United States District Court, D. Maryland
UNITED STATES, et al., ex rel. SUSAN V.M. MAHARAJ Plaintiffs
THE ESTATE OF CHARLES HOWARD ZIMMERMAN, et al. Defendants.
L. HOLLANDER UNITED STATES DISTRICT JUDGE.
qui tam action concerns a six-acre parcel of land
located in Frederick County, Maryland (the “Land”
or the “Disputed Parcel”). Dr. Susan V. M.
Maharaj, the Relator, filed suit on behalf of the United
States of America and the State of Maryland against the
Estate of Charles Howard Zimmerman, Robert Clayton Stevens,
and George C. Stevens, pursuant to the False Claims Act
(“FCA”), 31 U.S.C. §§ 3729 et
seq., and Maryland's analogous statute
(“MFCA”), Md. Code, §§ 8-101 et
seq. of the General Provisions Article
(“G.P.”). ECF 1 (the
Land separates the Relator's farm from a farm formerly
owned by Charles Howard Zimmeran, who died in 2011. It is now
the property of Robert and George Stevens. The Relator
alleges that defendants did not own the Land, but registered
it in the Conservation Reserve Enhancement Program
(“CREP”), a federal program in which property
owners are paid to dedicate agricultural lands for
preservation. In so doing, defendants allegedly
defrauded the Farm Service Agency (“FSA”) of the
United States Department of Agriculture (“USDA”)
and its Maryland counterpart, the Maryland Farm Service
Agency. According to the Relator, the defendants received
“tens of thousands of dollars” from the United
States and/or Maryland between 2000 and 2015 by enrolling the
Land into the CREP.
Relator filed her Complaint under seal, along with eighteen
exhibits, pursuant to the initial sealing provisions of the
FCA and the MFCA, in order to provide time for the United
States and Maryland to decide whether they wished to
intervene. See 31 U.S.C. § 3730(b)(2); G.P.
§ 8-104(a)(3)(ii). Both the United States and the State
of Maryland declined to intervene. See ECF 2; ECF
18. The Seal was lifted (ECF 3), and the Relator has
continued to pursue the case.
Complaint contains four counts. Count I asserts that
defendants presented false claims to obtain payment from the
United States, in violation of 31 U.S.C. § 3729(a)(1(A).
In Count II, the Relator alleges a violation of 31 U.S.C.
§ 3729(a)(1)(B), claiming the knowing presentation of
false records to obtain payment. Count III asserts that
defendants used false records to avoid an obligation to pay
the United States, in violation of 31 U.S.C. §
3729(a)(I)(G). And, Count IV alleges that defendants made
false statement to obtain payment from Maryland, in violation
of G.P. §§ 8-101 et seq.
have moved to dismiss, pursuant to Fed.R.Civ.P. 12(b)(1),
12(b)(5), and 12(b)(6). ECF 12 (the “Defendants'
Motion”). The Defendants' Motion is supported by
one exhibit. ECF 12-1. The Relator opposes Defendants'
Motion (ECF 13), and defendants have replied (ECF 14),
supported by one exhibit. ECF 14-1. In addition, Maryland has
moved to dismiss, without prejudice. ECF 18 (the “State
Motion”). Defendants filed a response to the State
Motion (ECF 19), and the State replied. ECF 20. However, the
Relator did not respond to the State Motion.
hearing is necessary to resolve the issues. See
Local Rule 105.6. For the reasons that follow, I shall grant
the State Motion (ECF 18) and grant in part and deny in part
the Defendants' Motion (ECF 12).
Factual and Procedural Background
Disputed Parcel separates two farms in Frederick County,
Maryland. ECF 1, ¶ 11. The “Laughlin Farm”
lies to the east. Id. ¶ 12. The Relator and her
husband, Dr. Erich E. Blatter, purchased the Laughlin Farm in
2001 from Dr. Henry Laughlin and Marion P. Laughlin, who had
held the property since 1963. Id. ¶¶ 12,
16. The Relator refers to it as the “Blatter/Maharaj
Farm.” ECF 1, ¶ 14.
east lies the “Zimmerman Farm.” Id.
