ELLEN LIPTON HOLLANDER, District Judge.
In this diversity case, plaintiff Neil Horlick has sued defendant Capital Women's Care, LLC ("CWC"), and three individual members of CWC, Drs. Mitesh Kothari, David Solberg and Andrew Oh, alleging breach of an agreement to employ plaintiff. Complaint (ECF 1) ¶¶ 1-7. In particular, plaintiff has sued defendants claiming a violation of the Maryland Wage Payment and Collection Law (Count I), id. ¶¶ 32-38; for breach of contract (Count II), id. ¶¶ 39-41; and for promissory estoppel (Count III), id. ¶¶ 42-49.
Defendants have filed a "Motion To Dismiss" ("Motion," ECF 6), pursuant to Rule 12(b)(1) and Rule 12(b)(6) of the Federal Rules of Civil Procedure, along with a "Memorandum In Support Of Defendants' Motion To Dismiss" ("Motion Memo," ECF 6-1).
Plaintiff is a physician. Complaint ¶ 10. CWC, a Maryland limited liability company,
On February 16, 2011, Dr. Solberg sent plaintiff an email that said: "Neil, Please let me welcome you to the practice. We are excited to have you as part of our little family. I hope you enjoy a personally and professionally satisfying career with us." Id. ¶ 13. On February 23, 2011, defendants' office manager, Faye Yommer, sent plaintiff the employment contract (the "Agreement") via an email that stated: "Dr. Horlick, I have attached the official employment contract. Please review, print, sign and return both copies to me. Your start date continues to be undefined, but appears to be in the vicinity of May, subtract or add a month." Id. ¶ 14. Plaintiff signed and returned the undated Agreement to defendants.
Also in March 2011, Dr. Kothari told plaintiff to form an LLC with "Legal Zoom, LLC," an online legal service. Id. ¶ 17. Dr. Kothari explained that, if plaintiff had an Employer Identification Number ("EIN"), it would be easier for him to get paid by CWC, without "having to wait for credentialing from insurance companies which could take up to 6-9 months." Id. Accordingly, plaintiff formed "Horlick Locums, LLC."
Plaintiff continued to prepare to join the medical practice. He discussed the "call schedule" with Dr. Kothari and made arrangements
Moreover, plaintiff had professional photographs taken of himself, apparently pursuant to defendants' request. Id. ¶ 21. One of the photos was posted on the CWC website. Id. Also pursuant to defendants' request, plaintiff attended a three-day training session at the CWC Women's Care Central Business Office in Silver Spring, Maryland, id. ¶ 22, to learn how to use the electronic medical record system, "Next Gen."
In March or April 2011, Ms. Yommer, the CWC officer manager, called plaintiff and told him that his start date would be May 6, 2011.
According to plaintiff, "in reliance" on defendants' promises, he "took himself off the job market." Id. ¶ 25. Then, on May 3, 2011, Dr. Oh called plaintiff and told him "the agreement was canceled." Id. ¶ 26. The Agreement states, in part: "Company [i.e., CWC] may terminate this Agreement without cause, at any time, by giving Physician ninety (90) days prior written notice or payment of salary for such period in lieu of such notice." Id. ¶ 27 (hereinafter, the "Notice Provision"). Plaintiff contends that "[d]efendants breached the Agreement by failing to provide plaintiff with either ninety days prior written notice or payment of such period in lieu of such notice," id. ¶ 28, and that he sustained damages as a result of that breach. Id. ¶ 31. This suit followed.
Count I of the Complaint alleges violation of the Maryland Wage Payment and Collection Law (the "Wage Act"). Id. ¶ 35. See Md. Code (2008) § 3-501 et seq. of the Labor and Employment Article ("L.E."). Plaintiff claims that defendants were his "employer" within the meaning of that law, and that their failure to pay him wages
In Count II, plaintiff alleges breach of contract. Id. ¶ 40. He contends that, in terminating the Agreement without providing plaintiff either ninety days' advance notice or ninety days' salary in lieu of notice, defendants breached the Agreement. Id. Again, he demands ninety days' salary, plus interest. Id. ¶ 41.
