formal notice of default. Coastal never responded. Accordingly, Rx Trials filed suit in this Court on July 26, 2018 alleging four counts: Count 1 - Breach of Contract against Coastal; Count II - Intentional Concealment against Dr. Glaser; Count III - Negligence against Coastal; and Count VI - Violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”). (ECF No. 3). This Court entered a Default Judgment as to Counts I and III against Coastal. (ECF No. 27-1). Plaintiff then filed a Motion for Summary Judgment, which this Court denied on August 26, 2019. (ECF No. 29).

         Plaintiff now seeks a Motion for Summary Judgment as to Count II in the amount of $209, 060.30. (ECF No. 31-2 at 1).

         II. STANDARD OF REVIEW

         Federal Rule of Civil Procedure 56(a) requires the Court to “grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” The moving party can do so by demonstrating the absence of any genuine dispute of material fact or by showing an absence of evidence to support the non-moving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986). A dispute as to a material fact “is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” J.E. Dunn Const. Co. v. S.R.P. Dev. Ltd. P'ship, 115 F.Supp.3d 593, 600 (D. Md. 2015) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).

         If a motion for summary judgment goes unopposed, the Court must still view the facts and draw reasonable inferences in the light most favorable to the nonmoving party. Iko v. Shreve, 535 F.3d 225, 230 (4th Cir. 2008); Custer v. Pan Am. Life Ins. Co., 12 F.3d 410, 416 (4th Cir. 1993). Moreover, the movant still must show that the uncontroverted facts entitle the party to judgment as a matter of law. Custer, 12 F.3d at 416.

         III. DISCUSSION

         On August 26, 2019, this Court denied Plaintiff's Motion for Summary Judgment against Dr. Glaser as to Counts II (Intentional Concealment) and County IV (RICO violations). Plaintiff argues that the reasons underlying this Court's denial of Count II are addressed and remedied in this Amended Complaint. (ECF No. 31-2 at 1). Consequently, Plaintiff requests the Court enter Summary Judgment in favor of Plaintiff and against Dr. Glaser as to Count II- Intentional Concealment, in the amount of $209, 060.30. (ECF No. 31-2 at 1).

         Count II- Intentional Concealment

         Under Maryland law, a claim of intentional concealment or fraudulent concealment must establish that: (1) the defendant owed a duty to the plaintiff to disclose a material fact; (2) the defendant failed to disclose that fact; (3) the defendant intended to defraud or deceive the plaintiff; (4) the plaintiff took action in justifiable reliance on the concealment; and (5) the plaintiff suffered damages as a result of the defendant's concealment. Hill v. Brush Engineered Materials, Inc., 383 F.Supp.2d 814, 820 (D. Md. 2005). “Plaintiff must prove either that Defendant had a duty to disclose a material fact to them and failed to do so, or that Defendant concealed a material fact for the purpose of defrauding Plaintiff.” Odyssey Travel Ctr., Inc. v. RO Cruises, Inc., 262 F.Supp.2d 618, 629 (D. Md. 2003). Intentional concealment may be shown when a duty to disclose exists but “defendant makes an active misstatement of fact, or only a partial or fragmentary statement of fact, which misleads the plaintiff to its injury.” Id. (“[O]rdinarily when one owes no legal obligation to ...


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