UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 12-2001

MEDICINE SHOPPE INTERNATIONAL, INCORPORATED,

Plaintiff - Appellant,

v.

MOHAMMED A. SIDDIQUI; LOCH RAVEN PHARMACY INCORPORATED; 

BELVEDERE ENTERPRISES INCORPORATED,

Defendants - Appellees.

Appeal from the United States District Court for the District of 

Maryland, at Baltimore. James K. Bredar, District Judge. 

(1:10-cv-01023-JKB)

Argued: September 19, 2013 Decided: November 5, 2013

Before DUNCAN and THACKER, Circuit Judges, and Gina M. GROH, 

United States District Judge for the Northern District of West 

Virginia, sitting by designation.

Vacated and remanded by unpublished per curiam opinion.

ARGUED: Stephen Jerome O'Brien, DENTONS US LLP, St. Louis, 

Missouri, for Appellant. David Michael Silbiger, SILBIGER & 

SILBIGER, Baltimore, Maryland, for Appellees. ON BRIEF: David 

I. Ackerman, DENTONS US LLP, Washington, D.C., for Appellant. 

Mark R. Millstein, Baltimore, Maryland, for Appellees.

Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM: 

Medicine Shoppe International, Inc. (“MSI”) appeals the

district court’s order granting summary judgment in favor of 

Appellees finding that the parties entered into a binding and 

effective settlement agreement that disposed of the case. For 

the following reasons, we vacate and remand. 

I.

MSI is a national franchisor that grants licenses to 

franchisees to operate prescription pharmacies known as the

“Medicine Shoppe System.” In exchange for the franchise, MSI 

receives license fees from its licensees based on a percentage 

of each pharmacy’s monthly gross receipts. Appellees, Mohammed 

A. Siddiqui, Loch Raven Pharmacy Inc., and Belvedere Enterprises 

Inc., purchased two Medicine Shoppe Pharmacies from a former 

franchisee, Anwar Yousuf and his corporations, Drugsmart, Inc. 

(“Drugsmart”) and Drugsmart Enterprises, Inc. (“Drugsmart 

Enterprises”). Yousuf and Noreen Anwar were the only 

shareholders of Drugsmart and Drugsmart Enterprises. 

On February 25, 2001, Drugsmart and MSI entered into a 

licensing agreement. Drugsmart agreed to operate a Medicine 

Shoppe Pharmacy located at 6307 York Road in Baltimore, 

Maryland. On May 20, 2003, Drugsmart and MSI entered into a 

second licensing agreement, and Drugsmart agreed to operate a 
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second Medicine Shoppe Pharmacy located at 1724 E. Northern 

Parkway in Baltimore, Maryland. In exchange for the licenses to 

operate the pharmacies, MSI obtained a security interest in 

Drugsmart’s prescription files.

On or about May 2004, Yousuf incorporated Drugsmart 

Enterprises. Drugsmart Enterprises began operating the Parkway 

Medicine Shoppe, and on October 14, 2004, MSI entered into a 

security agreement with Drugsmart Enterprises. Under the 

security agreement, MSI extended Drugsmart Enterprises a 

$160,000 line of credit. In exchange, MSI received a security 

interest in the Parkway Medicine Shoppe’s equipment, fixtures, 

inventory, accounts receivable, prescription files, customer 

lists, and goodwill.

By March 1, 2010, the two pharmacies owed a substantial sum 

of money to MSI. MSI terminated the franchise agreements and 

gave the franchisees until March 31, 2010 to satisfy their 

outstanding obligations, de-identify, and close the stores. On 

March 30, 2010, Yousuf notified MSI that he intended to transfer 

the pharmacies to Siddiqui. Then, Yousuf transferred the 

pharmacies to Siddiqui without MSI’s permission, and Siddiqui 

and his two corporations, Loch Raven Pharmacy and Belvedere 

Enterprises, began operating the pharmacies. Despite the 

transfer of the pharmacies, Yousuf continued to work as 

Siddiqui’s employee. 
4

In April 2010, as a result of these events, MSI filed this 

lawsuit against Siddiqui. In November 2010, MSI filed an 

amended complaint adding as defendants the corporations 

controlled by Siddiqui, Loch Raven Pharmacy and Belvedere 

Enterprises. In an effort to resolve the litigation, the 

parties drafted a Settlement and Release Agreement (“Settlement 

Agreement”). The Settlement Agreement provided, in part, that 

Siddiqui and the corporations agreed “to convert the Pharmacies 

to Medicap Pharmacies, Inc. (“MPI”) franchises and to execute a 

Medicap Pharmacy Franchise Agreement for each of the 

Pharmacies,” with each agreement lasting for three years. J.A. 

