PAUL W. GRIMM, District Judge.
Allied Fire Protection, Inc. ("Allied Fire") filed suit against former employee Huy Thai, alleging that, after Thai's employment ended, he breached a purported "Non-Compete/Non-Disclosure Agreement" that he signed and, specifically, the non-compete, non-solicitation, and non-disclosure provisions of that contract, as well as a provision requiring Thai to return his employer's property when his employment with the company ended. Allied Fire also claims that Thai is liable for tortious interference with contractual relations and prospective advantage, as well as intentional misrepresentation. Thai has moved to dismiss the case. ECF No. 7.
Allied Fire, a Maryland corporation engaged in the business of "fire protection, suppression, consulting, design, engineering, fabrication and equipment installation," Compl. ¶ 3, ECF No. 2, employed Thai from 2006 to 2014. Id. ¶¶ 11-12. Thai was "initially hired . . . as an engineer to complete designs and drawings for some of the projects Plaintiff was hired to complete," and he "headed Plaintiff's business" during its chief executive officer's absence. Id. ¶¶ 4, 15. In that capacity, "Plaintiff's CEO trained the Defendant on how Plaintiff[] does business and revealed to the Defendant Plaintiff's industry trade secretes [sic] and advantages in the fire protection field." Id. ¶ 16. In 2013, Thai purportedly signed a "Non-Compete/Non-Disclosure Agreement" ("Agreement"). Id. ¶ 18.
For reasons that are not discernable from the record, and despite predicating its Complaint on two breaches of a purportedly written contract, Allied Fire did not attach the contract underlying its claims to its Complaint or any subsequent filing and has not produced it in response to Thai's numerous attempts to obtain it. See Compl.; Emails, ECF No. 18-1. Instead, Allied Fire summarizes the relevant provisions of the purported Agreement, and Thai does not appear to dispute the summary, which follows:
Compl. 2-3. Although the parties refer generally to a non-compete clause in their briefing, the first, second, and fourth provisions are the non-compete clauses; the third is a non-solicitation clause; the sixth is a non-disclosure clause; and the fifth provision, one not typically discussed in the context of restrictive covenants, I will refer to as the company property clause.
After Thai's employment with Allied Fire ended,
Thai removed the case to this Court under diversity jurisdiction on February 24, 2017 and filed the pending motion on March 3, 2017. Allied Fire an untimely opposition thirty-three days later on April 5, 2017, and Thai filed a timely reply on April 19, 2017.
In its Opposition, Allied Fire challenges this Court's jurisdiction to resolve its claims because, it believes, to do so would violate Article I, § 10, Clause 1 of the United States Constitution, the so-called "Contracts Clause." Pl.'s Opp'n, 5, 10-13. Specifically, Allied Fire asserts that the purported Agreement included a "choice of law section" that stated:
Id. at 11. In its view, if this Court maintained jurisdiction, it would interfere with the parties' obligations under this contractual provision, in violation of the Contracts Clause. Allied Fire seeks remand back to the Circuit Court for Prince George's County.
Thai argues that Allied Fire has waived the benefit of any forum selection clause that might have existed because the request for remand was untimely under 28 U.S.C § 1447(c), which requires that removal must be challenged within 30 days of filing of the notice of removal. Def.'s Reply 9. Additionally, Thai contends that the purported forum selection clause does not constitute a waiver of the right to removal because the clause is ambiguous, not "clear and unequivocal." Id. at 10-11.
The contracts Clause provides that "[n]o State shall . . . pass any . . . Law impairing the Obligation of Contracts. . . ." U.S. Const. art. I, § 10, cl. 1. Insofar as Thai insists that it would violate the Contracts Clause for this Court—part of the judiciary branch of the federal government—to maintain jurisdiction, his argument is completely without merit because "[t]he Contracts Clause applies only to the states, not to the federal government or individuals." Nix v. NASA Fed. Credit Union, 200 F.Supp.3d 578, 587-88 (D. Md. 2016) (citing Pension Ben. Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 734 n.9 (1984)).
