Opinion ID: 1995721
Heading Depth: 1
Heading Rank: 3

Heading: The Claim Against Bankers

Text: Bankers' motion to be dismissed from the second amended complaint was granted. That complaint, stripped to its essential facts, said that Bankers had directed that the deed in lieu of foreclosure be made to Melba and that Bankers was the recipient of the net sales proceeds of the condominium units at Antigua. The complaint further alleges [t]hat BANKERS due to its absolute control and direction of Melba gained an unjust advantage over both the rights of the individual Antigua Unit Owners and the rights of the Antigua Council of Unit Owners to enforce their paramount equity as to the numerous breaches of warranties both express and implied, and due to numerous violations of building codes suffered by Antigua and the Unit Owners. The Plaintiffs do not allege any ground of Bankers' liability to them which is independent of Melba's alleged liability to them. The entire thrust of the allegations against Bankers is an attempt to reach Bankers through piercing the corporate veil of Melba. To succeed on that claim the Plaintiffs would have to show that Bankers' use of Melba worked a fraud against the Plaintiffs or deprived the Plaintiffs of an equity which requires enforcement, and which is paramount to the ordinary expectation of limited liability on the part of the shareholder of [Melba]. Starfish Condominium, supra, 295 Md. at 714, 458 A.2d at 816. General or conclusory allegations of fraud are insufficient. A plaintiff must allege facts which indicate fraud or from which fraud is necessarily implied. See Wooddy v. Wooddy, 256 Md. 440, 261 A.2d 486 (1970); Parish v. Maryland & Virginia Milk Producers Association, 250 Md. 24, 242 A.2d 512 (1968); Brack v. Evans, 230 Md. 548, 187 A.2d 880 (1963); Bachrach v. Washington United Cooperative, Inc., 181 Md. 315, 29 A.2d 822 (1943). Merely alleging an unjust advantage to Bankers and a paramount equity to the Plaintiffs is legally inadequate. In their third amended complaint (the revised second amended), filed after Bankers had been dismissed and further amendment as to Bankers had been prohibited, the Plaintiffs added additional allegations against Bankers. This was improper. The additional allegations are not before us on the appeal from the dismissal of the claim made against Bankers in the second amended complaint. In order properly to have placed the additional allegations before us, the Plaintiffs should have tendered the additional allegations as to Bankers to the circuit court and moved that the judgment against Bankers be reopened to permit further amendment. If that request were denied, it would be open for the Plaintiffs to argue on appeal after final judgment that that denial was an abuse of discretion. Even if the additional allegations were properly before us, we would find no error in the dismissal of Bankers. The additional allegations were: That all of the managing officers, directors and employees directing the affairs of Melba were at all times employees of BANKERS, paid by BANKERS, with all employee benefits approved by BANKERS housed in BANKERS offices and furnished with identification cards of BANKERS which cards identified the carrier as BANKERS employees, and which employees were directed in all their activities by BANKERS supervisory personnel. In Starfish the subsidiary corporation was the service company of the parent savings and loan. The subsidiary operated out of the offices of the parent using persons on the payroll of the parent. That was not fraud in Starfish and it is not fraud here.