¶ 13. Beginning in the 1950s, Charles Zimmerman and his
wife, Mildred, rented the Zimmerman Farm, which was then a
dairy farm, from Ada Devries and Hilda D. Davies.
Id. ¶ 15. The Zimmermans purchased the property
from Hilda D. Davies on or about September 28, 1965.
Id. ¶ 17. However, according to the Relator,
the Zimmerman's did not acquire title to the Disputed
Parcel. Id. The Zimmermans owned the Zimmerman Farm
until Mr. Zimmerman's death in 2011. Id. ¶
26. The Zimmerman Farm is presently owned by Robert and
George Stevens. Id. ¶¶
parties fiercely contest the ownership of the Land, which has
been the subject of extensive litigation in the Maryland
courts. Plaintiff asserts that “none of the parties to
this action is the record owner” of the Disputed
Parcel. Id. ¶ 14.
Allegations Relating to The Estate of Charles Zimmerman
Zimmermans ceased dairy operations in 1999. Id.
¶ 18. Shortly thereafter, Mr. Zimmerman applied to place
37.3 acres of property in the CREP, knowing that he did not
own all of the property. Id. ¶¶ 10, 19-21.
The CREP is a land conservation program administered by FSA.
Id. ¶ 10 n.1. Farmers participating in the CREP
agree to remove environmentally sensitive land from
production in exchange for annual payment and other federal
and state benefits. Id. According to the Relator,
the 37.3 acres that Mr. Zimmerman sought to enroll in the
CREP included the Disputed Parcel. See Id.
¶¶ 11, 22.
end, Mr. Zimmerman submitted a Conservation Program Worksheet
(“CREP Worksheet”) on November 27, 2000.
Id. ¶ 19; see ECF 1-3 (“CREP
Worksheet”). The same day, the Zimmermans executed a
CREP Contract (“CREP Contract”). Id.
¶ 20; see ECF 1-4 (“11/27/2000 CREP
Contract”). In the CREP Contract, the Zimmermans
represented that Mr. Zimmerman was the “‘100'
percent owner, rather than operator, of the 37.3 acres for
enrollment, which included the Disputed Land.” ECF 1,
¶ 21; see Id. ¶ 23. In support of the CREP
Contract, the Zimmermans provided the Maryland Farm Service
Agency with a deed to the Zimmerman Farm. Id. ¶
CREP Contract began on January 1, 2001, and was renewed
annually. Id. ¶¶ 20, 24. When Ms.
Zimmerman passed away in 2007, Mr. Zimmerman revised the CREP
Contract, naming himself as the sole contract participant.
Id. ¶ 26; see ECF 1-5
(“7/11/2007 CREP Contract”).
according to the Relator, the Zimmermans “were
ineligible to place the Disputed Parcel in a CRP
Contract.” ECF 1, ¶ 22. In order to enter into a
CREP Contract, the participant “must be an owner or
operator of the eligible land, ” but Mr. Zimmerman was
neither the owner nor the operator of the Disputed Parcel.
Id. (citing 7 C.F.R. § 1410.5). He did not hold
the title to the Disputed Parcel. Id. ¶ 17.
And, he was not an operator of the Disputed Parcel, because
he ceased farming the prior year, and he did not submit any
paperwork averring to be an operator of the Land.
Id. ¶ 23.
Zimmeran allegedly knew that he did not own the Disputed
Parcel. Id. ¶ 34. He told family and neighbors
that the Disputed Parcel was part of the Laughlin Farm.
Id. ¶ 35. And, in the 1980s, Mr. Zimmerman
allegedly had an argument with Dr. Laughlin about their
property boundaries. Id. ¶ 36. Dr.
Laughlin's son mediated the dispute, which culminated in
Mr. Zimmerman and Dr. Laughlin signing a written agreement
acknowledging that their property boundaries were contested,
but agreeing that both parties could use the Disputed Parcel
rent-free. Id. Further, the Relator alleges that in
the spring of 2002, Mr. Zimmerman admitted to her that she
owned the Disputed Parcel. Id. ¶ 44. And, in
September 2010, he confirmed his lack of ownership over the
Disputed Parcel because he had Zimmerman Farm surveyed, and
the surveyors characterized the Disputed Parcel as an
“Area of Unknown Ownership.” Id.;
see ECF 1-11 (“Easement Survey”).