Moreover, although a party may assert lack of personal jurisdiction as a defense in a lawsuit, failure to do so in a timely manner waives this defense. Ins. Corp. of Ireland, Ltd., v. Conmpagnie des Bauxites de Guinee, 456 U.S. 694, 703 (1982). Allied Fire did not file a timely motion to remand. Instead, it challenged personal jurisdiction in its Opposition, which it filed forty days after Thai removed the case to this Court and filed its Notice of Removal, ECF No. 1. An opposition is an inappropriate means of seeking remand on any ground other than lack of subject matter jurisdiction. See Fed. R. Civ. P. 7(b)(1); MHD-Rockland Inc. v. Aerospace Distribs. Inc., No. CCB-13-2442, 2014 WL 31677, at *6 (D. Md. Jan. 3, 2014) ("[A] district court can remand a case based on a defect other than a lack of subject matter jurisdiction only if a party makes a motion for the court to do so within thirty days of the filing of the notice of removal. By contrast, a district court can remand a case based on defects in subject matter jurisdiction at any time sua sponte. (citing Ellenburg v. Spartan Motors Chassis, Inc., 519 F.3d 192, 198-99 (4th Cir. 2008))). Further, Allied Fire did not challenge the validity of the removal to this Court in the required 30 days from the filing of notice of removal, see 28 U.S.C. § 1447(c); MHD-Rockland, 2014 WL 31677, at *6. Consequently, Allied Fire has forfeited the right to challenge the jurisdiction of this Court. Therefore, this Court has personal jurisdiction over Plaintiff. See Ins. Corp. of Ireland, 456 U.S. at 703.
In any event, the purported forum selection clause, stating that disputes "shall be heard in an appropriate court of PG County, Maryland," does not vest exclusive jurisdiction in the state courts. See Mims v. Arrow Fin. Servs., LLC, 565 U.S. 368, 374, 380 (2012) (construing statutory provision that "[a] person or entity may, if otherwise permitted by the laws or rules of court of a State, bring a private action in an appropriate court of that State" and concluding that "[n]othing in th[at] permissive language . . . makes state-court jurisdiction exclusive. . . ." (emphasis added)). Indeed, under federal law,
Federal Rule of Civil Procedure 12(b)(6) provides for "the dismissal of a complaint if it fails to state a claim upon which relief can be granted." Velencia v. Drezhlo, No. RDB-12-237, 2012 WL 6562764, at *4 (D. Md. Dec. 13, 2012). This rule's purpose "is to test the sufficiency of a complaint and not to resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Id. (quoting Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006)). To that end, the Court bears in mind the requirements of Rule 8, Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009) when considering a motion to dismiss pursuant to Rule 12(b)(6). Specifically, a complaint must contain sufficient factual matter in the form of "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Additionally, the complaint must state, on its face, "a plausible claim for relief," as "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678-79. See Velencia, 2012 WL 6562764, at *4 (discussing standard from Iqbal and Twombly). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678. The plaintiff must raise a "right to relief above the speculative level" and "nudge[] [his] claims . . . across the line from conceivable to plausible." See, e.g., McCleary-Evans v. Md. Dep't of Transp., 780 F.3d 582, 587 (4th Cir. 2015) (quoting Twombly, 550 U.S. at 570).
Thai insists that Allied Fire's claims for breach of contract and breach of the noncompete and non-solicitation claims
Allied Fire, which alleged (in conclusory language) in its Complaint that the Agreement was reasonable given the "nature of Plaintiff's disclosures, industry trade secretes [sic] and Defendant['s] level of authority and responsible [sic]," Compl. ¶ 19, counters that the restrictive covenants are reasonably limited in terms of "area and duration" in a manner that is necessary to protect its "legitimate business interest," Pl.'s Opp'n 6. Additionally, Allied Fire contends that no geographical limitation is necessary because the Agreement only restricts access to its "established clients." Id. at 8-9. Alternatively, Allied Fire argues that, should any provision of the Agreement be determined to be overly broad, "blue penciling"
Restrictive covenants in employment contracts limit an individual's right to employment, and therefore they are generally viewed "with caution and read narrowly." SNS One, Inc. v. Hage, No. L-10-1592, 2011 WL 2746713, at *3 (D. Md. July 11, 2011).