410. 

The Settlement Agreement contained two provisions with 

certain condition precedent language. First, Paragraph 4.C of 

the Settlement Agreement provided:

[u]pon execution of this Agreement and all necessary 

documents to effectuate conversion of the Pharmacies 

to MPI franchisees, MSI, its affiliates, successors 

and/or assigns will release, discharge and hold 

Siddiqui and the Companies, their affiliates, 

successors and/or assigns, harmless from each and 

every claim relating to the Dispute, whether known or 

unknown, that MSI may have against Siddiqui and the 

Companies as of the Effective Date. 

J.A. 411. Second, Paragraph 4.E stated, “[u]pon receipt of the 

executed franchise documents discussed above, MSI agrees to 

cause its claims within the Litigation to be dismissed with 

prejudice[.]” Id.
5

On or about June 17, 2011, Siddiqui signed the Settlement 

Agreement for himself and the corporations. On July 5, 2011, 

MSI signed the Settlement Agreement. However, after the 

execution of the Settlement Agreement, Siddiqui failed to sign 

the franchise documents, personal guaranties, documents relating 

to purchasing inventory from Cardinal Health, Inc., and other 

related documents. 

On July 7, 2011, Siddiqui and Yousuf entered into two bills 

of sale purportedly transferring Siddiqui’s one hundred percent

interest in the two corporations to Yousuf. Each bill of sale 

provided that:

[t]he Buyer expressly understands and acknowledges 

that the liabilities associated with the said 

corporation[s] . . . including the personal 

guarantees provided by the Seller on such liabilities 

shall be discharged fully and completely by the buyer 

prior to the execution of this Bill of Sale.

J.A. 414-421. Yousuf did not discharge all liabilities fully 

and completely prior to the execution of each bill of sale. 

Additionally, MSI had no knowledge of these transactions.

On July 21, 2011, Appellees’ counsel informed MSI’s counsel 

that Siddiqui had died. On July 26, 2011, Appellees’ counsel emailed and faxed to MSI the signature pages of some of the 

franchise documents and personal guaranties. Yousuf had 

executed the documents on behalf of Loch Raven Pharmacy and 

Belvedere Enterprises as “President” of the corporations.
6

On July 27, 2011, the parties filed a Joint Status Report 

with the district court. The parties reported that Siddiqui 

“died sometime after signing a settlement agreement but before 

executing other documents necessary to carry out the terms of 

the settlement. The parties now disagree over the status of 

this matter.” J.A. 389. In light of the joint status report, 

the district court ordered the parties to conduct discovery 

regarding two issues: (1) the ownership of the corporations and 

the assets of Siddiqui’s estate and (2) the enforceability of 

the Settlement Agreement signed by Siddiqui shortly before his 

death. 

On October 13, 2011, the district court held a status 

hearing and subsequently referred the matter to a United States 

Magistrate Judge to conduct a settlement conference. The 

parties’ negotiations with the magistrate judge were 

unsuccessful in resolving the case. Therefore, on April 18, 

2012, the district court ordered the parties to submit briefs on 

whether or not the executed Settlement Agreement resolved the 

case and set a hearing in the matter.

On May 29, 2012, the district court held a hearing 

addressing the question of whether a settlement existed in the 

case. At this hearing, the court held the Settlement Agreement 

resulted in a full and effective settlement that resolved the 

dispute. Subsequently, in a two-page order, the district court
7

found the Settlement Agreement to be valid and enforceable. 

Specifically, the district court found that the Settlement 

Agreement was binding and effective because it was duly 

executed, “evince[d] a meeting of the minds and mutual consent 

among parties with capacity,” and had consideration on both 

sides. J.A. 674. Then, the district court ordered the parties 

to submit simultaneous briefs in ten days on whether judgment 

should be entered dismissing the litigation. 

After reviewing the briefs, the district court entered a 

one-page order dismissing Appellant’s claims in favor of the 

Appellees’ Motion for Summary Judgment. J.A. 676. In its 

memorandum, the court concluded “the settlement agreement 

end[ed] the reason for this litigation.” J.A. 672.

MSI now appeals, arguing that the district court erred by 

granting summary judgment because material issues of fact exist.

II.

We review a district court’s order granting summary 

judgment de novo. Washington Metro. Area. Transit Auth. v. 

Potomac Inv. Props., Inc., 476 F.3d 231, 234 (4th Cir. 2007). 