Relator alleges that she has exercised ownership over the
Disputed Parcel since purchasing the Laughlin Farm in 2001.
Id. ¶ 39. She treated the Land as her property,
including mowing and clearing brush and building a stone
walkway and patio. Id. ¶¶ 42, 43. And,
when individuals wanted to use the Disputed Parcel for
recreation, they asked Dr. Maharaj for permission, not the
Zimmermans. Id. ¶¶ 40, 41. Mr. Zimmerman
never objected to Dr. Maharaj or third parties using the
Disputed Parcel. Id. ¶¶ 40, 43.
Zimmerman passed away on January 29, 2011. Id.
¶ 26. Robert, acting as the personal representative of
the Estate of Charles Howard Zimmerman (the
“Estate”), revised the CREP Contract on August 1,
2011, to name the Estate as the CREP participant.
Id.; see ECF 1-6 (“1/29/2011 CREP
Contract”). But, when Robert filed an inventory of the
Estate's assets in May 2011, he did not list the Disputed
Parcel as Estate property. ECF 1, ¶ 27.
Allegations Relating to Robert and George Stevens
April 18, 2012, the Estate conveyed 5.515 acres of the
Zimmerman Farm to Robert and Diane Cole Stevens, and William
E. Moxley and Joan Moxley, as life tenants; and then to
Robert and George as tenants in common. Id. ¶
28; ECF 1-7 (“4/12/2012 Deed”). On January 1,
2013, the Estate conveyed the remaining 162.33 acres of the
Zimmerman Farm to Robert and George as joint tenants. ECF 1,
¶ 29; see ECF 1-8 (“12/3/2012
Deed”). Robert and George revised the CREP Contract on
January 16, 2013, naming themselves as the CREP participants.
ECF 1, ¶ 30; ECF 1-9 (“9/0/2015 CRP
Contract”). The CREP Contract ended on September 30,
2015. ECF 1, ¶ 20.
Relator alleges that Robert and George were aware that the
Zimmerman Farm did not include the Disputed Parcel.
Id. ¶ 46. Dr. Maharaj discussed the issue with
Robert on May 31, 2011. Id. ¶ 47. And, Robert
allegedly admitted to Dr. Maharaj's husband in June 2011
that the Disputed Parcel was part of the Laughlin Farm, not
the Zimmerman Farm. Id. ¶ 48.
4, 2014, Robert, on behalf of the Estate, filed a complaint
in the Circuit Court for Frederick County against, inter
alia, the Relator and her husband. He sought to quiet
title to the Disputed Parcel on the ground that the Estate
had obtained title to the Land through adverse possession.
Id. ¶ 51; see ECF 1-13 (“Circuit
William R. Nicklas, Jr. conducted a two-day bench trial on
September 15-16, 2015. ECF 1, ¶ 54; ECF 1-14
(“Transcript of Proceedings”). As a preliminary
matter, Judge Nicklas asked the parties whether the case
could proceed without the record title owners of the Disputed
Parcel being named as defendants. The Estate contended that,
notwithstanding the absence of the record title holder, the
court could determine which of the parties had a superior
right to possess the Land. ECF 1, ¶ 54. At the
conclusion of the trial, Judge Nicklas ruled that the Estate
“had met ‘the criteria of adverse possession'
and that, as between or amongst the Estate and the relator,
Dr. Maharaj, and her husband, Erich E. Blatter, the Estate
had the right to possess the Disputed Land by adverse
possession.” Id. (quoting ECF-14 at 11). The
circuit court entered an order on November 3, 2015, granting
the Estate the right to use and possess the Disputed Parcel
as against the Relator. Id. ¶ 56; ECF 1-15
Relator noted an appeal on November 30, 2015. ECF 1, ¶
57; ECF 1-16 (“Notice of Appeal”). In an
unreported opinion, the Maryland Court of Special Appeals
vacated the judgment, reasoning that the record owner was a
necessary party and therefore must be joined to a quiet title
action. ECF 1, ¶ 58; see Erich E. Blatter, et ux. v.