Medispec, Ltd. v. Chouinard, 133 F.Supp.3d 771, 773 (D. Md. 2015) (citing Deutsche Post Global Mail, Ltd. v. Conrad, 116 Fed. App'x 435, 438 (4th Cir. 2004)); see also Mansell v. Toys R Us, Inc., 673 F.Supp.2d 407, 416 (D. Md. 2009) (noting that under Maryland law, "a covenant not to compete can may be sustained only if `the restraint is confined within limits which are no wider as to area and duration than are reasonably necessary for the protection of the business of the employer") (citing Ruhl v. Bartlett Tree Co., 225 A.2d 288, 291 (Md. 1967)). "In assessing the reasonableness of scope and duration [of a restrictive covenant], `a determination must be made based on the scope of each particular covenant itself; and, if that is not too broad on its face, the facts and circumstances of each case must be examined.'" Medispec Ltd., 133 F. Supp. 3d at 774-75 (quoting Deutsche Post, 116 Fed. App'x at 438).
It is well established that an employer has a protected interest in "preventing departing employees from taking with them the customer goodwill they helped to create for the employer." See Seneca One Finance, Inc. v. Bloshuk, 214 F.Supp.3d 457, 461 (D. Md. 2016) (quoting Deutsche Post, 116 Fed. App'x at 438). However, a restrictive covenant will be construed as overly broad if it goes beyond what is needed to safeguard the employer's legally protected interest in that goodwill. Id.
In Seneca One Finance. Inc., this Court granted a motion to dismiss a plaintiff's claims for breach of her employment contract's non-compete provision for overbreadth. 214 F.Supp.3d 457. The provision prevented prior employees from "engaging, directly or indirectly, in the same or similar business as [the employer]," language quite similar to that of the purported Agreement here. Id. at 461-62. Specifically, the non-compete clause stated:
Id. The Court held that the provision was not designed "to prevent the employees from taking advantage of customer goodwill created while employed at Seneca One," but rather "to prevent former employees from working for any competitor," which "is not a legally protected interest." Id. at 462; see also MCS Serv., Inc. v. Jones, No. WMN-10-1042, 2010 WL 3895380, at *3 (D. Md. Oct. 1, 2010) (finding provision stating defendant "shall not . . . directly or indirectly . . . be employed by . . . any other entity . . . in competition with, or similar in nature to, [MCS]" was too broad to be enforced).
Here, the non-compete and non-solicitation provisions restrict Thai from "provid[ing] or engag[ing] in any way business of a similar nature . . . to the business of the Plaintiff without written consent of the Plaintiff," or "directly or indirectly engag[ing] in any way business of a similar nature . . . with Plaintiff's former, current or future clients for Sixty (60) months after separation from Plaintiff's business," or soliciting Plaintiff's clients for a third party. Compl. ¶ 10. This language imposes a sweeping limitation on Thai's ability to obtain employment by purporting to restrict Thai's ability to engage directly or indirectly in any type of engineering, consulting or general construction business anywhere within Maryland or for that matter, the world. As in Seneca One, the non-compete provisions here are not narrowly tailored to protect customer goodwill that the employee cultivated during his employment; they prevent the employee from working for the employer's competitors. They cover not only clients who have worked or still worked with Allied Fire, but also "future clients," without any limitation whatsoever on who may qualify as a future client. According to Plaintiff, this broad scope was necessary to protect its legitimate business interests because of the extent of Thai's authority in the company and knowledge of its trade secrets. But, his insider knowledge is addressed through the non-disclosure clause (which, as noted, Thai does not specifically challenge), and Allied Fire has neither shown nor alleged how the non-compete and non-solicitation provisions are useful in accomplishing this goal or reasonable in light of the inclusion of the non-disclosure clause. Thus, the non-compete provisions and the non-solicitation provision are overbroad and unenforceable. See Seneca One, 214 F. Supp. 3d at 462; MCS Serv., 2010 WL 3895380, at *3; ImpactOffice, LLC v. Siniavsky, No. TDC-16-1851, 2016 WL 8672916 at * 5 (D. Md. Nov. 18, 2016) (finding restriction on former employee prohibiting solicitation of "prospective customers" regardless of contact with former employee overbroad).
