UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 09-1690

TOBACCO TECHNOLOGY, INCORPORATED,

Plaintiff - Appellant,

v.

TAIGA INTERNATIONAL N.V.; THOMAS J. MASSETTI; MARIE-PAUL 

VOUTE,

Defendants - Appellees.

Appeal from the United States District Court for the District of 

Maryland, at Baltimore. Catherine C. Blake, District Judge. 

(1:06-cv-00563-CCB)

Argued: May 13, 2010 Decided: July 20, 2010

Before DUNCAN and KEENAN, Circuit Judges, and Arthur L. ALARCÓN, 

Senior Circuit Judge of the United States Court of Appeals for 

the Ninth Circuit, sitting by designation.

Affirmed by unpublished opinion. Judge Duncan wrote the 

opinion, in which Judge Keenan and Senior Judge Alarcón joined.

ARGUED: Thomas Matthew Wilson, III, TYDINGS & ROSENBERG, LLP, 

Baltimore, Maryland, for Appellant. David B. Salmons, BINGHAM & 

MCCUTCHEN, LLP, Washington, D.C., for Appellees. ON BRIEF:

Gregory M. Garrett, TYDINGS & ROSENBERG, LLP, Baltimore, 

Maryland, for Appellant. Stanley J. Reed, William A. Goldberg, 

LERCH, EARLY & BREWER, CHTD., Bethesda, Maryland, for Appellee 

Thomas J. Massetti; Boyd T. Cloern, Bryan M. Killian, BINGHAM & 
2

MCCUTCHEN, LLP, Washington, D.C., for Appellees Taiga 

International N.V. and Marie-Paul Voûte.

Unpublished opinions are not binding precedent in this circuit.
3

DUNCAN, Circuit Judge:

This appeal arises from a district court’s grant of summary 

judgment finding that the appellant’s breach of contract claims 

failed as a matter of law and that its tort-based claims of 

breach of fiduciary duties were time-barred. For the reasons 

that follow, we affirm.

I.

“Because this appeal is from an order granting summary 

judgment, we recite the facts in the light most favorable to the 

non-moving party.” Garofolo v. Donald B. Heslep Assocs., 405 

F.3d 194, 195 (4th Cir. 2005).

A.

Appellant Tobacco Technology International, Inc. (“TTI”) is 

a closely held Maryland corporation founded in the 1970s. It

manufactures and distributes flavoring ingredients for use in 

tobacco products. When its founder and president Duke CasselsSmith died in 1987, the presidency and a majority of the stock 

transferred to his widow, Jeremy Cassels-Smith (“Ms. CasselsSmith”). Because of her lack of managerial experience, Ms.

Cassels-Smith hired Ronald Whitehead (“Whitehead”) to be TTI’s 

president in 1991. Whitehead was also made a director. Ms. 
4

Cassels-Smith assumed the title of chairwoman of the board, to 

which the title of CEO was later added.

TTI’s bylaws provided that Whitehead, as president, had 

“the responsibility for the active management of the business 

and general supervision and direction of all of the affairs of 

the Corporation.” J.A. 612. The bylaws also gave Whitehead the 

express authority “to execute any documents requiring the 

signature of an executive officer.” Id. Throughout his tenure, 

Whitehead exercised this authority to enter into contracts on 

TTI’s behalf, and, as acknowledged by Ms. Cassels-Smith, did so 

without any oversight from TTI’s board of directors. By 

contrast, Ms. Cassels-Smith’s own positions conferred no 

substantive responsibilities. Her role, in her own words, was 

that of a “[n]ag” who “just wanted to be kept informed about 

everything.” J.A. 153.

Although the bylaws did not limit Whitehead’s ability to 

manage TTI’s affairs, he did sign a nondisclosure agreement that 

prohibited disclosure of its proprietary information. Part 3.B. 

of the agreement provided in part that Whitehead could not, 

without written consent of the board of directors,

disclose to others, or appropriate to his own use or 

the use of others, any confidential information of 

TTI. All information, regardless whether written, 

pertaining to TTI’s business, including, without 

limitation, information regarding customers, 

prospective customers, customer lists, costs, prices, 

pricing lists, earnings, products, product lists, 
5

formulae, research and development, compositions, 

machines, apparatus, systems, procedures, prospective 

and executed contracts and other business 

arrangements, and sources of supply are presumed to be 

confidential information of TTI for purposes of this 

Agreement.

