Source: http://md.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20180220_0000253.DMD.htm/qx
Timestamp: 2019-04-19 21:13:39+00:00

Document:
LINDA CRAKES LINDLEY, et al., Defendants.
Pending before the Court are cross-motions for summary judgment filed by Plaintiff William Bradford Ross, III (“Ross”) (ECF No. 41) and Defendants Linda Crakes Lindley (“Lindley”) and RE/MAX 100 (collectively, “Defendants”) (ECF No. 40). Having considered the submissions of the parties (ECF Nos. 40, 41, 42, 43, 44 & 45), I find that a hearing is unnecessary. See Loc. R. 105.6. For the reasons set forth below, Ross's motion (ECF No. 41) will be denied and Defendants' motion (ECF No. 40) will be granted.
Ross filed his Complaint (ECF No. 1) against Defendants on January 13, 2017. On February 23, 2017, Defendants filed a counterclaim against Ross. (ECF No. 9.) On March 17, 2017, this case was referred to me for all proceedings, pursuant to 28 U.S.C. § 636(c) and Local Rule 301.4. (ECF No. 15.) Ross filed an Amended Complaint (ECF No. 34) on May 30, 2017, and Defendants filed an amended answer and counterclaim thereafter (ECF No. 35).
The Amended Complaint contains three counts: breach of contract (Count I), constructive fraud (Count II), and negligence (Count III). Defendants' counterclaim is for breach of contract (Count I) and contractual attorneys' fees/indemnification (Count II).
Because the Court's jurisdiction over this case is based on diversity, the Court must apply the choice of law rules of Maryland. Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 496 (1941). Maryland adheres to the lex loci delicti rule to determine the applicable law in tort actions. Philip Morris Inc. v. Angeletti, 358 Md. 689, 744 (2000). Under this rule, the “substantive tort law of the state where the wrong occurs governs.” Hauch v. Connor, 295 Md. 120, 123 (1983). For contract actions, Maryland follows the principle of lex loci contractus, applying the law of the jurisdiction where the alleged contract was made. The parties agree that Maryland substantive law applies to all of the claims at issue.
Unless otherwise specified, the following facts are not in dispute. Additional facts, some of which are in dispute, will be discussed later in this opinion. This case arises from Ross's agreement to lease his property to non-party Kendall Williford (“Williford”). The property, located at 11932 Maiden Point Farm Road, Newburg, Maryland 20664 (“property”) comprises about 122 acres and contains five separate residences (the Main House, the Cottage House, the Tenant House, the Pool House, and the Gate House). Before leasing the property to Williford, Ross met with Harold Mertz (“Mertz”) to discuss a listing agreement for the property. (ECF No. 40-1 at 56.) Later, Ross entered into three separate agreements (“Brokerage Agreements”) with RE/MAX 100, which granted Defendants the right to offer for lease the Main House, the Cottage House, and the Pool House. Notably, none of the Brokerage Agreements granted Defendants the right to offer for lease the entire property. The Brokerage Agreements were unrelated to the listing agreement that Ross purportedly entered into with Mertz.
In March 2014, Defendants received an application from individuals seeking to rent the Main House. Lindley, who is associated with RE/MAX 100, obtained credit reports for the prospective tenants and no agreement for the rental of the Main House was reached. In July 2014, Lindley received an application for an individual to rent the Pool House. Lindley transmitted the application to Ross, noting that it was incomplete and warning Ross of the risks associated with renting to a tenant without complete information. Ross subsequently entered into a lease agreement with this tenant. In July and August 2014, without the assistance of Defendants, Ross located tenants to occupy the Gate House, the Cottage House, and the Tenant House, and negotiated lease agreements with those tenants.
In August 2014, Ross negotiated the terms of a lease agreement with Williford. During the negotiations, Ross was assisted by Mertz, who assured Ross that Williford “was a very responsible person, ” that Mertz had known Williford for “quite a while, ” that Williford paid his rent on time, and that that Ross “could rely on [Williford].” (See ECF No. 40-1 at 50.) Based on Mertz's representations, as well as Ross's own intuition about Williford, Ross decided to lease the property to him. Williford submitted an Application for Tenancy to Lindley, wherein he indicated a monthly income in excess of $10, 000 and assets including $7, 500 in a bank account. At Ross's instruction, Lindley memorialized the terms of the lease agreement that Ross and Williford had discussed.
The essential terms of the Williford Residential Dwelling Lease (“Williford Lease” or “Lease”) were that Williford would pay Ross monthly rent in the amount of $7, 200.00, and in exchange, Williford would receive a lease for the entire property, including the “five homes, out buildings, stable, & land” situated thereon, for a period of five years. (ECF No. 40-1 at 1.) Williford, Ross, and Ross's son signed the lease agreement. (Id. at 53; see also ECF No. 45 at 12.) Besides verifying Williford's employment history with Mertz, Defendants did not conduct a background investigation or credit check of Williford.
Williford ultimately violated the terms of the Lease by failing to pay rent and failing to maintain the property, which resulted in financial hardship for Ross. Ultimately, Ross's property, which had been in his family for at least two generations, was foreclosed upon.
Ross brought this case to recover for his losses. He alleges that Defendants breached a contract that they had entered into with him by failing to conduct a proper background investigation of Williford. He also alleges that Defendants withheld adverse information about Williford from him, and that this amounted to a constructive fraud. Finally, he alleges that RE/MAX 100 was negligent in failing to supervise Lindley and that both Defendants were negligent in failing to conduct a proper background investigation of Williford before Ross signed the lease agreement. In their counterclaim, Defendants allege that Ross agreed to pay a commission to Defendants. Because Ross has not paid the full balance due on the commission, Defendants allege that Ross is liable for breach of contract.
“The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The burden is on the moving party to demonstrate the absence of any genuine dispute of material fact. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). If sufficient evidence exists for a reasonable jury to render a verdict in favor of the party opposing the motion, then a genuine dispute of material fact is presented and summary judgment should be denied. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). However, the “mere existence of a scintilla of evidence in support of the [opposing party's] position” is insufficient to defeat a motion for summary judgment. Id. at 252.

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