In Count III, plaintiff asserts a promissory estoppel claim. He contends that, in selling his home in Washington, D.C. and moving to Hagerstown, Maryland, and in "[taking] himself off the job market" as of February 14, 2011, the date when Dr. Kothari offered him a position with CWC, he detrimentally relied on defendants'"clear and definite promise to employ plaintiff." Id. ¶¶ 43-45. He seeks "enforcement of the promise made by Defendants" as well as compensation for the damages he sustained. Id. ¶¶ 47, 49.
In total, plaintiff demands damages of "$266,000, or such other amount as is determined by a jury, consisting of unpaid wages, treble liquidated damages, the loss on the sale of [his] home, the costs of moving to and from Hagerstown, payments made to lease the Hagerstown apartment, interest, costs, attorney's fees, an amount equal to the tax on any award, and such other relief as the Court deems just and fair." Id. at 7.
As noted, defendants have moved to dismiss the case pursuant to Fed.R.Civ.P. 12(b)(6), for failure to state a claim upon which relief can be granted. In considering a motion to dismiss under Rule 12(b)(6), a court "`must accept as true all of the factual allegations contained in the complaint,'" and must "`draw all reasonable inferences [from those facts] in favor of the plaintiff.'" E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir.2011) (quoting Erickson v. Pardus, 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007), and Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc., 591 F.3d 250, 253 (4th Cir.2009)).
Under Fed.R.Civ.P. 8(a)(2), 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 defendant with "fair notice" of the claim and the "grounds" for entitlement to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 n. 3, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (citation omitted). To be sure, the plaintiff need not include "detailed factual allegations in order to satisfy" Rule 8(a)(2). Id. at 555, 127 S.Ct. 1955, 127 S.Ct. 1955. But, the Rule demands more than bald accusations or mere speculation. Id. To satisfy the minimal requirements of Rule 8(a)(2), the complaint must set forth "enough factual matter (taken as true) to suggest" a cognizable cause of action, "even if ... [the] actual proof of those facts is improbable and ... recovery is very remote and unlikely." Id. at 556, 127 S.Ct. 1955. A complaint that provides no more than "labels and conclusions," or "a formulaic recitation of the elements of a cause of action," is insufficient under the Rule. Id. at 555, 127 S.Ct. 1955.
A defendant may test the adequacy of a complaint by way of a motion to dismiss under Rule 12(b)(6). German v. Fox, 267 Fed.Appx. 231, 233 (4th Cir.2008).
However, in resolving a Rule 12(b)(6) motion, the court is not required to accept legal conclusions drawn from the facts. See Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986); Monroe v. City of Charlottesville, Va., 579 F.3d 380, 385-86 (4th Cir.2009), cert. denied, ___ U.S. ___, 130 S.Ct. 1740, 176 L.Ed.2d 214 (2010). Moreover, a motion pursuant to Rule 12(b)(6) "does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir.1999) (internal quotation marks omitted). But, if the "well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct," the complaint has not shown that "`the pleader is entitled to relief.'" Iqbal, 129 S.Ct. at 1950 (citation omitted).
In considering a Rule 12(b)(6) dismissal, the court may properly consider documents "attached or incorporated into the complaint," as well as documents attached to the motion to dismiss, "so long as they are integral to the complaint and authentic." Philips v. Pitt County Memorial Hosp., 572 F.3d 176, 180 (4th Cir. 2009); see also E.I. du Pont de Nemours & Co., 637 F.3d at 448; MCS Services, Inc. v. Jones, No. 10-1042, 2010 WL 3895380, at *1 n. 3 (D.Md. Oct. 01, 2010); Benfield Elec. Co., Inc. v. Keybank, No. 09-2071, 2009 WL 5206626, at *2 (D.Md. Dec. 23, 2009). In the case at bar, then, I may consider the Agreement, which was attached to the Motion, is relied upon in plaintiff's Complaint, and the authenticity of which is not in dispute.