J.A. 627 (emphasis added). Subject to the nondisclosure 

agreement, Whitehead ran TTI’s affairs until his departure in 

2003.1

Taiga is a closely held Belgian corporation formed in 1992 

with the aid of several TTI directors -- including Whitehead and 

Ms. Cassels-Smith -- who became partial owners in their 

individual capacities. Also contributing to its formation were

Thomas Massetti (“Massetti”), a fellow TTI director and the CEO 

of Craftmaster Flavor Technology, Inc. (“Craftmaster”), which

produced flavoring ingredients for food products, and his 

 He conducted the day-to-day business of the company, 

including entering into formal contracts and purchasing 

facilities, without the input of Ms. Cassels-Smith or any other 

officer or director of TTI. One of Whitehead’s responsibilities 

as president was the management of TTI’s relationship with

Appellee Taiga International, N.V. (“Taiga”).

 1 When Whitehead left TTI in March 2003, he was replaced as 

president by Ms. Cassels-Smith’s son, George Cassels-Smith 

(“George Cassels-Smith”).
6

longtime business associate, Marie-Paul Voûte (“Voûte”).2

In its first few years of operation, Taiga focused on 

distributing its food-flavoring products in conjunction with 

Craftmaster. Then, in 1996, Taiga entered into an arrangement 

with TTI for the distribution of TTI’s tobacco-flavoring 

products. This arrangement was not formalized in a written 

contract, but was informally managed by Whitehead, Massetti, and 

Voûte. Under the initial 1996 arrangement, Taiga would purchase 

TTI’s flavoring ingredients at a profit to TTI, then repackage 

the flavoring ingredients with its own finishing ingredients and 

distribute the final product in Europe as a Taiga product. 

Taiga would then make a second payment to TTI in the form of a 

percentage commission of the final sale price. Taiga could only 

sell its products in countries where TTI was not directly 

selling its own products, and Taiga was prohibited from 

producing tobacco flavoring ingredients.

Taiga’s purpose was to serve as a distributor of both 

Craftmaster’s and TTI’s products in Europe. Upon its formation, 

Massetti was appointed its president, and Voûte its general 

manager. These two individuals thereafter assumed day-to-day 

control of Taiga’s operations.

 2 Massetti and Voûte, together with Taiga, are the 

defendants in this litigation.
7

A couple of years after the 1996 initial agreement, TTI 

entered a period of financial difficulty. The difficulties 

began in 1998, when Whitehead transferred one of TTI’s flavorchemists, Brian Hawking, from the United States to Ireland, and

provided him a laboratory.3

 3 Hawking’s employment contract contained a nondisclosure 

provision identical to Whitehead’s.

 Despite the payment of substantial 

sums for Hawking’s laboratory and salary, Hawking developed no 

flavors for TTI. As described by one TTI officer and director, 

Hawking and his laboratory were “a drain on the company” that 

did not provide “any benefit for TTI.” J.A. 550. This drain 

contributed to the overall decline in TTI’s financial health 

between 1998 and 2000. Notes from an April 1999 TTI board 

meeting state that “the cash flow for 1998 and 1999 is tight.” 

J.A. 690. Also, from 1999 to 2000, TTI’s pre-tax profits fell 

from a $677,000 gain to a $17,000 loss. During that same 

period, TTI borrowed over a million dollars from Massetti and 

Whitehead, and also came within forty-eight hours of declaring 

bankruptcy before being rescued by an influx of private capital

from other directors. Although George Cassels-Smith was later 

to opine that TTI’s financial position during this time was 

“beautiful,” J.A. 356, Ms. Cassels-Smith acknowledged these

financial difficulties, stating that TTI was “losing business 
8

hand over fist,” J.A. 186, was “constantly borrowing from Peter 

to pay Paul,” J.A. 189, and was “going downhill in a toboggan,” 

J.A. 269. Other TTI officers and directors echoed this view.4

While TTI was experiencing financial troubles, Whitehead 

sought to negotiate changes to TTI’s 1996 initial agreement with 

Taiga. These efforts occurred on two separate occasions.

 

5

First, in February 2000, Whitehead agreed with Massetti and 

Voûte to several modifications to the arrangement. We will 

refer to this revised agreement as the “Proposed Agreement.”6

 4 For example, Thomas Cravotta, who was a Vice President of 

TTI in 1998, admitted that “in the period around 2000 TTI was 

experiencing financial difficulties.” J.A. 551. Massetti 

further noted that as of August 2000, TTI was “in serious 

financial trouble.” J.A. 290. 