“Summary judgment is appropriate only if taking the evidence and 

all reasonable inferences drawn therefrom in the light most 

favorable to the nonmoving party, ‘no material facts are 

disputed and the moving party is entitled to judgment as a 
8

matter of law.’” Henry v. Purnell, 652 F.3d 524, 531 (4th Cir. 

2011) (en banc) (quoting Ausherman v. Bank of Am. Corp., 352 

F.3d 896, 899 (4th Cir. 2003)). “Credibility determinations, 

the weighing of the evidence, and the drawing of legitimate 

inferences from the facts are jury functions, not those of a 

judge.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 

(1986). 

We apply the substantive law of Maryland because 

jurisdiction in this case is based on diversity jurisdiction. 

Moore Bros. Co. v. Brown & Root, Inc., 207 F.3d 717, 722 (4th 

Cir. 2000). Maryland law provides that “[s]ettlement agreements 

are enforceable as independent contracts, subject to the same 

general rules of construction that apply to other contracts.” 

Maslow v. Vanguri, 896 A.2d 408, 419 (Md. Ct. Spec. App. 2006). 

When construing a contract, Maryland courts apply the principle 

of objective interpretation of contracts. Anderson Adventures, 

LLC v. Sam & Murphy, Inc., 932 A.2d 1186, 1194 (Md. Ct. Spec. 

App. 2007); Cochran v. Norkunas, 919 A.2d 700, 709 (Md. 2007). 

“If a contract is unambiguous, the court must give effect to its 

plain meaning and not contemplate what the parties may have 

subjectively intended by certain terms at the time of 

formation.” Nova Research, Inc. v. Penske Truck Leasing Co., 

L.P., 952 A.2d 275, 282 (Md. 2008). “[A] court must presume 

that the parties meant what they expressed.” United Servs. Auto. 
9

Ass’n v. Riley, 899 A.2d 819, 834 (Md. 2006)(internal quotation 

marks omitted). However, Maryland courts consider contractual 

language ambiguous “when [the language] read by a reasonably 

prudent person, [] is susceptible of more than one meaning.” 

B&P Enters. v. Overland Equip. Co., 758 A.2d 1026, 1037 (Md. Ct. 

Spec. App. 2000) (quoting Calomiris v. Woods, 727 A.2d 358 (Md. 

2000)). If a court finds the language is ambiguous, then a 

court may permit extrinsic evidence to determine the parties’ 

intent. B&P Enters., 758 A.2d at 1037. (citations omitted). 

Although state law governs settlement agreements, federal 

courts have the “inherent equitable power summarily to enforce a 

settlement agreement when the practical effect is merely to 

enter a judgment by consent.” Millner v. Norfolk & W.R. Co.,

643 F.2d 1005, 1009 (4th Cir. 1981). However, if the parties 

dispute the existence or validity of a settlement agreement, the 

court must hold a plenary evidentiary hearing to resolve the 

dispute. Id. 

In MSI’s briefs and at oral argument, MSI argues that 

genuine issues of material fact exist regarding the enforcement 

of the Settlement Agreement and that Appellees materially 

breached the terms of the Settlement Agreement. Because we 

conclude that genuine issues of material fact exist, the 

district court erred by granting summary judgment.
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III.

In this case, the district court held a plenary evidentiary 

hearing. At the hearing, the district court found that a 

settlement agreement existed, but made no factual findings 

resolving the material dispute of facts between the parties. 

Because we find that genuine issues of material fact exist, the 

district court improperly granted summary judgment to summarily 

enforce the Settlement Agreement. See Millner, 643 F.2d at 

1009-10 (holding summary enforcement of the settlement agreement 

was improper where an evidentiary hearing was required to 

resolve factual disputes). 

MSI primarily argues that Paragraph 4.C of the Settlement 

Agreement constitutes a condition precedent that was not met by 

Siddiqui and the corporations. Paragraph 4.C of the Settlement 

Agreement provides:

[u]pon execution of this Agreement and all necessary 

documents to effectuate conversion of the Pharmacies 

to MPI franchisees, MSI . . . will release, discharge 

and hold Siddiqui and the Companies . . . harmless 

from each and every claim relating to the Dispute, 

whether known or unknown, that MSI may have against 

Siddiqui and the Companies as of the Effective Date. 

J.A. 411 (emphasis added). Also, Paragraph 4.E states, “[u]pon 

receipt of the executed franchise documents discussed above, MSI 

agrees to cause its claims within the Litigation to be dismissed 

with prejudice[.]” Id.
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A condition precedent in a contract is “a fact, other than 

mere lapse of time, which, unless excused, must exist or occur 

before a duty of immediate performance of a promise arises.” 

