Filed: Jul. 18, 2006
Latest Update: Feb. 12, 2020
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 05-2425 SHOME TECHNOLOGIES, INCORPORATED, Plaintiff - Appellant, versus NOBSKA GROUP, LLC, Defendant - Appellee. Appeal from the United States District Court for the District of Maryland, at Baltimore. Andre M. Davis, District Judge. (CA-05- 2316-AMD) Submitted: July 6, 2006 Decided: July 18, 2006 Before MOTZ, TRAXLER, and SHEDD, Circuit Judges. Affirmed by unpublished per curiam opinion. Thomas P. Silis, Alexandria, Virginia,
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 05-2425 SHOME TECHNOLOGIES, INCORPORATED, Plaintiff - Appellant, versus NOBSKA GROUP, LLC, Defendant - Appellee. Appeal from the United States District Court for the District of Maryland, at Baltimore. Andre M. Davis, District Judge. (CA-05- 2316-AMD) Submitted: July 6, 2006 Decided: July 18, 2006 Before MOTZ, TRAXLER, and SHEDD, Circuit Judges. Affirmed by unpublished per curiam opinion. Thomas P. Silis, Alexandria, Virginia, ..
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 05-2425
SHOME TECHNOLOGIES, INCORPORATED,
Plaintiff - Appellant,
versus
NOBSKA GROUP, LLC,
Defendant - Appellee.
Appeal from the United States District Court for the District of
Maryland, at Baltimore. Andre M. Davis, District Judge. (CA-05-
2316-AMD)
Submitted: July 6, 2006 Decided: July 18, 2006
Before MOTZ, TRAXLER, and SHEDD, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Thomas P. Silis, Alexandria, Virginia, for Appellant. David J.
Heubeck, VENABLE, L.L.P., Baltimore, Maryland, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
On August 23, 2005, ShoMe Technologies, Inc. (“ShoMe”) filed
suit against Nobska Group, LLC, (“Nobska”) alleging breach of
contract, breach of duty of negotiation in good faith, intentional
interference with prospective economic advantage, and negligent
misrepresentation. Nobska moved to dismiss the suit on all counts.
The district court granted Nobska’s motion, finding that the
“plaintiff has not and simply cannot plausibly allege the
rudimentary elements of its ostensible claims.” ShoMe
Technologies, Inc. v. Nobska Group, LLC, No. AMD 05-2316 (D. Md.
Nov. 23, 2005). ShoMe has appealed the district court’s dismissal
with regard to its negligent misrepresentation claim. Finding no
error, we affirm.
In February 2004, ShoMe and Nobska entered into a Letter of
Intent regarding Nobska’s acquisition of “exclusive licensing,
commercial exploitation, and development rights” for certain ShoMe
technologies and software, “subject to the execution of a
definitive License Agreement.” J.A. 11.* The Letter of Intent
provided Nobska with a 60-day due diligence period, ending in April
2004, to investigate ShoMe’s business and assets. J.A. 12. The
Letter of Intent contained a non-solicitation provision that
*
In reviewing a dismissal under Federal Rule of Civil
Procedure 12(b)(6), we view the complaint in the light most
favorable to the plaintiff and accept all of the plaintiff’s well
pleaded assertions as true. Venkatraman v. REI Systems, Inc.,
417
F.3d 418, 420 (4th Cir. 2005).
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precluded ShoMe from entering into or considering any other
licensing or acquisition proposal until April 1, 2004, or until
Nobska informed ShoMe it was terminating any negotiations,
whichever occurred earlier. J.A. 5. With the exception of the
non-solicitation provision, a provision regarding governmental
approvals, and a provision requiring the representation of no
materially adverse changes in ShoMe’s business or assets, which
were enforceable solely against ShoMe, the Letter of Intent, by its
express terms, did not “create any legal obligations on the part
of, or any rights in favor of, [Nobska], [ShoMe], or any other
party.” J.A. 13-14.
On April 26, 2004, after the due diligence period had ended,
Nobska sent a letter to ShoMe, stating that Nobska had instructed
its attorneys to begin drafting a licensing agreement consistent
with the Letter of Intent for ShoMe to review. J.A. 15. Two
months later, Nobska notified ShoMe that, after completing its due
diligence investigation, Nobska would not proceed with a licensing
agreement. J.A. 16.