 

Under the Proposed Agreement, Taiga could develop its own 

flavors for use in finished tobacco products and market those 

products in European countries where TTI was selling its own 

products directly. In exchange, Taiga would continue to 

purchase TTI’s flavoring ingredients and pay commissions on 

them. The three individuals further agreed to change the method 

5 Like the 1996 initial agreement, these modifications were 

not formalized in written contracts.

6 TTI has dubbed this agreement the “London Proposal,” 

presumably because Whitehead met with Massetti and Voute in 

London to discuss it. For ease of reference, however, we have 

adopted the district court’s terminology.
9

for calculating the commissions that Taiga would pay to TTI. 

Under the Proposed Agreement, Taiga would pay TTI only for the 

raw cost of TTI’s flavoring ingredients if the final Taiga 

product comprised more than 30 percent of TTI’s ingredients. If 

the final product comprised less than 30 percent of TTI’s 

flavoring ingredients, Taiga continued to pay TTI a percentage 

commission.

Whitehead informed the Cassels-Smiths of the terms of the 

Proposed Agreement. Recognizing that Whitehead had the 

authority to negotiate on behalf of TTI, Ms. Cassels-Smith 

agreed to its terms. She told Whitehead, however, that she 

wanted George Cassels-Smith to be a part of any further 

decisions on TTI’s behalf regarding the arrangement with Taiga.7

Despite Ms. Cassels-Smith’s request, Whitehead proceeded

alone in August 2000 to finalize the agreement with Massetti and 

Voûte. The “Final Agreement” adopted the modifications agreed 

upon in the Proposed Agreement and added two additional

components.

 

8

 7 The record is unclear as to the position George CasselsSmith held during the year 2000.

 First, Whitehead agreed to allocate Hawking to 

Taiga to develop flavors. In exchange, Taiga would assume TTI’s 

8 TTI refers to the Final Agreement as the “2000 

Transaction.” Again, we adopt the district court’s terminology.
10

financial responsibility for Hawking’s laboratory and associated 

costs, and would gradually supply Hawking independent 

compensation as TTI concomitantly reduced his salary. Taiga 

would continue to purchase TTI products and would pay 

commissions to TTI on all products containing either a TTI 

flavor or a Taiga flavor developed by Hawking. Second, 

Whitehead agreed to another change to the methodology for 

computing TTI’s commissions. Whereas previously the commission 

was based on the final sale price of the Taiga product, now it 

would be based on the percentage of TTI materials incorporated

into the product.9

After the Final Agreement was reached, Hawking created

sixty-nine new flavors for Taiga. Taiga paid TTI commissions on 

 9 This new arrangement created more variability in the 

amount that TTI could expect to profit on commissions. As the 

district court explained,

Under the previous arrangement, if a Taiga flavor sold 

for $100, and TTI received a 15% commission on the 

sale price, TTI would receive $15 for that sale. 

Under the new arrangement, TTI would only receive its 

commission from the portion of that $100 that accounts 

for raw material costs. Raw materials in a Taiga 

flavor may account for anywhere from 5% to 70% of the 

flavors selling price. 

Tobacco Tech., Inc. v. Taiga Int’l N.V., 626 F. Supp. 2d 537, 

544 n.13 (D. Md. 2009). Accordingly, TTI could receive 15 

percent of anywhere from 5 to 70 percent of the sale price --

here, from ¢75 to $10.50. Id.
11

these flavors, and also paid TTI for the expenses associated 

with Hawking’s laboratory. 

In March 2003, George Cassels-Smith became president of 

TTI. In March 2005, Taiga informed TTI that it was ending their

relationship. Taiga then attempted to remit a payment to TTI

for TTI’s flavoring ingredients, which Taiga computed under the 

terms of the Final Agreement. TTI objected to this payment, 

arguing that under the terms of the agreement it believed to 

control the relationship, the Proposed Agreement, Taiga had not 

paid enough. Taiga responded that the Final Agreement 

controlled the relationship, not the Proposed Agreement, and 

that its payment was correctly calculated. TTI then claimed 

that it had never heard of the Final Agreement and that it was 

invalid. After an unsuccessful effort to resolve the

differences over which agreement controlled, TTI commenced the 

present litigation.

B.

