568 F. App'x 219
4th Cir.2014Background
- 1899 LLC was formed in 2001 by Stanley Keyser and Wendy Blair to purchase and rehabilitate Baltimore’s Northern District Police Station for tax-credit development.
- Keyser and related entities contributed at least $3 million to 1899 LLC through 2008 to support the project’s financing.
- In 2005–2006, Small Deal Fund L.P. invested $1.9 million for 99.9% profits, with Holdings as Managing Member and Small Deal as Investor Member under an Operating Agreement.
- The Operating Agreement treated financing by Holdings as capital contributions, with a narrow 120/180-day window allowing short-term loans that could avoid capital treatment.
- An Amendment in 2008 altered contributions and ratified the Operating Agreement; Holdings was later removed as Managing Member and Special Member replaced Holdings.
- In December 2011, Holdings and related parties sued 1899 LLC, Small Deal, Special Member, and Raleigh in Maryland state court; the case was removed to federal court and the district court dismissed the claims, leading to this appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Parol evidence applicability to loans | Plaintiffs contend oral loans predate or coexist with the Amendment and are not barred by parol rule. | Amendment ratified the written terms; oral loans contradict and are barred by the parol evidence rule. | Parol evidence barred; oral loan claims dismissed. |
| Unjust enrichment when contract exists | Unjust enrichment should lie alongside alleged loans or contributions. | Express contract governs; no quasi-contract recovery allowed. | Unjust enrichment claims dismissed. |
| Removal of Managing Member breach | Removal was unauthorized and breached the Operating Agreement and fiduciary duties. | Removal authorized for uncured violations with material adverse effect. | Removal authorized; no plausible breach claim. |
| IMDBOSS developer fee timing | Developer fee to IMDBOSS was due and payable now because earned at construction completion. | Payment is discretionary and not due until 2017 unless funds are available. | Claim premature; not yet due. |
| Accounting claim viability | Independent accounting remedy warranted by fiduciary or money-owed status. | No current obligation or fiduciary duty exists; no basis for an accounting. | Accounting claim dismissed. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading must show facial plausibility)
- Twombly v. Bell Atl. Corp., 550 U.S. 544 (U.S. 2007) (motion to dismiss requires facially plausible claims)
- Calomiris v. Woods, 727 A.2d 358 (Md. 1999) (ambiguous contracts; parol evidence rule governs)
- Martin Marietta Corp. v. Int’l Telecomms. Satellite Org., 991 F.2d 94 (4th Cir. 1992) (contract interpretation is a factual determination when ambiguous)
- County Comm’rs v. J. Roland Dashiell & Sons, Inc., 747 A.2d 600 (Md. 2000) (unjust enrichment exception when express contract governs)