Defendants have also moved to dismiss under Fed.R.Civ.P. 12(b)(1), claiming lack of subject matter jurisdiction. "It is well established that before a federal court can decide the merits of a claim, the claim must invoke the jurisdiction of the court." Miller v. Brown, 462 F.3d 312, 316 (4th Cir.2006). Fed.R.Civ.P. 12(b)(1) governs motions to dismiss for lack of subject matter jurisdiction. See Khoury v. Meserve, 268 F.Supp.2d 600, 606 (D.Md. 2003), aff'd, 85 Fed.Appx. 960 (4th Cir. 2004). "[A] motion to dismiss under Rule 12(b)(1) is nonwaivable and may be brought at any time-even on appeal-regardless of whether a litigant raised the issue in an initial pleading." Sucampo Pharms., Inc. v. Astellas Pharma, Inc., 471 F.3d 544, 548 (4th Cir.2006); see Fed. R.Civ.P. 12(h)(3) ("If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.").
Once a challenge is made to subject matter jurisdiction, the plaintiff bears the burden of proving that the Court has subject matter jurisdiction. See Evans v. B.F. Perkins Co., a Div. of Standex Int'l Corp., 166 F.3d 642, 647 (4th Cir.1999); see also Ferdinand-Davenport v. Children's Guild, 742 F.Supp.2d 772, 777 (D.Md. 2010); Khoury, 268 F.Supp.2d at 606. In ruling on a motion under Fed.R.Civ.P. 12(b)(1), the court "should `regard the pleadings as mere evidence on the issue,
Maryland's Wage Act protects terminated employees from employers who wrongfully withhold payment of wages. Stevenson v. Branch Banking and Trust Corporation, t/a BB & T, 159 Md.App. 620, 635, 861 A.2d 735, 743 (2004). "The principal purpose of the Act `[is] to provide a vehicle for employees to collect, and an incentive for employers to pay, back wages.'" Medex v. McCabe, 372 Md. 28, 39, 811 A.2d 297, 304 (2002). The subtitle does not focus on "the amount of wages payable but rather the duty to pay whatever wages are due on a regular basis and to pay all that is due following termination of the employment." Friolo v. Frankel, 373 Md. 501, 513, 819 A.2d 354, 362 (2003). L.E. § 3-505, governing payment upon termination of employment, provides:
Under the Wage Act, if an employer fails to pay an employee wages on termination of employment, "after two weeks have elapsed from the date on which the employer is required to have paid the wages, the employee may bring an action against the employer to recover the unpaid wages." L.E. § 3-507.1(a); see Baltimore Harbor Charters, Ltd. v. Ayd, 365 Md. 366, 382-83, 780 A.2d 303, 312-13 (2001). If "a court finds that an employer withheld the wages of an employee in violation of [the Wage Act] and not as a result of a bona fide dispute, the court may award the employee an amount not exceeding 3 times the wage, and reasonable counsel fees and other costs." L.E. § 3-507.1(b).
An "employer" within the purview of the Wage Act is "any person who employs an individual in the State or a successor of the person." L.E. § 3-501(b). However, a "mere supervisor" is not an employer within the meaning of the Wage Act. Watkins v. Brown, 173 F.Supp.2d 409, 415-16 (D.Md.2001). See also Hosack v. Utopian Wireless Corp., Civ. No. DKC-11-420, 2011 WL 1743297, *5 (D.Md. May 6, 2011).
Notably, the Wage Act does not define "employee." But, in Ayd, the Maryland Court of Appeals made clear that the Wage Act's provisions extend to executive and professional employees. 365 Md. at 384-85, 780 A.2d at 314. The Court stated: "Thus, if the General Assembly had intended to exclude administrative, executive and professional employees from the provisions of §§ 3-505 and 3-507.1, or otherwise limit the application of these provisions to that class of employees, it would have expressly done so.[]" Id. at 385, 780 A.2d at 314. The court reasoned that the use of the word "employee" in the statute was meant to distinguish between independent contractors and servants of the employer. Id. at 387, 780 A.2d at 315.
An "employee" within the purview of the Wage Act is one who would be
Id. at 392, 780 A.2d at 318-19;
Under the Wage Act, the definition of "wage" is very broad. "Wages" are defined as "all compensation that is due to an employee for employment," including bonuses, commissions, fringe benefits, and "any other remuneration promised for service." L.E. § 3-501(c). Notably, "[i]t is the exchange of remuneration for the employee's work that is crucial to the determination that compensation constitutes a wage." Provident Bank of Maryland v. McCarthy, 383 F.Supp.2d 858, 860 (D.Md.2005). Put another way, in order to be considered "wages," the subject payment must be due for work the employee actually performed. See, e.g., McCarthy, 383 F.Supp.2d at 861 (holding that an imputed interest payment sought by a former employee was a "wage" within the meaning of the Wage Act, because "[plaintiff's] entitlement to the Imputed Interest payment was conditioned solely upon his performance."); Stevenson, 159 Md.App. at 646-47, 861 A.2d at 750 (holding that severance pay only constitutes "wages" within the meaning of the Wage Act when it represents payment for work an employee performed prior to the termination of employment).