In March 2006, TTI filed a five-count complaint against 

Taiga, Massetti, and Voûte in the United States District Court 

for the District of Maryland. In Count I, TTI alleged a breach 

of contract by Taiga, in that Taiga had failed to abide by the 

terms of the controlling agreement between the parties, the 

Proposed Agreement. In Count II, TTI alleged a breach of a 
12

fiduciary duty by Taiga, in that Taiga had failed to disclose 

the existence of the Final Agreement to TTI. In Count III, TTI

alleged a breach of a director’s duty by Massetti, for failing 

to disclose the existence of the Final Agreement to TTI while 

serving as a TTI director. In Count IV, TTI alleged that Taiga 

and Voûte aided and abetted Massetti’s breach of fiduciary 

duties. In Count V, TTI alleged a misappropriation of trade 

secrets by Taiga and Voûte, by obtaining and using flavors that 

Hawking developed after the Final Agreement. TTI thereafter 

filed an amended complaint adding a Count VI, in which it sought 

a declaration that the Final Agreement was invalid. 

The defendants filed two summary judgment motions, one by 

Massetti and one by Taiga and Voûte, challenging all counts. 

Ultimately, the district court granted defendants’ motions. 

First, the district court rejected TTI’s argument that the Final 

Agreement was invalid and therefore could not control the 

relationship between TTI and Taiga. The district court 

disagreed with TTI that Whitehead either lacked the authority as 

TTI’s agent to enter into the Final Agreement, or that it was 

not saved from being void or voidable under Maryland’s 

Interested-Director Statute, Md. Code Ann., Corps. & Ass’ns § 2-

419. Consequently, the district court found Counts I and VI 
13

failed as a matter of law, as well as components of Counts II 

and III.10

As to TTI’s tort claims, the district court determined that 

they had not been timely filed, and were thus barred. In doing 

so, the district court rejected TTI’s argument that the 

limitations period was tolled because Whitehead’s knowledge of 

the Final Agreement could not be imputed to it. Accordingly, 

the district court granted summary judgment to Taiga, Massetti, 

and Voûte on all claims. 

TTI now appeals, challenging the district court’s 

determinations on Counts II through VI.

II.

We “review[] a district court’s decision to grant summary 

judgment de novo, applying the same legal standards as the 

district court.” Pueschel v. Peters, 577 F.3d 558, 563 (4th 

 10 Count II alleges that Taiga breached fiduciary duties to 

TTI, and states three different claims of breach. First among 

these is that Taiga “fail[ed] to disclose and actively 

conceal[ed]” the breach of the Proposed Agreement. J.A. 79. 

Similarly, in Count III, TTI alleges that Massetti breached his 

fiduciary duties to TTI, and states nine different claims for 

breach. First among these is that Massetti “fail[ed] to 

disclose the breaches of contract” by not telling TTI that Taiga 

was operating under the terms of the allegedly invalid Final 

Agreement. J.A. 81. Upon finding that the Final Agreement was 

valid, the district court found that these claims failed along 

with the contract claims in Counts I and VI.
14

Cir. 2009). “Summary judgment is appropriate ‘if the pleadings, 

the discovery and disclosure materials on file, and any 

affidavits show that there is no genuine issue as to any 

material fact and that the movant is entitled to judgment as a 

matter of law.’” Equal Rights Ctr. v. Niles Bolton Assocs., 602 

F.3d 597, 600 (4th Cir. 2010) (quoting Fed. R. Civ. P. 56(c)). 

When a case involves our diversity jurisdiction, we apply the 

law that would have been applied by the state court in the state 

where the district court sits. Volvo Constr. Equip. N. Am., 

Inc. v. CLM Equip. Co., Inc., 386 F.3d 581, 599-600 (4th Cir. 

2004). Neither party disputes that Maryland’s substantive law 

controls, so we apply it here. See Am. Hot Rod Ass’n, Inc. v. 

Carrier, 500 F.2d 1269, 1277 n.5 (4th Cir. 1974) (declining to 

apply substantive law other than that of the state in which the 

district court sat, because no argument for applying different 

substantive law was made to the district court).

III.

On appeal, TTI challenges each of the district court’s 

determinations: that the Final Agreement controlled the 

relationship between TTI and Taiga, and that the remaining tort 

claims are time-barred. We address both arguments below.
15

A.

We begin with TTI’s contention that the district court 

erred by determining that the Final Agreement controls the 

relationship between TTI and Taiga. TTI advances alternative 

arguments in this regard. First, it contends that the Final 

Agreement is invalid because Whitehead lacked authority to agree 

to it on TTI’s behalf. Second, TTI contends that the Final 

Agreement is an interested-director transaction that cannot be 

saved from being void or voidable by the statutory safe harbor 

provided in Maryland’s interested-director statute, Md. Code. 