The duration of one non-compete provision at issue is sixty months, or five years, and the other provisions do not have durational limits. Compl. 2-3. As Allied Fire paraphrased the noncompete provisions, one prohibited the employee from "[d]irectly or indirectly engage in any similar business (i.e., engineering, consulting and general construction) with Plaintiff's former, current or future clients for Sixty (60) months after separation from Plaintiff's business," while the others prohibited him from ever engaging in similar business without Plaintiff's written consent or working for Plaintiff and another company, simultaneously, and the non-solicitation provision prohibited him from ever soliciting Plaintiff's clients for a third party. Id. (emphasis added).
"[F]ive-year non-compete clauses rarely have been upheld by Maryland courts." Mansell, 673 F. Supp. 2d at 417 n.8 (concluding that "five years [was] an unreasonably long period of time to restrict future employment" because employees never formed personal relationships with clients; noting that five-year period in Holloway, 572 A.2d at 523, was unreasonable "because after three years any business with [accountant's former employer's] clients would result from his competitive efficiency and not the relationships he forged while an employee"). The Mansell Court did not identify any five-year non-compete clauses that had been upheld in Maryland, and Allied Fire cites only to state court cases in Colorado, Illinois, and Indiana (which are not binding on this Court) that upheld non-compete clauses with durations of five or more years. See Pl.'s Opp'n 8.
In Holloway and Mansell, the courts considered how much time needed to pass before any clients leaving the employer would be leaving for legitimate business reasons, rather than because they had formed a relationship with the departing employee and wanted to maintain it. Mansell, 673 F. Supp. 2d at 417 n.8; Holloway, 572 A.2d at 523. Additionally, courts consider "the facts of a particular case and the interest of the employer sought to be protected." Holloway v. Faw, Casson & Co., 572 A.2d 510, 522 (Md. 1990). Allied Fire asserts that "no one knew more about the inter-workings, strategies, business advantages and clientele outside of Plaintiff Owner than the Defendant," and "[t]herefore, the restriction on the Defendant was reasonable." Pl.'s Opp'n 8. But, given that this knowledge is the subject of the non-disclosure clause, it does not justify non-compete and non-solicitation provisions of five years or more. Allied Fire also states (albeit with regard to the geographic limitation) that "the only concern is for Plaintiff's legitimate interest in losing established clients to the Defendant because Defendant had the opportunity to get to know the clients and develop a personal relationship with them as a result of working for Plaintiff company." Pl.'s Opp'n 9. Yet, Allied Fire does not explain why five years were reasonable or necessary in its industry to ensure that clients did not leave Plaintiff because they wanted to maintain such a relationship with Thai. Moreover, as noted, the noncompete provision prohibiting Thai from engaging in similar business with Allied Fire's clients does not pertain only to "established clients"; it also covers "future clients," without any limitation whatsoever on who may qualify as a future client. Additionally, Allied Fire does not explain why the non-solicitation clause's indefinite duration is reasonable. Consequently, Allied Fire has not shown that, under the facts of this case, five years or more was a reasonable duration for the non-compete and non-solicitation provisions.
