Court Opinion

ID: 221645
Source: CourtListenerOpinion
Date Created: 2011-07-22 18:47:10+00
Date Added: 2024-06-11T17:28:51.296098
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                             No. 10-2046

FIRST BANKERS CORPORATION,

                Plaintiff - Appellee,

          v.

WATER WITCH FIRE COMPANY, INCORPORATED,

                Defendant - Appellant.

Appeal from the United States District Court for the District of
Maryland, at Baltimore.    Richard D. Bennett, District Judge.
(1:09-cv-00975-RDB)

Submitted:   June 14, 2011                    Decided:    July 22, 2011

Before TRAXLER,   Chief   Judge,   and   NIEMEYER   and   KING,   Circuit
Judges.

Affirmed by unpublished per curiam opinion.

Roger N. Powell, Pikesville, Maryland, for Appellant. Geoffrey
H. Genth, Mary Beth Ewen, KRAMON & GRAHAM, P.A., Baltimore,
Maryland, for Appellee.

Unpublished opinions are not binding precedent in this circuit.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

            Water       Witch    Fire           Company,     Incorporated           appeals      a

judgment    against       it    in    an        action    brought       by   First       Bankers

Corporation (“FBC”), contending that the district court lacked

subject-matter jurisdiction.                Finding no error, we affirm.

            FBC is an Indiana-based business that finances fire

companies’      equipment       leases,          and     Water   Witch       is    a   Maryland

volunteer      fire     company.           In    May     2007,   FBC     and      Water     Witch

entered into both a lease and option agreement and an escrow

agreement.       Pursuant to these agreements, Water Witch leased a

fire   truck     from    FBC    and    FBC       deposited       into    escrow        $200,000,

which was to be paid to the truck’s manufacturer.                                  Water Witch

subsequently found an alternative financing source, however, and

failed to make lease payments to FBC when they began to become

due on September 1, 2008.

            On     October       15,        2008,        Water    Witch,          through     its

attorney,      Roger     Powell,      sent        FBC’s    principal,         John      Hill,    a

proposed release of the escrowed funds.                           On October 29, 2008,

Hill replied via e-mail that the release’s terms were “one-sided

and unacceptable” and suggested that the parties’ principals and

attorneys      participate      in     a    conference       call       in   an    attempt      to

resolve their differences.                 J.A. 61.         When Water Witch did not

respond, Hill sent Powell another e-mail on November 6, which

stated that, absent a resolution, FBC would sue Water Witch in

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federal court.      When Water Witch again failed to respond, FBC’s

counsel, Geoffrey Genth, sent Powell a letter dated December 3

stating    that    FBC   considered     the    escrow   agreement     to    have

terminated and that FBC regarded Water Witch as having abandoned

any claim to the funds therein.             The letter informed Water Witch

that FBC would disburse the funds “in short order” and asked

Water Witch to provide written notice on or before December 16

if it disputed FBC’s right to do so.            J.A. 65.

           On December 9, Powell sent Genth a letter outlining

some of Water Witch’s positions but not conceding FBC’s right to

dispute the funds.          Genth then responded with a letter dated

December   12     stating   that   he   did    “not   read   [Water   Witch’s]

December 9 letter as disputing that right of [FBC]” and stating

that FBC “will proceed accordingly, absent some contrary written

indication from [Powell] . . . on or before December 16.”                   J.A.

71.   On December 17, Powell responded with a letter to Genth

stating

           Respectfully, I have no idea what “you                     are
      talking about” in your December 12, 2008 letter.

           What your letter does not do is respond to your
      fiduciary responsibilities nor does it respond to the
      pertinent portions of my letter of December 9, 2008.

           Whatever you do, you proceed at your own peril
      subject to my client’s rights.

J.A. 73.

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            Having not received the confirmation that it sought,

on   February     9,   2009,       FBC     filed         suit     against       Water     Witch    in

Maryland state court.              When Water Witch filed a request for jury

trial,    however,      FBC       filed        a    notice        of    voluntary         dismissal

without prejudice.

            On April 16, 2009, FBC filed this action in federal

district    court      on    the       basis       of    diversity       jurisdiction.            The

complaint    requests        a     declaratory            judgment       declaring        that    the

parties’ escrow agreement terminated according to its terms on

October     15,    2008,         and     thus       that     FBC        no     longer     has     any

obligations or liabilities in connection with the funds that

were in the account.                It also asserts a cause of action for

breach of contract and requests an award of money damages.

            Water      Witch       moved       to       dismiss    the       suit   for    lack    of

subject-matter jurisdiction, arguing that there was no actual

controversy regarding the escrow agreement and the amount in

controversy       in   the       breach     of          contract       claim    was     less     than

$75,000.    See Fed. R. Civ. P. 12(b)(1).

            The district court denied the motion, reasoning:

           In this case, a declaration concerning the rights
      under the escrow fund would yield a pecuniary result
      in excess of $200,000 for one of the parties.
      Although Water Witch asserts that it has agreed to
      release the escrow monies and accrued interest to
      [FBC], the Complaint and [FBC’s] Memorandum make clear
      that this offer was insufficient to convince [FBC]
      that Water Witch had abandoned all potential claims or
      counterclaims regarding the Escrow Agreement.

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J.A. 84-85.

              After the district court denied Water Witch’s motion,

Water Witch filed an answer and asserted a counterclaim alleging

fraud by FBC.              FBC subsequently moved for, and was granted,

summary    judgment         both     on     its       claims    and     on     Water    Witch’s

counterclaim.         The district court awarded FBC damages for Water

Witch’s breach as well as attorneys’ fees and costs.                                  The court

also    entered       an    order     declaring          that    the     escrow       agreement

terminated on October 15, 2008.

              Water        Witch    now     appeals,          again    arguing        that        the

district court lacked jurisdiction because there was no actual

controversy over the escrowed funds.                           See Volvo Constr. Equip.

N. Am., Inc. v. CLM Equip. Co., 386 F.3d 581, 592 (4th Cir.

2004)     (holding          that     for     a        district        court     to     exercise

jurisdiction over a declaratory judgment action, the complaint

must allege “an ‘actual controversy’ between the parties ‘of

sufficient      immediacy          and     reality       to    warrant        issuance       of    a

declaratory judgment’” (quoting 28 U.S.C. § 2201)).                                  Without so

much as acknowledging the factual basis that the district court

gave for its ruling, Water Witch conclusorily maintains that it

in fact offered to release the funds in October 2008.

              Finding no error, we affirm on the reasoning of the

district    court.          We     dispense       with    oral    argument       because          the

facts   and    legal        contentions       are      adequately       presented        in       the

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materials   before   the   court   and   argument   would   not   aid   the

decisional process.

                                                                  AFFIRMED

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