Ann., Corps. & Ass’ns § 2-419(b)(2). 

1.

We first address the question of Whitehead’s authority to 

bind TTI in the Final Agreement. Under Maryland law, “[a]n 

agent’s authority to act must come from the principal.”

Progressive Cas. Ins. Co. v. Ehrhardt, 518 A.2d 151, 155 (Md. 

Ct. Spec. App. 1986). “[T]he authority conferred upon the agent 

by the principal can take two forms: actual authority or 

apparent authority.” Id. A person can be deemed an agent based 
16

on either.11

“Actual authority is that which is actually granted by the 

principal to the agent, and it may be express or implied.” Homa 

v. Friendly Mobile Manor, 612 A.2d 322, 333 (Md. Ct. Spec. App.

1992). Express authority is conferred by an “express 

appointment and acceptance thereof.” Med. Mut. Liab. Ins. Soc’y 

of Md. v. Mut. Fire, Marine & Inland Ins. Co., 379 A.2d 739 (Md. 

App. 1977). Implied authority is derived “from the words and 

conduct of the parties and the circumstances.” Id. 

Jackson v. 2109 Brandywine, LLC, 952 A.2d 304, 322 

(Md. Ct. Spec. App. 2008). 

We begin with express authority. As a general matter, 

Whitehead enjoyed a broad grant of express authority under TTI’s 

bylaws, which gave him “the responsibility for the active 

management of the business and general supervision and direction 

of all of the affairs of the Corporation.” J.A. 612. Moreover, 

the bylaws gave Whitehead the “express authority to execute on 

TTI’s behalf any documents requiring the signature of an 

executive officer.” Id. Throughout his tenure, Whitehead 

 11 TTI argues that Whitehead lacked both actual and apparent 

authority. As we have said, a person can be deemed an agent 

based on either form. Jackson, 952 A.2d at 322. Because TTI 

fails to demonstrate that Whitehead lacked actual authority --

in either express or implied form -- we do not reach its 

argument regarding Whitehead’s apparent authority.
17

exercised this authority to enter into contracts on behalf of 

TTI. As Ms. Cassels-Smith acknowledged, Whitehead was able to 

do so without needing any approval from its board of directors. 

Perhaps for these reasons, TTI does not argue that Whitehead 

lacked authority to agree to the Final Agreement because he had 

no power to form agreements on his own. Rather, TTI makes a 

narrower argument, contending that Whitehead exceeded the scope 

of his express authority because he contravened the scope of his 

nondisclosure agreement, which delimited his express authority 

in a key respect. Specifically, TTI argues that by agreeing to 

have Hawking produce flavors for Taiga while Hawking remained on 

TTI’s payroll, Whitehead disclosed TTI’s “trade secrets” in 

contravention of his nondisclosure agreement’s prohibition that 

he not disclose TTI’s “confidential information” without its 

written consent. J.A. 627. As a necessary threshold premise to 

this argument, TTI contends that all flavors developed by 

Hawking while he remained on its payroll were its own trade 

secrets. We do not agree with this premise.

In Maryland, the law of trade secrets gives a person a 

property interest in his trade secret. See Alleco, Inc. v. 

Harry & Jeanette Weinberg Found., Inc., 639 A.2d 173, 180 (Md. 

Ct. Spec. App. 1994) (noting that “confidential business 

information constitutes property of the company and . . . its 

premature and improper disclosure can constitute a 
18

misappropriation of corporate property); see also Carpenter v. 

United States, 484 U.S. 19, 26 (1987) (“Confidential information 

acquired or compiled by a corporation in the course and conduct 

of its business is a species of property to which the 

corporation has the exclusive right and benefit.” (internal 

quotations omitted)). The interest is in “information” that 

“derives independent economic value, actual or potential, from 

not being generally known to, and not being readily 

ascertainable by, other persons who can obtain economic value 

from its disclosure or use” and “[i]s the subject of efforts 

that are reasonable under the circumstances to maintain its 

secrecy.” LeJeune v. Coin Acceptors, Inc., 849 A.2d 451, 459 

(Md. 2004) (quoting Md. Code Ann., Comm. Law § 11-1201(e)). The 

subject matter of a trade secret

may be an industrial secret like a secret machine, 

process, or formula, or it may be industrial know-how 

(an increasingly important ancillary of patented 

inventions); it may be information of any sort; it may 

be an idea of a scientific nature, or of a literary 

nature or it may be a slogan or suggestion for a 

method of advertising; lastly, the subject-matter may 

be the product of work, or expenditure of money, or of 

trial and error, or the expenditure of time.