The non-compete provisions does not have any geographic limitation. Certainly, in Padco Advisors, Inc., v. Omdahl, 179 F.Supp.2d 600 (D. Md. 2002), this Court found that a non-compete provision without a geographical limitation was reasonable because it was aimed specifically at two of 100 competitors. And, in Intelus Corp. v. Barton, 7 F.Supp.2d 635 (D. Md. 1998), this Court held that a non-compete clause without any geographical limitation was valid because it limited non-competition to one of ten competitors and no undue hardship to the employee resulted. Allied Fire also cites Gill v. Computer Equip. Corp., 292 A.2d 54, 59 (Md. 1972), where "no territorial limitation [was] imposed," but the court found that "competition [was] defined, in effect, as working for customers of [one division of the employer] of the year prior to termination of employment," such that the non-compete clause pertained to a "narrow area" and "was not unreasonable," and Tuttle v. Riggs-Warfield-Roloson, 246 A.2d 588, 590-91 (Md. 1968), where the restrictive covenant "specifically reserv[ed]" one specific account to the employer. In contrast, here, as noted, the scope of the non-compete is vast and not limited to a specific group of clients, such that the same rationale for approving a non-compete clause without a geographic limit is not present.
According to Allied Fire, "[n]o geographic limitation is needed because the clause restricted only access to employer's clients" and "the only concern is for Plaintiff's legitimate interest in losing established clients to the Defendant because Defendant had the opportunity to get to know the clients and develop a personal relationship with them as a result of working for Plaintiff company." Pl.'s Opp'n 9. But, Plaintiff cannot amend its pleadings in its Opposition, see Velasquez v. Wexford Health Sources, Inc., No. PWG-16-1807, 2017 WL 4151278, at *8 (D. Md. Sept. 19, 2017), and as noted, its Complaint referred to future, as well as established, clients and does not allege a relationship between Thai and clients. Moreover, the Complaint describes non-compete provisions that limit far more than access to clients; they also limit the type of business Thai can provide without Plaintiff's written consent. Compl. 2-3. Thus, the geographic scope of the restrictive covenants is not limited by the circumstances of this case, and the absence of a geographic limitation is not reasonable.
A non-compete clause does not impose undue hardship when the former employee is allowed to perform similar work. See Allegis Group, Inc. v. Jordan, No. GLR-12-2535, 2014 WL 2612604, at *7 (D. Md. June 10, 2014) (citing Intelus, 7 F. Supp. 2d at 642). Additionally, the public has a strong interest in the enforcement of reasonable restrictive covenants in employment contracts, as they play an important role in the growing and development of businesses. See Intelus, 7 F. Supp. 2d at 642. But restrictive covenants that are "unduly restrictive of the employee's freedom" are invalid as a matter of law. See Ruhl, 225 A.2d at 293 (quoting Deuerling v. City Baking Co., 141 A. 542, 543 (Md. 1928) ("[T]he right to labor or use one's skill, talents, or experience for one's own benefit, or furnish them to another for compensation, is a natural and inherent right of the individual. . . .")). Here, the non-compete clause does not allow Thai to accept similar work; in fact, it expressly forbids doing so unless he first obtains Allied Fire's consent. Enforcing the non-compete provisions would allow Allied Fire total control over Thai's ability to make a living in any field even similar to what he did at Allied Fire, and thereby unreasonably impede his ability to work. This control would create undue hardship on Thai, which violates public policy.
Thus, the non-compete and non-solicitation provisions are unreasonable and not enforceable. But, this does not mean, that either the non-disclosure or company property clause is unreasonable, and Thai has not argued, let alone shown, that either is not reasonable. See Def.'s Mem. 4, 5-6, 8-13 (challenging the scope and duration of "[t]he non-compete and nonsolicitation provisions in the Agreement"). Because these clauses are a part of the Agreement that is, in part, unenforceable, the question becomes whether the unenforceable provisions can be stricken, such that an enforceable contract remains.
In certain cases, restrictive covenants that are overly broad can be "blue penciled" to eliminate unreasonable provisions. See Deutsche Post, 116 Fed. App'x at 439.
