My National Tax & Insurance Services, Inc. v. H & R Block Tax Services, Inc., 839 F. Supp. 2d 816

My National negotiated to become an HR Block franchise and signed the July 6, 2007 Agreement; HR Block owed My National $450,000 in two installments.
The Agreement conditioned the second installment of $225,000 on My National’s completion of 4,105 tax returns in the first year, a target My National allegedly could not reach.
My National alleges Koon conducted a due diligence review suggesting the returns potential was only about 2,600 in the relevant area.
Disputes over the interpretation of the performance target led to discussions, with HR Block advising My National it would receive only $72,241.17 of the disputed amount.
HR Block allegedly paid only part of the $72,241.17 on February 6, 2009, and My National filed suit on July 6, 2010, in Prince George’s County, Maryland.
The court granted HR Block’s motion to dismiss the fraud claim for lack of particularity and failure to plead elements of fraud; the contract claim remains pending.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Fraud claim pleadings meet Rule 9(b) particularity	My National pleads a misrepresentation by Koon and concealment by HR Block	Fraud claim lacking specificity and causation	Fraud claim dismissed for lack of particularity and sufficiency
Timeliness of the fraud claim under Maryland law	Claim filed within the Maryland statute period	Claim untimely	Claim timely raised under the record; other fraud theories fail on merits
Sufficiency of affirmative misrepresentation claim	There was an affirmative misrepresentation about the payment target	No specific misrepresentation identified or timely relied upon	No facially plausible affirmative misrepresentation; dismissed
Sufficiency of fraudulent concealment claim	HR Block concealed the true performance target	No fiduciary duty or justifiable reliance shown	Fraudulent concealment claim fails; no duty or reliance established
Maryland Franchise Registration and Disclosure Law claim	Statutory claim mirroring common-law fraud	Same deficiencies as common-law fraud	No facially plausible claim under Md. Bus. Reg. § 14-227

Edwards v. City of Goldsboro, 178 F.3d 231 (4th Cir. 1999) (standard for pleading and Rule 12(b)(6))
Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility pleading standard)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (combatting bare assertions; plausibility)
United States ex rel. Wilson v. Kellogg Brown & Root, Inc., 525 F.3d 370 (4th Cir. 2008) (fraud pleadings; who, what, when, where, how)
Harrison v. Westinghouse Savannah River Co., 176 F.3d 776 (4th Cir. 1999) (liberal construction of pleadings; specificity required)
Revene v. Charles County Commissioners, 882 F.2d 870 (4th Cir. 1989) (fraud elements and reliance considerations)
Papasan v. Allain, 478 U.S. 265 (1986) (converting pleadings into factual allegations; general rule)
James v. Goldberg, 256 Md. 520, 261 A.2d 753 (Md. 1970) (reliance and contract interplay in misrepresentation)
Lloyd v. Gen. Motors Corp., 397 Md. 108, 916 A.2d 257 (Md. 2007) (fiduciary duty element for concealment)
Nails v. S & R, Inc., 334 Md. 398, 639 A.2d 660 (Md. 1994) (elements of fraud in Maryland)
Frederick Rd. Ltd. P’ship v. Brown & Sturm, 360 Md. 76, 756 A.2d 963 (Md. 2000) (contract-reading and omissions)
Green v. H & R Block, Inc., 355 Md. 488, 735 A.2d 1039 (Md. 1999) (fiduciary-like duties and disclosures in Md. context)