Bond v. Polycycle, Inc., 732 A.2d 970, 973 (Md. Ct. Spec. App.

1999) (internal quotations omitted).

As an initial point, TTI is correct that Whitehead’s 

nondisclosure agreement placed a limit on his general 

contracting authority by prohibiting him from disclosing 
19

information that would constitute its trade secrets. The 

nondisclosure agreement prevented Whitehead from disclosing 

“confidential information,” which is defined as “[a]ll 

information, regardless whether written, pertaining to TTI’s 

business, including, without limitation, information regarding 

customers, prospective customers, customer lists, costs, prices, 

pricing lists, earnings, products, product lists, formulae, 

research and development, compositions, machines, apparatus, 

systems, procedures, prospective and executed contracts and 

other business arrangements, and sources of supply . . . .” 

J.A. 627. The issue, however, is whether Whitehead disclosed 

any information that could constitute a trade secret in the 

Final Agreement. As we explain, he did not.

Under Maryland law, for Whitehead to have bargained away 

TTI’s trade secrets, he must have bargained away TTI’s property,

in the form of information worthy of concealment from 

competitors that TTI had developed and possessed. LeJeune, 849 

A.2d at 459. While the information in question could be defined 

quite broadly, see Bond, 732 A.2d at 973, it must have been 

possible for TTI to withhold it. Yet, TTI concedes that Hawking 

had not developed any flavors at the time of the Final 

Agreement. Further, TTI does not contend that the sixty-nine 

flavors at issue were “products” or “formulae” that existed as 

ideas in Hawking’s mind at the time of the Final Agreement. See
20

Oral Arg. Tr. (“The asset that was given away was flavors that 

had yet to be developed . . . . There was no agreement to give 

away flavors that had been developed prior to that time.”). 

Accordingly, it is undisputed that these flavors did not exist 

in any form, written or unwritten, when Whitehead agreed to the 

Final Agreement. While true that TTI employed Hawking for the 

purpose of developing flavors, trade secrets-law could only 

protect the flavors that Hawking had developed for TTI -- to any 

extent -- at the time of the Final Agreement. See Alleco, 639 

A.2d at 180; see also Carpenter, 484 U.S. at 26. As Hawking had 

created nothing for TTI while working in Ireland prior to the 

Final Agreement, there were no trade secrets for Whitehead to 

bargain away.12

We now consider implied authority. Here, we have little 

difficulty disposing of TTI’s argument, for it is essentially a 

 Thus, we find that TTI has failed to show that 

Whitehead lacked express authority to enter into the Final 

Agreement.

 12 TTI raises a secondary argument that Whitehead breached 

his nondisclosure agreement because he suborned Hawking to 

violate Hawking’s own nondisclosure agreement. For the reasons 

we have provided, Whitehead did not. Hawking was not compelled 

by the Final Agreement to give Taiga any secrets that he 

possessed in the form of research or development of any flavors. 

Rather, he was allocated to Taiga for the purpose of creating 

new as-yet-to-be-created flavors for them. Whatever concerns 

may have been raised by this allocation, they did not implicate 

the misappropriation of trade secrets.
21

recasting of the argument against Whitehead’s express authority. 

TTI’s argument on this point relies on the case of Bortner v. 

J.C. Leib Co., Inc., where the Maryland Court of Appeals held 

that an agent who gives away the principal’s property engages in 

an “extraordinary transaction” that exceeds the scope of the 

agent’s implied authority. 126 A. 890, 896 (Md. 1924). Here, 

TTI contends that Whitehead similarly engaged in an 

extraordinary transaction because he bargained away its trade 

secrets. We are not persuaded.

Assuming without deciding that an agent who bargains away 

his principal’s trade secrets engages in an extraordinary 

transaction, TTI has failed to demonstrate that Whitehead 

bargained away trade secrets here, for reasons already 

discussed. Instead, TTI has put forward a circular argument: it 

contends that the sixty-nine flavors Hawking developed are its 

own trade secrets because the Final Agreement is void as an 

extraordinary transaction, but then argues that the Final 

Agreement is extraordinary because it provided Taiga with TTI’s 

trade secrets. In this, TTI again presumes an answer to the 

threshold question whether Whitehead bargained away trade 

secrets when he agreed to have Hawking develop flavors for 

Taiga. As he did not, there is no basis to believe the Final 

Agreement is an extraordinary transaction. 
22

Accordingly, we find that TTI has failed to show that 

Whitehead lacked actual authority to act as TTI’s agent when he 

agreed to the terms of the Final Agreement.