Chirichella v. Erwin, 310 A.2d 555, 557 (Md. 1973) (finding no 

condition precedent created when the clause in the contract 

simply stated that the real estate closing would “[c]oincide 

with settlement of New Home in Kettering Approx. Oct. ‘71,’” and 

“merely fixe[d] a convenient and appropriate time for 

settlement”). 

In reviewing a contract, if a Maryland court finds a 

“‘contractual duty is subject to a condition precedent, whether 

express or implied, there is no duty of performance and there 

can be no breach by non-performance until the condition 

precedent is either performed or excused.’” All State Home 

Mortg., Inc. v. Daniel, 977 A.2d 438, 447 (Md. Ct. Spec. App. 

2009) (quoting Pradham v. Maisel, 338 A.2d 905, 909 (Md. Ct. 

Spec. App. 1975)). To determine whether a condition precedent 

exists, Maryland courts look to the terms of the contract:

whether a stipulation in a contract constitutes a 

condition precedent is [a question] of construction 

dependent on the intent of the parties to be gathered 

from the words they have employed and, in case of 

ambiguity, after resort to the other permissible aids 

to interpretation[.] 

Id. at 448 (quoting Aronson & Co v. Fetridge, 957 A.2d 125, 144 

(Md. Ct. Spec. App. 2008)). 
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A genuine issue of material fact exists regarding whether 

certain conditions precedent were satisfied. First, MSI argues 

that its release and discharge of liability as to Siddiqui and 

his corporations would trigger only upon execution of all 

necessary documents, which Appellees never signed. However, 

Appellees contend that the condition was satisfied because they 

properly executed the franchise agreement, which was the only 

necessary document for conversion. Appellees rely upon 

Paragraph 4.E of the Settlement Agreement, which provides 

“[u]pon receipt of the executed franchise documents discussed 

above, MSI agrees to cause its claims within the Litigation to 

be dismissed with prejudice[.]” Id. (emphasis added). 

Therefore, a genuine issue of material fact exists 

regarding which documents constitute “all necessary documents to 

effectuate conversion of the Pharmacies to MPI Franchisees” or 

“executed franchise documents” triggering MSI’s dismissal of its 

claims because the parties dispute which documents must be 

signed to effectuate conversion. See J.A. 411 (emphasis added). 

MSI contends that “all necessary documents” includes an 

amendment to the franchise agreement providing for a three-year 

term, a state-specific addenda, and documents related to the 

purchase of inventory from Cardinal Health, Inc. However, 

Appellees argue that “all necessary documents” is simply the 
13

franchise agreement. This factual dispute must be resolved 

prior to summary enforcement of the Settlement Agreement. 

Second, a factual dispute exists regarding whether 

conditions precedent were satisfied because it is unclear

whether Yousuf had authority to sign franchise-related documents 

on behalf of the corporations. MSI argues the bills of sale 

between Siddiqui and Yousuf may be invalid. Each bill of sale 

provides that the buyer “expressly understands and acknowledges” 

that it must “fully and completely discharge the liabilities 

associated with the corporations, including the seller’s 

personal guarantees” prior to the execution of the bill of sale. 

J.A. 414-15, 418-19. Otherwise, the bill of sale becomes null 

and void. 

It is uncontested that Yousuf did not fully and completely 

discharge the liabilities associated with the corporations prior 

to the execution of each bill of sale. Maryland law provides 

that, “[i]f a contract is unambiguous, the court must give 

effect to its plain meaning and not contemplate what the parties 

may have subjectively intended by certain terms at the time of 

formation.” Nova Research, Inc., 952 A.2d at 283. “[A] court 

must presume that the parties meant what they expressed.” Riley, 

899 A.2d at 833 (internal quotation marks omitted). However, 

the Appellees contend that the language in each bill of sale was 

a mutual mistake. Because the district court made no finding on 
14

this issue, a genuine issue of material fact exists. For 

example, if the bills of sale are determined null and void, all 

the shares of the common stock of the corporations reverted to 

Siddiqui and Yousuf had no authority to bind the corporations

when he executed the franchise agreements. Therefore, it is 

unclear who owns the corporations much less who has the 

authority to sign franchise and other related documents on 

behalf of the corporations. 

Accordingly, in light of these circumstances, there are 

genuine issues of material fact that preclude summary judgment. 

IV.

For the foregoing reasons, we vacate the district court’s 

order granting summary judgment and remand for further 

proceedings consistent with this opinion.

VACATED AND REMANDED