Estate of Charles Howard Zimmerman, No. 2146, Sept.
Term, 2015, 2017 WL 2730237, at *7 (Md. Ct. Spec. App. June
26, 2017). Thereafter, the Maryland Court of Appeals granted
certiorari. ECF 1, ¶ 58.
opinion of April 20, 2018, the Maryland Court of Appeals
determined that amendments to the Real Property Article of
the Maryland Code and to the Maryland Rules, enacted while
the case was pending before the Maryland Court of Special
Appeals, had retroactive effect and governed the quiet title
action. Id. ¶ 59; see Estate of Zimmerman
v. Blatter, 458 Md. 698, 706-07, 183 A.3d 223');">183 A.3d 223, 228
(2018); see also Title 14, Subtitle 6 of the Real
Property Article of the Maryland Code, and Maryland Rules
12-801 to 12-811. Accordingly, the Maryland Court of Appeals
concluded “‘that, under the circumstances of this
case, the proper disposition is to reverse the Court of
Special Appeals's judgment and remand this case to that
Court with instructions to vacate the circuit court's
judgment and remand this case to the circuit court for
further proceedings, so that the Estate can follow the
procedures that are outlined in the new statutes and Maryland
Rules concerning joinder of a defendant who is a deceased
record owner with no known personal
representative.'” ECF 1, ¶ 59 (quoting
Estate of Zimmerman, 458 Md. at 743, 183 A.3d at
to this ruling, on May 23, 2018, the Maryland Court of
Special Appeals vacated the underlying judgment of the
circuit court and remanded the case for further proceedings.
ECF 1, ¶ 60; ECF 1-17 (“5/23/2018 Order”).
The Estate filed an amended complaint on June 13, 2018, again
seeking to quiet title to the Disputed Parcel and asserting
ownership through adverse possession. ECF 1, ¶ 61; ECF
1-18 (“6/12/2018 Amended State Court Complaint”).
The quiet title action is pending in State court. See
Estate of Zimmerman v. Blatter, 10-C-14-001668
(Frederick Cty. Cir. Ct.).
and August 2014, the Relator filed complaints with the FSA
regarding the enrollment of the Disputed Parcel in the CREP.
ECF 1, ¶ 32. At the time, she also disclosed information
to the FSA regarding defendants' receipt of allegedly
improper payments. Id. Pursuant to the Freedom of
Information Act (“FOIA”), in December 2014, Dr.
Maharaj requested the results of the FSA's investigation
into her complaint. Id.; see ECF 1-10
(“FOIA Response”). The FOIA Response reflected
that the FSA decided against pursuing legal action against
defendants. ECF 1, ¶ 32.
Relator filed her Complaint under seal on behalf of the
United States and Maryland on September 28, 2018. ECF 1. The
United States filed a notice declining to intervene in the
suit on February 25, 2019. ECF 2. The Complaint was unsealed
by Order of April 15, 2019, which was docketed the following
day. ECF 3.
were issued on April 22, 2019. ECF 4. On July 23, 2019,
summons were returned executed, reflecting that the Relator
served the Estate, Robert, and George on July 16, 2019. ECF
9; ECF 10; ECF 11.
noted, defendants moved to dismiss the Complaint. ECF 12.
Relator timely responded (ECF 13), and defendants replied.
ECF 14. On October 30, 2018, Maryland filed a notice
declining to intervene, and moving to dismiss, without
prejudice, under the Maryland FCA. ECF 18. Defendants filed a
response on November 11, 2019. They assert that, as to the
Relator, the Maryland FCA claims should be dismissed with
prejudice but, as to the State, they should be dismissed
without prejudice. ECF 19. The State filed a reply on
December 3, 2019, seeking dismissal without prejudice. ECF
Standards of Review
Rule 12(b)(1), the plaintiff bears the burden of proving, by
a preponderance of evidence, the existence of subject matter
jurisdiction. See Demetres v. East West Const.,
Inc., 776 F.3d 271, 272 (4th Cir. 2015); see also
The Piney Run Preservation Ass'n v. Cty. Comm'rs of
Carroll Cty., 523 F.3d 453, 459 (4th Cir. 2008);
Evans v. B.F. Perkins Co., 166 F.3d 642, 647 (4th
Cir. 1999). A challenge to subject matter jurisdiction under
Rule 12(b)(1) may proceed “in one of two ways”:
either a facial challenge, asserting that the allegations
pleaded in the complaint are insufficient to establish
subject matter jurisdiction, or a factual challenge,
asserting “‘that the jurisdictional allegations
of the complaint [are] not true.'” Kerns v.