Under the Wage Act, even if an employer is found liable for wages, the employer is not liable for statutory treble damages, attorneys' fees, or costs if there is a bona fide dispute about the payment. Ayd, 365 Md. at 396, 780 A.2d at 320; L.E. § 3-507.1. The "existence of a bona fide dispute under § 3-507.1 is a question of fact left for resolution by the jury, not the trial judge." Ayd, 365 Md. at 396, 780 A.2d at 320-21.
Defendants claim that plaintiff was not an employee within the meaning of the Wage Act; rather, he was an independent contractor. According to defendants, "it is undisputed that Horlick was being retained initially by CWC to provide services as a locums tenen (which is a form of an independent contractor) and not as an employee." Motion Memo at 5.
The individual defendants also maintain that they were not employers within the meaning of the Wage Act, pointing out that none of them was a party to the Agreement. Motion Memo at 6. Further, they observe that, under Maryland law, members of a limited liability company are not "personally liable for the obligations of the limited liability company, whether those obligations arise in contract, tort or otherwise, solely by being a member." Id. (quoting MD. CODE (2007), Corps. & Assocs., § 4 A -301). The individual defendants contend that their actions were not independent, but were rather all taken on behalf of CWC. Motion Memo at 7. They also note that the definition of "employer" does not encompass supervisors, "even where that individual may be responsible for the overall operation of the company, including setting of salary and termination of the employee." Id. at 6.
Finally, defendants argue that the damages sought by plaintiff are not wages within the meaning of the Wage Act. In their view, the Wage Act "does not extend to purely contractual benefits that are not dependent on an employee's performance, like a notice provision." Id. at 8.
Plaintiff vigorously contests defendants' assertions. Asserting that it is "fiction" to call him an independent contractor, Dr. Horlick posits: "The Complaint, together with the Employment Agreement, does not contain the words `independent contractor,' nor do they make any provisions for such a designation. Clearly, this is because Plaintiff was an employee." Opposition at 3.
Dr. Horlick insists that the individual defendants were employers within the meaning of the Wage Act. He states: "... Defendants hired Plaintiff, determined where Plaintiff should report for duty, determined how Plaintiff would be paid, decided when he should work, gave him an office, and ultimately fired him. He was an employee and Defendants were his employers." Id. at 5.
Finally, plaintiff insists that the 90 days' salary he desires to recover under the Agreement constitutes wages within the meaning of the Wage Act. Noting that
In my view, the compensation plaintiff seeks is not for a "wage" within the purview of the Wage Act. That determination is dispositive of the Wage Act claim.
Plaintiff relies on McCarthy, supra, 383 F.Supp.2d at 860, for the proposition that "[o]nce a bonus, commission or fringe benefit has been promised as part of compensation for service, the employee is entitled to enforce the payment as wages." Plaintiff misapprehends McCarthy, In that case, the plaintiff had entered into an employment agreement with the defendant, which stipulated that, in the event that defendant terminated plaintiff without cause, plaintiff would be entitled to receive an Imputed Interest payment of $4,846,050. Id. at 859-60. Plaintiff asserted that he was terminated without cause, and defendant refused his demand for the Imputed Interest payment, allegedly in violation of the Wage Act. Id. at 860. In denying defendant's motion to dismiss, the court stated:
Id. at 861 (citation omitted).
Clearly, the McCarthy Court did not suggest that an employee would be entitled
Other cases support the same conclusion. See, e.g., Whiting-Turner Contracting Co. v. Fitzpatrick, 366 Md. 295, 783 A.2d 667 (2001) (holding that profit-sharing promised to plaintiff if he remained with employer for a certain period of time did not qualify as a wage within the meaning of the Wage Act, because plaintiff had not earned the bonus before his termination); Medex, 372 Md. at 37, 811 A.2d at 302 (holding that incentive fees promised to plaintiff qualified as wages within the meaning of the Wage Act because plaintiff had "performed all the work necessary to earn the fees").