2.

We next address whether Maryland’s interested-director 

statute, Md. Code Ann., Corps & Ass’ns § 2-419(b), applies to 

the Final Agreement. This statute creates a safe harbor 

provision under which a transaction entered into by a director 

who has a conflict of interest is not void or voidable if “the 

contract or transaction is fair and reasonable.” Id. § 2-

419(b)(2). It is undisputed that Whitehead had a conflict of 

interest because he was a director of both TTI and Taiga when he 

agreed to the Final Agreement. Accordingly, the only issue is 

whether the Final Agreement is fair and reasonable.13

 13 TTI also argues that the Final Agreement is void or 

voidable because, despite his conflict of interest, Whitehead 

took steps to prevent TTI’s other directors from learning of the 

Final Agreement when he ignored Ms. Cassels-Smith’s request that 

George Cassels-Smith be included in any discussions with Taiga 

after the Proposed Agreement. This argument invokes the other 

provision of section 2-419(b), which provides that an 

interested-director transaction is not void or voidable if the 

board of directors is informed of the transaction and ratifies 

it. Whatever the merit of this contention may be, it is 

irrelevant to our determination.

 TTI 

Section 2-419(b) provides two statutory safe harbors for 

interested-director transactions. Under section 2-419(b)(1), a 

(Continued)
23

contends that it was not because Whitehead allowed Taiga to 

obtain intellectual property worth millions of dollars, as well 

as broader distribution powers, in exchange for unneeded 

assistance for Hawking and a new method of calculating 

commissions that provided TTI little remuneration.14

Under section 2-419(b)(2), an agreement is “fair” if the 

terms are “within the range that might have been agreed to by 

economically motivated disinterested persons negotiating at 

arms’ length with knowledge of all material facts known to any 

party to the transaction.” Indep. Distribs., Inc. v. Katz, 637 

 We find 

this argument unpersuasive.

 

transaction involving a conflict of interest is not void or 

voidable if the fact of common directorship or interest is 

disclosed or known to the board of directors and the board 

ratifies the contract or transaction. See Md. Code Ann., Corps 

& Ass’ns §§ 2-419(b)(1) and b(1)(i). Under section 2-419(b)(2), 

such a transaction is not void or voidable if, by its terms, it 

is fair and reasonable to the corporation. These two safe 

harbors are disjunctive, which is probably why the district 

court assumed the former provision could not apply and held 

exclusively on the latter. See Tobacco Tech., 626 F. Supp. 2d 

at 550. We agree with the district court: regardless of any 

merit to an argument under section 2-419(b)(1), the transaction 

is not void or voidable if it satisfies section 2-419(b)(2). As 

we confine our analysis to the latter provision, and find that 

the Final Agreement satisfies its terms, we do not consider the 

former.

14 TTI also renews its argument that Whitehead bargained 

away its trade secrets. Nothing more need be said about this 

contention.
24

A.2d 886, 893 (Md. Ct. Spec. App. 1994) (internal quotations and 

citation omitted). The agreement is “reasonable,” if “it makes 

sense” for the corporation to have entered into it. Id. Based 

on the undisputed facts, the Final Agreement is both fair and 

reasonable.

First, the terms of the Final Agreement are fair to TTI. 

TTI allocated Hawking to Taiga, and in exchange Taiga agreed to 

pay TTI for Hawking’s laboratory and promised to take on his 

salary obligation gradually. TTI also agreed to a method of 

calculating commissions that provided less predictability in 

terms of how much income it would receive, but for which the 

pool that commissions could be collected from had been expanded 

both to include products containing TTI’s flavors -- which Taiga 

promised to keep buying -- and Taiga’s flavors, as well as to 

draw commissions from the larger pool of European countries

where Taiga would now sell flavors. In light of the 

considerations provided by the parties, we cannot say the terms 

are outside “the range that might have been agreed to by 

economically motivated disinterested persons negotiating at 

arms’ length with knowledge of all material facts known to any 

party to the transaction.” Id.

Second, in light of TTI’s financial circumstances at that 

time, it was reasonable for Whitehead to agree to the Final 

Agreement. Ms. Cassels-Smith conceded that at the time of the 
25

Final Agreement, TTI was “losing business hand over fist.” J.A. 