On August 23, 2005, ShoMe filed suit against Nobska. Nobska
moved to dismiss the suit, claiming that the Letter of Intent, by
its express language, was not binding on Nobska and did not cause
Nobska to owe ShoMe any legal duty unless and until a Licensing
Agreement was executed. The district court granted Nobska’s
motion, and ShoMe timely appealed.
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The grant of a motion to dismiss under Federal Rule of Civil
Procedure 12(b)(6) is reviewed de novo.
Venkatraman, 417 F.3d at
420. To state a claim for negligent misrepresentation under
Maryland law, a plaintiff must allege:
(1) the defendant, owing a duty of care to the plaintiff,
negligently asserts a false statement;
(2) the defendant intends that his statement will be
acted upon by the plaintiff;
(3) the defendant has knowledge that the plaintiff will
probably rely on the statement, which, if erroneous, will
cause loss or injury;
(4) the plaintiff, justifiably, takes action in reliance
on the statement; and
(5) the plaintiff suffers damage proximately caused by
the defendant's negligence.
Gross v. Sussex Inc.,
630 A.2d 1156, 1162 (Md. 1993).
In dismissing ShoMe’s negligent misrepresentation claim, the
district court found that Nobska did not owe ShoMe a duty of care
“insofar as it chose to communicate with [ShoMe] pursuant to the
letter of intent.” J.A. 48. We agree. Under Maryland law, a
plaintiff asserting a claim of economic loss due to negligent
misrepresentation may show that the defendant owed him a duty of
care if an “intimate nexus” exists between the parties. Griesi v.
Atlantic Gen. Hosp. Corp.,
756 A.2d 548, 554 (Md. 2000). This
“intimate nexus” can be demonstrated by showing contractual privity
between the parties, or its equivalent, such as “special
relationships consummated during the course of pre-contract
negotiations.”
Id. ShoMe claims that the lengthy contract
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negotiations between it and Nobska, which were documented in the
Letter of Intent, established a special relationship and intimate
nexus that caused Nobska to owe ShoMe a duty of care. This
assertion, however, is contradicted by the express language in the
Letter of Intent, which states that the Letter is an “expression of
intent only . . . and the parties do not intend to be legally bound
or otherwise to incur any obligations with respect to the proposed
transactions” until the execution of a License Agreement. J.A. 14.
ShoMe relies heavily on cases where Maryland courts have allowed
negligent misrepresentation cases to proceed when, in the course of
pre-contract employment negotiations, the defendant maintains
“exclusive control of” and withholds “vital and material
information” that is necessary for the plaintiff to completely
understand the situation. See Odyssey Travel Center, Inc. v. RO
Cruises, Inc.,
262 F. Supp. 2d 618, 628 (D. Md. 2003). In the
present case, ShoMe was fully aware that Nobska’s failure to act
within the deadlines set out in the Letter of Intent allowed ShoMe
to seek other licensing and acquisition proposals. By not seeking
other investors after the deadline, ShoMe acted “at its peril.”
J.A. 48.
Furthermore, the district court held that ShoMe could not
show, as a matter of law, that it acted in:
reasonable reliance on the April 26, 2004, letter in
failing to seek “alternative channels of distribution . .
. .” [T]he very fact that [Nobska] had not communicated
the outcome of its due diligence to [ShoMe] by the
5
deadline established in the letter of intent (60 days
from February 6, 2004) affirmatively undermines, rather
than supports, any claim of reasonable reliance on
[ShoMe’s] part.
J.A. 48. We agree that, as a matter of law, ShoMe has failed to
show that it reasonably relied on Nobska’s April 26, 2004, letter
in failing to seek alternative investors, as it was permitted to do
under the Letter of Intent following the April 1 deadline.
Since ShoMe has not alleged any set of facts that could state
a claim of negligent misrepresentation, we affirm the district
court’s decision. We dispense with oral argument because the facts
and legal contentions are adequately presented in the materials
before the court and argument would not aid the decisional process.
AFFIRMED
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