As noted, plaintiff relies on the Notice Provision of the Agreement to support his claim for payment. However, the parties recognize that the Maryland courts have not ruled on whether compensation in lieu of notice of termination, pursuant to a contractual provision, constitutes wages under the Wage Act, akin to severance pay. Motion Memo at 8; Opposition at 7-8. McClure v. International Livestock Improvement Services Corp., 369 N.W.2d 801 (Iowa 1985), a case arising under Iowa's wage law, which is similar, in relevant part, to Maryland's Wage Act, provides guidance. In McClure, plaintiff claimed that, pursuant to his employment contract, his employer was obligated to pay him 30 days' salary in lieu of 30 days' notice of his termination. In holding that the payment of salary in lieu of notice did not constitute wages under the law, the court stated that the sum at issue was "not for services `rendered' but for damages." Id. at 804. In distinguishing that sum from severance payments, the court stated:
Id. at 805. See also Van Arkel v. Warren County, 365 F.Supp.2d 979, 1013-14 (S.D.Iowa 2005) (granting summary judgment to defendant on plaintiff's claim for salary in lieu of notice because the court found that plaintiff had "received all wages for all services rendered, which is all [the Wage Law] guarantees.") (emphasis in original).
Even if payment in lieu of notice may be compensable as wages, this would not dispense with the requirement for the performance of work in exchange for such a payment. Plaintiff concedes that he was told "the agreement was cancelled" before his pre-arranged start date. Thus, plaintiff never performed any work for defendants. Assuming, arguendo, that the training that plaintiff attended in Silver Spring constitutes work plaintiff performed for CWC, plaintiff has not alleged that he was to be compensated for attending the training, and plaintiff concedes that the training occurred prior to the anticipated commencement of his employment
Accordingly, with respect to Count I, the Wage Act claim, I shall grant defendants' motion to dismiss.
With respect to Count II, the breach of contract claim, the individual defendants contend that they are not liable under the Agreement, as they were not parties to it. Motion Memo at 9. Moreover, they claim that, under Maryland law, a member of a limited liability company is not "personally liable for the obligations of the limited liability company, whether arising in contract, tort or otherwise, solely by reason of being a member of the limited liability company." Id. (quoting MD.CODE (2007), § 4 A-301 of the Corporations and Associations Article).
Further, defendants claim that plaintiff cannot sustain a claim for breach of contract because the Agreement that plaintiff seeks to enforce "never became effective." Motion Memo at 10. Citing Section 4.1 of the Agreement, which states, "This Agreement shall commence on the Effective Date set forth in Section 1.1," defendants observe that Section 1.1 does not specify an effective date.
Plaintiff insists that defendants breached the Agreement by terminating it without providing plaintiff either ninety days' advance notice or ninety days' salary in lieu of notice. Complaint ¶ 40. Further, plaintiff disputes the contention that the individual defendants are not liable under the Agreement because they were not parties to it, and because they are shielded as members of a limited liability company. Opposition at 5. He maintains that the individual defendants are liable because they "[held] themselves out as employers" and "held Plaintiff out as their new employee, going so far as to include him on their website." Id. at 6.
Although Dr. Horlick suggests that "Maryland is no stranger to the theories behind piercing the corporate veil," he does not set forth any facts or arguments in support of piercing the corporate veil. Id. Rather, he claims that "such determinations
In essence, plaintiff argues that the Agreement was valid although it was never signed. But, defendants do not contend that the Agreement was invalid. They simply argue that, because the Agreement was cancelled before plaintiff began his performance under the terms of the Agreement, the Notice Provision was not triggered and thus they are not liable for any monetary payment to plaintiff.