186. Other directors similarly admitted that the firm was in 

bad financial shape. These characterizations are confirmed by 

the fact that TTI completely lost its profitability from 1999 to 

2000, and came within forty-eight hours of declaring bankruptcy 

despite borrowing over a million dollars from its own directors, 

Massetti and Whitehead.15

 15 George Cassels-Smith testified to the contrary, 

suggesting that TTI’s financial position at the time of the 

Final Agreement was “beautiful.” J.A 356. TTI argues that in 

light of this statement, a genuine issue of material fact as to 

TTI’s financial position exists. George Cassels-Smith’s 

testimony, however, is contrary to the record evidence. For 

instance, TTI’s corporate board minutes from April 1999 state 

that “the cash flow for 1998 and 1999 [was] tight.” J.A. 690. 

Moreover, every other TTI director to testify on this issue, 

including Ms. Cassels-Smith, acknowledged the company’s 

financial problems. In light of these facts, we agree with the 

district court that no genuine issue of material fact existed as 

to TTI’s financial position during this period. George CasselsSmith’s opinion, unsupported by the record, is insufficient to 

defeat summary judgment. See Francis v. Booz, Allen & Hamilton, 

Inc., 452 F.3d 299, 308 (4th Cir. 2006) (“Mere unsupported 

speculation is not sufficient to defeat a summary judgment 

motion if the undisputed evidence indicates that the other party 

should win as a matter of law.”). 

 During this period, TTI held complete 

financial responsibility for Hawking, which by TTI’s concession 

created a “drain on the company.” J.A. 550. In the face of 

these difficulties, Whitehead negotiated a deal with Massetti 

and Voûte that gave TTI the chance to obtain commissions from a 
26

broader array of countries and from a larger number of products 

sold by Taiga, and that alleviated the strain of paying for 

Hawking while still obtaining a benefit from his work. Given 

the financial difficulties that TTI faced during this time, it 

“ma[de] sense” for Whitehead to have agreed to the Final 

Agreement. Katz, 637 A.2d at 893.

Accordingly, because the undisputed facts reflect that the 

Final Agreement was both fair and reasonable, we find that the 

safe harbor of section 2-419(b) applies to the circumstances in 

this case and the Agreement is therefore not void or voidable. 

TTI has thus failed to demonstrate that the district court erred 

when finding the Final Agreement to be binding.

B.

We now turn to the final issue, whether the district court 

erred in finding the balance of TTI’s tort-based claims barred 

by the applicable three-year statute of limitations, Md. Code 

Ann., Cts & Jud. Proc. § 5-101. TTI concedes that the viability 

of its remaining claims turns on whether the statute of 

limitations is tolled, but contends that it should have been. 

We disagree.

Under Maryland’s “discovery rule,” a statute of limitations 

begins to run when the plaintiff “kn[ows] or reasonably should 

have known of the wrong.” Poffenberger v. Risser, 431 A.2d 677, 
27

680 (Md. 1981). Maryland follows the traditional rule that, as 

between a principal and agent, it is presumed that a principal 

is charged with the agent’s knowledge. Martin Marietta Corp. v. 

Gould, Inc., 70 F.3d 768, 771 (4th Cir. 1995). However, under 

the “adverse interest exception” to this rule, a principal may 

“avoid imputation when the agent’s interests are sufficiently 

adverse” to its own. Id. at 771-72. To make out this 

exception, the principal bears the burden of showing that “the

agent [has] totally abandoned the principal’s interest and [is] 

acting for his own purposes or those of another. In other 

words, the interests of the agent must be completely adverse to 

those of his principal.” Id. at 773. This is because if the 

agent is acting both for himself and the principal, “the agent 

is acting within the scope of the agency relationship, and it is 

reasonable to assume that the agent will communicate the 

knowledge to his principal.” Id.

We have just held that the Final Agreement was a fair and 

reasonable transaction for TTI. For the same reasons, we are 

constrained to find that TTI cannot meet its burden to show that 

the adverse interest exception applies in this case. Even were 

we to assume that Whitehead held some interest other than TTI’s 

when he bargained for the Final Agreement, nevertheless he 

negotiated an agreement that made sense for TTI, particularly at 

the time. As a result, TTI cannot show that Whitehead acted 
28

with “complete adversity” to its own interests, and so is 

“chargeable with [Whitehead’s] knowledge.” Id. at 773. TTI’s 

tort claims are therefore time-barred.

IV.

For the foregoing reasons, TTI’s contract claims fail as a 

matter of law, and its tort claims are barred by the statute of 

limitations. The judgment of the district court is

AFFIRMED.