Holloway, 572 A.2d at 518 (quoting Restatement (First) of Contracts § 518). Thus, "[a] court can only blue pencil a restrictive covenant if the offending provision is neatly severable"; it cannot "rearrange or supplement the language of the restrictive covenant." Id.
Here, Allied Fire has not provided the Agreement or even quoted the relevant clauses verbatim. All it has done is paraphrase them. Under these circumstances, it is not possible for me to find that any part of the Agreement "is neatly severable" and blue pencil it. See id.
Consequently, Count II for breach of the non-compete and non-solicitation provisions, as well as Count I for breach of contract (and specifically, the non-disclosure and company property provisions) ARE DISMISSED. Dismissal of Count I is
To state a claim for tortious interference with contractual relations, a plaintiff must allege:
Discovery Commc'ns, LLC v. Computer Sciences Corp., 570 Fed. App'x 306, 306 (4th Cir. 2014) (quoting Fowler, 598 A.2d at 802); see Mansell, 673 F. Supp. 2d at 415-16.
Allied Fire claims that Thai "improperly pa[id] people that [he] would hire for work that was never done to obtain future favors from such individuals." Compl. ¶ 27. Even reading this paragraph in the light most favorable to Plaintiff, as I must, see Aziz, 658 F.3d at 390, Allied Fire has not alleged that it had a contract with these third parties; rather, it appears to allege that Thai contracted with third parties. And, it does not allege any breach of these contracts; its issue appears to be with the contracts' maintenance, rather than their breach. Thus, it has not stated a claim based on Thai's payments to third parties. See McIntyre v. Guild, Inc., 659 A.2d 398, 410 (Md. Ct. Spec. App. 1995) (concluding that defendant was entitled to judgment as a matter of law because there was no breach contract); 121 Assocs. Ltd. P'ship v. Tower Oaks Boulevard, LLC, No. 0906 Sept.Term 2014, 2015 WL 7076013, at *10 (Md. Ct. Spec. App. Nov. 12, 2015) (party cannot prevail on tortious interference with contract claim without proof that third party breached the contract), cert. denied sub nom. Tower Oaks Blvd. v. Ronald Cohen Invs., 136 A.3d 818 (Md. 2016).
Allied Fire also claims that Thai promised its clients "discounts and kickback[s]" that it did not authorize, "caus[ing] confusion and complication with contracts to the point where the Plaintiff had to agree to loose [sic] money in order to keep the client or simply lose the client." Id. ¶ 28. These threadbare allegations do not identify the third parties specifically, describe the incentives Thai offered them, or state what the clients did in response to the offer or Allied Fire's reluctance to honor it. Moreover, while Allied Fire vaguely alleges that Thai intentionally interfered with its client contracts, causing it to lose money and/or clients, Allied Fire does not allege that any client breached its contract with the company. Accordingly, Plaintiff fails to state a claim for tortious interference with contractual relations. See McIntyre, 659 A.2d at 410; 121 Assocs. Ltd. P'ship, 2015 WL 7076013, at *10.
To state claim for tortious interference with prospective advantage, a plaintiff must allege the following elements in its complaint:
Audio Visual Assocs., Inc. v. Sharp Elecs. Corp., 210 F.3d 254, 261 (4th Cir. 2000) (citing Alexander & Alexander, Inc. v. B. Dixon Evander & Assocs., Inc., 650 A.2d 260, 269 (Md. 1994)); see Paccar Inc. v. Elliot Wilson Capitol Trucks LLC, 905 F.Supp.2d 675, 695 (D. Md. 2012); Williams v. Wicomico Cty. Bd. of Educ., 836 F.Supp.2d 387, 389 (D. Md. 2011) (citing K & K Mgmt., Inc. v. Lee, 557 A.2d 965, 973 (Md. 1989)). The right to be free from interference with prospective economic advantage is broader than the right to be free from interference with contractual relations, as this right "exists where no contract or a contract terminable at will is involved." Oce N. Am., Inc. v. MCS Servs., Inc., 795 F.Supp.2d 337, 348 (D. Md. 2011) (citing Natural Design, Inc. v. Rouse Co., 485 A.2d 663, 674 (Md. 1984)). Wrongful or malicious interference with economic relations occurs by "conduct that is independently wrongful or unlawful, quite apart from its effect on the plaintiff's business relationships." Alexander & Alexander Inc., 650 A.2d at 271. The Maryland Court of Appeals has defined this wrongful or unlawful conduct as "wrongful or unlawful acts includ[ing] common law torts and violence or intimidation, defamation, injurious falsehood or other fraud, violation of criminal law, and the institution or threat of groundless civil suits or criminal prosecutions in bad faith." Id. (citing K & K Mgmt., 557 A.2d at 979).