Section 6.3 of the Agreement, titled "Governing Law," states: "This Agreement shall be construed pursuant to the laws of the commonwealth [sic] of Maryland." Motion Memo, Exh. A. The parties do not dispute that Maryland law applies to the breach of contract claim. Therefore, I will apply the substantive law of Maryland to the breach of contract claim, including Maryland's law regarding contract construction, to the extent it does not differ from federal law. See Reese v. Alea London Ltd., 332 Fed.Appx. 135, 138-39 (4th Cir.2009) (applying state law of contract construction to the subject insurance policy pursuant to the rule articulated in Erie R.R. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938)); Catalina Enterprises, Inc. Pension Trust v. Hartford Fire Ins. Co., 67 F.3d 63, 65 (4th Cir.1995) (same).
As a fundamental principle of contract construction in Maryland, the court must ascertain and effectuate the intention of the contracting parties. Society of Am. Foresters v. Renewable Natural Resources Found., 114 Md.App. 224, 234, 689 A.2d 662, 666 (1997); Hartford Accident & Indem. Co. v. Scarlett Harbor Assocs. Ltd. P'ship, 109 Md.App. 217, 290-91, 674 A.2d 106, 142 (1996), aff'd., 346 Md. 122, 695 A.2d 153 (1997). "[T]he primary source for determining the intention of the parties is the language of the contract itself." Hartford Accident & Indem., 109 Md.App. at 290-91, 674 A.2d at 142. In this regard, contracts are interpreted "as a whole to determine the parties' intentions." Sullins v. Allstate Ins. Co., 340 Md. 503, 508, 667 A.2d 617, 619 (1995). Moreover, the terms of the agreement are construed consistent with their usual and ordinary meaning, unless it is apparent that the parties ascribed a special or technical meaning to the words. See Fister v. Allstate Life Ins. Co., 366 Md. 201, 210, 783 A.2d 194, 199 (2001); Cheney v. Bell Nat'l Life Ins. Co., 315 Md. 761, 766, 556 A.2d 1135, 1138 (1989).
When a contract is clear and unambiguous, "its construction is for the court to determine." Wells v. Chevy Chase Bank, F.S.B., 363 Md. 232, 251, 768 A.2d 620, 630 (2001) (citation omitted). Moreover, when the provisions of a contract are unambiguous, a court will presume that the parties meant what they stated, without regard to what the parties to the contract personally thought it meant or intended it to mean. Id. at 251, 768 A.2d at 630; see also PaineWebber Inc. v. East, 363 Md. 408, 414, 768 A.2d 1029, 1032 (2001); Jones v. Hubbard, 356 Md. 513, 533, 740 A.2d 1004, 1015 (1999). The "`test of what is meant is ... what a reasonable person in the position of the parties would have thought' the contract
"A contract is ambiguous if `susceptible of two reasonable interpretations.'" Hardwire LLC v. Goodyear Tire & Rubber Co., 360 F.Supp.2d 728, 736 (D.Md.2005). See also Davis v. Magee, 140 Md.App. 635, 650, 782 A.2d 351, 360 (2001). "The construction of a contract is a question of fact which, if disputed, is not susceptible of resolution under a motion to dismiss for failure to state a claim." Wolman v. Tose, 467 F.2d 29, 34 (4th Cir. 1972); accord Tribalco, LLC v. Hue Technology, Inc., No. 11-935, 2011 WL 3821074, at *6 n. 1 (D.Md. Aug. 26, 2011). See also Martin Marietta Corp. v. Int'l Telecomm. Satellite Org., 978 F.2d 140, 143 (4th Cir.1992) (reversing trial court's grant of a motion to dismiss because the contract in issue was "not free of ambiguity"); Hardwire LLC, 360 F.Supp.2d at 736 (holding that "an ambiguous contract provision is a factual determination that precludes dismissal on a motion for failure to state a claim").
In my view, the Agreement is ambiguous in certain respects. For example, it is not clear whether, taken together, Sections 1.1 and 4.1 indicate that the Agreement is altogether unenforceable until the "effective date," or whether that date simply marked plaintiff's "start date" for provision of his services, but not the effective date of the Agreement. Defendants do not contend that the Agreement was not in effect because CWC had not yet signed it. As indicated, Section 4.3 says CWC "may terminate this Agreement, without cause, at any time, by giving Physician ninety (90) days prior written notice or payment of salary for such period in lieu of such notice." Motion Memo, Exh. A. Defendants contend that the phrase "at any time" is limited solely to the period after the commencement of performance, thereby implying that they had no duties under the Agreement until May 6, 2011. Arguably, their conduct suggests otherwise. Moreover, their position is at odds with a key benefit of employment contracts: to provide certainty; to set the precise terms of employment; and to avoid the unpredictability of traditional at-will employment.