United States, 585 F.3d 187, 192 (4th Cir. 2009)
(citation omitted); accord Durden v. United States,
736 F.3d 296, 300 (4th Cir. 2013).
facial challenge, “the facts alleged in the complaint
are taken as true, and the motion must be denied if the
complaint alleges sufficient facts to invoke subject matter
jurisdiction.” Kerns, 585 F.3d at 192. On the
other hand, in a factual challenge, “the district court
is entitled to decide disputed issues of fact with respect to
subject matter jurisdiction.” Id. In that
circumstance, the court “may regard the pleadings as
mere evidence on the issue and may consider evidence outside
the pleadings without converting the proceeding to one for
summary judgment.” Velasco v. Gov't of
Indonesia, 370 F.3d 392, 398 (4th Cir. 2004); see
also In re KBR, Inc., Burn Pit Litig., 744 F.3d 326, 333
(4th Cir. 2014); Evans, 166 F.3d at 647.
raise an as-applied challenge to the Court's subject
matter jurisdiction, asserting that this Court should abstain
from exercising jurisdiction under the doctrine of
Colorado River abstention. ECF 12 at 2; see
Colo. River Water Conservation Dist. v. United States,
424 U.S. 800 (1976). Therefore, the Court may consider
evidence outside the pleadings in addressing the merits of
this argument, without converting the proceedings to one for
defendant may test the legal sufficiency of a complaint by
way of a motion to dismiss under Rule 12(b)(6). In re
Birmingham, 846 F.3d 88, 92 (4th Cir. 2017); Goines
v. Valley Cmty. Servs. Bd., 822 F.3d 159, 165-66 (4th
Cir. 2016); McBurney v. Cuccinelli, 616 F.3d 393,
408 (4th Cir. 2010), aff'd sub nom.,
McBurney v. Young, 569 U.S. 221 (2013); Edwards
v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999).
A Rule 12(b)(6) motion constitutes an assertion by a
defendant that, even if the facts alleged by a plaintiff are
true, the complaint fails as a matter of law “to state
a claim upon which relief can be granted.”
a complaint states a claim for relief is assessed by
reference to the pleading requirements of Fed.R.Civ.P.
8(a)(2). That rule provides that a complaint must contain a
“short and plain statement of the claim showing that
the pleader is entitled to relief.” The purpose of the
rule is to provide the defendants with “fair
notice” of the claims and the “grounds” for
entitlement to relief. Bell Atl. Corp. v. Twombly,
550 U.S. 544, 555-56 (2007).
survive a motion under Fed.R.Civ.P. 12(b)(6), a complaint
must contain facts sufficient to “state a claim to
relief that is plausible on its face.”
Twombly, 550 U.S. at 570; see Ashcroft v.
Iqbal, 556 U.S. 662, 684 (2009) (citation omitted)
(“Our decision in Twombly expounded the
pleading standard for ‘all civil actions' . . .
.”); see also Paradise Wire & Cable Defined
Benefit Pension Plan v. Weil, 918 F.3d 312, 317 (4th
Cir. 2019); Willner v. Dimon, 849 F.3d 93, 112 (4th
Cir. 2017). To be sure, a plaintiff need not include
“detailed factual allegations” in order to
satisfy Rule 8(a)(2). Twombly, 550 U.S. at 555.
Moreover, federal pleading rules “do not countenance
dismissal of a complaint for imperfect statement of the legal
theory supporting the claim asserted.” Johnson v.
City of Shelby, Miss., 574 U.S. ...