Allied Fire claims that Thai intentionally diverted future business away from it, to himself or competitors, and thereby caused the employer to suffer financial loss. Compl. ¶¶ 25-26. Yet, this contention is not supported by sufficient factual allegations to render it plausible. There is no indication of what business opportunities were lost, to whom Thai "steered" the supposed business opportunities to, what improper payments or favors were exchanged between Thai and others, nor any indication of Thai's unlawful acts or malicious purpose. Consequently, Allied Fire fails to state a claim for tortious interference with prospective advantage.
Count III is dismissed without prejudice to filing an amended complaint that addresses these deficiencies, should Allied Fire have a good faith basis for doing so.
The tort of intentional misrepresentation, also referred to as fraud or deceit, requires a plaintiff make particularized allegations of the following elements to ascertain relief:
Belyakov v. Med. Sci. & Computing, 86 F.Supp.3d 430, 438 (D. Md. 2015); see Sakala v. Milunga, No. PWG-16-790, 2017 WL 2986364 at *2 (D. Md. Jul. 13, 2017); Exxon Mobil Corp. v. Albright, 71 A.3d 30, 49 (Md. 2013); Gourdine v. Crews, 955 A.2d 769, 791 (Md. 2008). Additionally, Allied Fire's fraud allegations must meet the heightened pleading standard required under Rule 9(b), which mandates a party to state "with particularity the circumstances constituting fraud. . . ." Fed. R. Civ. P. 9(b); Piotrowski v. Wells Fargo Bank, N.A., No. DKC-11-3758, 2013 WL 247549, at *5 (D. Md. Jan. 22, 2013).
Id. (citations omitted); see Spaulding v. Wells Fargo Bank, N.A., 714 F.3d 769, 781-82 (4th Cir. Apr. 19, 2013).
Allied Fire alleges that Thai committed fraud by "knowingly, willfully, and intentionally" misrepresenting his authority to "accept and handle client contract matters" when clients would call a business cell phone in Thai's possession. Compl. ¶ 30. Thus, Allied Fire claims that Thai made false representations to third parties—not to it. But, since it fails to allege that Thai made any false representations to it, and consequently it cannot realistically argue that any other element of the claim is present. Moreover, Allied Fire's vague allegations of misconduct do not satisfy the heightened pleading standard for fraud claims under Fed. R. Civ. P. 9(b). Allied Fire has failed to allege any of the required information to plead this claim (time, place, contents of misrepresentation) except the identity of the speaker. Consequently, Allied Fire has failed to plead this claim with the required particularity and has not stated a claim of intentional misrepresentation.
Count III is dismissed without prejudice to filing an amended complaint that addresses these deficiencies, should Allied Fire have a good faith basis for doing so.
In sum, for the reasons stated above, Defendant's Motion to Dismiss, ECF No. 7, IS GRANTED as follows:
Plaintiff is strongly encouraged to take note of its pleading deficiencies in the original complaint, and to address them with the amended complaint. Having been afforded an opportunity to amend, any subsequent dismissal may be with prejudice.
Accordingly, it is this
1. Defendant's Motion to Dismiss, ECF No. 7, IS GRANTED as follows:
2. If Plaintiff files an amended complaint, Defendant's response is due within twenty-one days of receipt of the amended complaint.