In light of the significant factual disputes at issue and the ambiguity of the Agreement, I decline to dismiss the breach of contract claim as to CWC before the parties have had an opportunity to conduct discovery and clarify their positions.
I will, however, dismiss the breach of contract claim as to the individual defendants. The Agreement was between plaintiff and CWC. Under Maryland law, "a person cannot be held liable under a contract to which he was not a party." Residential Warranty Corp. v. Bancroft Homes Greenspring Valley, Inc., 126 Md.App. 294, 316, 728 A.2d 783, 794 (1999). In my view, the facts as alleged do not amount to a claim that the individual defendants were employers; rather, they merely performed supervisory duties within the scope of their membership in the LLC. "`[A] corporation must of necessity act through its agents....'" Southern Management Corp. v. Taha, 378 Md. 461, 480, 836 A.2d 627, 638 (2003) (citation omitted).
Further, under Maryland law, members of limited liability companies are not "personally liable for the obligations of the limited liability company, whether arising in contract, tort or otherwise, solely by reason of being a member of the limited liability company." MD. CODE (2007), § 4 A -301 of the Corps. & Assocs. Article. A party may seek to pierce the corporate veil when "`necessary to prevent fraud or enforce a paramount equity.'" Hildreth v.
Notably, plaintiff has not alleged the kind of facts necessary to state a claim for piercing the corporate veil. For example, he has not alleged that the individual defendants acted fraudulently. And, "[d]espite the proclamation that a court may pierce the corporate veil to enforce a paramount equity, arguments that have urged a piercing of the veil for reasons other than fraud have failed in Maryland Courts." Residential Warranty Corp., 126 Md.App. at 307, 728 A.2d at 789; accord Ramlall v. MobilePro Corp., 202 Md.App. 20, 29-31, 30 A.3d 1003, 1009-10 (2011). Indeed, "`[n]otwithstanding its hint that enforcing a paramount equity might suffice as a reason for piercing the corporate veil, the Court of Appeals to date has not elaborated upon the meaning of this phrase or applied it in any case of which we are aware.'" Id. (quoting Travel Committee, Inc. v. Pan American World Airways, Inc., 91 Md.App. 123, 158, 603 A.2d 1301, 1318 (1992)). See also Bart Arconti & Sons, Inc. v. Ames-Ennis, Inc., 275 Md. 295, 312, 340 A.2d 225, 235 (1975) (finding no paramount equity to justify piercing the corporate veil, although the individual defendants commingled the equipment of the three subject corporations, operated from a single place of business, made personal loans and transferred insurance policies to themselves, and permitted one corporation to become "all but insolvent" while enriching the other two in order to evade legal obligations asserted in an action against the corporation).
Plaintiff's allegations of liability on the part of the individual defendants are legally insufficient. I will, however, grant leave to amend. As to CWC, however, the breach of contract claim will remain pending.
In Count III, plaintiff seeks to recover damages based on promissory estoppel. "[I]n Maryland, promissory estoppel is an alternative means of obtaining contractual relief." Maryland Transp. Auth. Police Lodge #34 of the Fraternal Order of Police, Inc. v. Maryland Transp. Auth., 195 Md.App. 124, 215, 5 A.3d 1174, 1227 (2010), rev'd on other grounds, Maryland Transp. Auth. v. Maryland Transp. Auth. Police Lodge #34 of the Fraternal Order of Police, Inc., 420 Md. 141, 21 A.3d 1098 (2011). To prevail on a promissory estoppel claim in Maryland, a plaintiff must prove four elements:
Plaintiff asserts, Opposition at 7:
Defendants urge dismissal of the promissory estoppel claim. As to the individual defendants, they argue: "Plaintiff again relies on nothing more than their membership in CWC as grounds for their inclusion in this case." Motion Memo at 11. Notably, CWC does not dispute the merits of plaintiff's promissory estoppel claim. But, like the individual defendants, CWC challenges whether Plaintiff has satisfied the jurisdictional threshold of $75,000 in damages for a diversity case. Defendants contend that, if the Wage Act claim is dismissed, so as to preclude plaintiff's recovery of treble damages, plaintiff's alleged damages would fall below the jurisdictional threshold of $75,000 in damages under 28 U.S.C. § 1332(a), which governs diversity jurisdiction.
In particular, defendants assert that plaintiff "alleges only $67,879.45 in damages at most, plus moving expenses and a security deposit...." Id. at 11-12. In computing that sum, defendants calculate the 90 days' salary at $55,479.45,
Plaintiff insists that he "has pleaded an adequate jurisdictional amount to a legal certainty." Opposition at 9. He contends that, in addition to his demand for 90 days' salary and moving expenses, he is also entitled to compensation for damages sustained in stopping his job search when he received the offer from defendants, and for "contributions to the Defendants' practice prior to May 9." Id. at 9-10.
Preliminarily, for the reasons previously articulated, I am satisfied that there is no basis for plaintiff's promissory estoppel claim as to the individual defendants. As stated, supra, "in Maryland, promissory estoppel is an alternative means of obtaining contractual relief." Maryland Transp. Auth. Police Lodge #34 of the Fraternal Order of Police, Inc., 195 Md.App. at 215, 5 A.3d at 1227. And, under Maryland law, members of limited liability companies are not "personally liable for the obligations of the limited liability company ... arising in contract ... solely by reason of being a member of the limited liability company." MD. CODE (2007), § 4 A -301 of the Corps. & Assocs. Article. Further, plaintiff has not alleged facts that show that the individual defendants made any "clear and definite promise" to plaintiff in their individual capacities, rather than as members of the LLC. Plaintiff merely states conclusorily that "Defendants were holding themselves out as employers" and that they "held Plaintiff out as their new employee, going so far as to include him on their website." Opposition at 6. Plaintiff
With respect to CWC's contention, the issue as to the jurisdictional amount requires further inquiry. The subject matter jurisdiction of this Court in this case is premised on diversity of citizenship. The individual defendants all reside in Maryland, and CWC, also organized under Maryland law, has its principal place of business in Maryland. Complaint ¶¶ 2-5. However, plaintiff resides in the District of Columbia. Id. ¶ 1. The statute governing diversity jurisdiction, 28 U.S.C. § 1332, states: "The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between... citizens of different States." 28 U.S.C. § 1332(a)(1).
Notably, "It must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify dismissal." St. Paul Indemnity Co. v. Red Cab Co., 303 U.S. 283, 289, 58 S.Ct. 586, 82 L.Ed. 845 (1938). "Unless the claim for an amount over the jurisdictional prerequisite is made in bad faith, or unless it is plain from the complaint that an amount less than the jurisdictional amount is all that is at issue, the district court has jurisdiction over the case." Shanaghan v. Cahill, 58 F.3d 106, 112 (4th Cir.1995). Furthermore, "if some event subsequent to the complaint reduces the amount in controversy, such as the dismissal of one count based on the defendant's answer, the court must then decide in its discretion whether to retain jurisdiction over the remainder of the case." Id. In making such a determination, factors to be considered include "convenience and fairness to both parties,... the interests of judicial economy[,] ... whether the amount claimed in the complaint was made in good faith, or whether plaintiff was consciously relying on flimsy grounds to get into federal court[,] ... the existence of any state limitations bars to refiling in state court[,] ... the amount of time and energy that has already been expended[,] ... and other considerations [that] may arise on a case-by-case basis, such as the existence of some significant issue of state law best resolved in state court, that could inform the trial court's determination whether to keep or dismiss the case entirely." Id.
In my view, it does not appear, to a legal certainty, that plaintiff's claim is for less than the jurisdictional amount. The 90 days' salary, in the sum of $56,250
For the foregoing reasons, I will grant the motion to dismiss of defendants Capital Women's Care, LLC, Mitesh Kothari, David Solberg and Andrew Oh as to Count I; and I will dismiss Counts II and III as to the individual defendants. As to CWC, I will deny the motion to dismiss with respect to Counts II and III. A separate Order consistent with this Memorandum Opinion follows.
For the reasons set forth in the accompanying Memorandum Opinion, it is this ____ day of November, 2011, by the United States District Court for the District of Maryland, ORDERED: