Court Opinion

ID: 4023275
Source: CourtListenerOpinion
Date Created: 2016-08-10 19:00:55.153877+00
Date Added: 2024-06-11T09:26:39.231621
License: Public Domain

UNPUBLISHED

                   UNITED STATES COURT OF APPEALS
                       FOR THE FOURTH CIRCUIT

                            No. 15-1551

FOREST CAPITAL, LLC,

                Plaintiff - Appellant,

           v.

BLACKROCK, INC.,

                Defendant - Appellee.

------------------------------

COMMERCIAL FINANCE ASSOCIATION,

                Amicus Supporting Appellant,

SECURITIES INDUSTRY AND FINANCIAL MARKETS ASSOCIATION,

                Amicus Supporting Appellee.

Appeal from the United States District Court for the District of
Maryland, at Baltimore.     J. Frederick Motz, Senior District
Judge. (1:14−cv−01530−JFM)

Argued:   May 11, 2016                    Decided:   August 10, 2016

Before GREGORY, Chief Judge, and WILKINSON and DIAZ, Circuit
Judges.

Affirmed by unpublished opinion. Judge Diaz wrote the opinion,
in which Chief Judge Gregory and Judge Wilkinson joined.
ARGUED: Jeffrey A. Wurst, RUSKIN MOSCOU FALTISCHEK, P.C.,
Uniondale, New York, for Appellant.   Thomas E.L. Dewey, DEWEY
PEGNO & KRAMARSKY LLP, New York, New York, for Appellee.     ON
BRIEF: David C. Gartenberg, DEWEY PEGNO & KRAMARSKY LLP, New
York, New York, for Appellee.    David J. Chizewer, Richard M.
Kohn, Amanda G. Penabad, GOLDBERG KOHN LTD., Chicago, Illinois;
Jonathan N. Helfat, Chad B. Simon, OTTERBOURG P.C., New York,
New York, for Amicus Commercial Finance Association.      Kevin
Carroll, SECURITIES INDUSTRY AND FINANCIAL MARKETS ASSOCIATION,
Washington, D.C.; Lewis J. Liman, Sandra M. Rocks, Abena A.
Mainoo, CLEARY GOTTLIEB STEEN & HAMILTON LLP, New York, New
York, for Amicus The Securities Industry and Financial Markets
Association.

Unpublished opinions are not binding precedent in this circuit.

                               2
DIAZ, Circuit Judge:

       BlackRock, Inc., an investment firm, received a letter from

its customer, People’s Power & Gas (“PP&G”), stating that PP&G

had assigned a security interest in its BlackRock account to a

creditor, Forest Capital, LLC.                       PP&G’s letter requested that

future remittances from the account be sent to Forest.                                     When

PP&G    changed     its    mind    and    asked       to   receive       funds,    BlackRock

complied.        According        to    Forest,       BlackRock’s        payment    to     PP&G

violated      two   sections       of    Article       9   of    the     Maryland       Uniform

Commercial Code (UCC) and amounted to conversion.                            The district

court      dismissed      the   complaint       for    failure      to    state     a    claim.

Because the UCC provisions on which Forest relies do not provide

a private right of action, and because the property Forest seeks

to recover is not subject to a claim for conversion, we affirm.

                                            I.

                                            A.

       PP&G is an energy service company. 1                     It buys energy from ISO

New    England      (“ISO-NE”),         which       extends     PP&G     credit    and,    for

       1We derive our account of the facts from Forest’s
complaint, viewing them in the light most favorable to Forest
and drawing all reasonable inferences in its favor.         See
Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir.
1992).   We have also considered several documents attached to
the complaint and to BlackRock’s subsequent motions, which we
are authorized to rely on because we find them “integral to the
(Continued)
                                                3
collateral,    requires    PP&G   to   deposit     funds   into      a    BlackRock

account held in PP&G’s name.           To perfect its security interest

in the account, ISO-NE entered into a Control Agreement with

BlackRock    and   PP&G;   as   relevant    here,    the   Control        Agreement

authorized    BlackRock    to   release    funds    to   PP&G   at       ISO-NE   and

PP&G’s joint request.

     PP&G, in turn, sells energy to end users on credit, but

rather than collect payment, it sells its accounts receivable to

Forest at a discount.       This arrangement between PP&G and Forest,

known as factoring, is set out in a Master Factoring Agreement

(“MFA”).     The MFA includes two other obligations relevant here.

First, Forest agreed to fund up to 75 percent of the collateral

PP&G was required to maintain in the BlackRock account.                     Second,

PP&G granted Forest a security interest in substantially all of

its assets, with the exception of “prepayments to third parties

for energy purchases.”      J.A. 41.

     In December 2013, Forest discovered that PP&G had “fail[ed]

to fulfill various obligations under the MFA” and, as a result,

declared PP&G in default.          J.A. 11.        To induce Forest not to

enforce its default remedies, PP&G’s CEO, David Pearsall, sent a

complaint and authentic.” Kensington Volunteer Fire Dep’t, Inc.
v. Montgomery County, 684 F.3d 462, 467 (4th Cir. 2012) (quoting
Philips v. Pitt Cty. Mem’l Hosp., 572 F.3d 176, 180 (4th Cir.
2009)).

                                       4
letter     to    BlackRock        notifying       it     of      “certain       financing

agreements entered into by and between [PP&G] and Forest”:

       PP&G has granted Forest a security interest in
       substantially all of its assets including, but not
       limited to, all payment intangibles which may be owed
       at any time by BlackRock . . . to PP&G, including the
       return of any deposits or any part thereof given by or
       on behalf of PP&G to BlackRock . . . .    Accordingly,
       this shall serve as notification and authorization
       that you are to remit to Forest all monies that may be
       or may become payable by BlackRock to [PP&G].     This
       instruction cannot be changed except by a writing duly
       executed by Forest.     All payments to or for the
       benefit of PP&G and/or Forest may only be sent by wire
       as follows . . . .

J.A. 48.        Forest never changed the instruction, but Pearsall

did.     He asked BlackRock to remit funds directly to PP&G, and

BlackRock complied, making two payments to PP&G totaling more

than $1,000,000.

                                         B.

       Believing itself entitled to the transferred funds, Forest

quickly    filed    suit,       asserting       claims     of    breach    of     contract

against PP&G, breach of guaranty of validity against Pearsall,

and    conversion     and   a    violation      of   UCC    section       9-607    against

BlackRock.       The parties agreed to a Stipulation and Order of

Settlement, according to which BlackRock paid some funds from

the    account   to    Forest,     and   the      suit     was    dismissed        without

prejudice, with all parties reserving their rights, remedies,

and defenses.

                                            5
     After PP&G entered Chapter 7 bankruptcy, Forest filed suit

against   BlackRock    for   (1) conversion,        (2) violation   of   UCC

section 9-607, (3) violation of UCC section 9-406, and (4) an

accounting.   BlackRock moved to dismiss under Federal Rule of

Civil Procedure 12(b)(6), and the district court granted the

motion.   Forest Capital LLC v. BlackRock, Inc., No. JFM-14-1530,

2015 WL 874611 (D. Md. Feb. 26, 2015).                Forest’s subsequent

motion for reconsideration was denied.

     This appeal followed.

                                  II.

     We review de novo the district court’s grant of BlackRock’s

motion to dismiss for failure to state a claim.                  Kensington

Volunteer Fire Dep’t, Inc. v. Montgomery County, 684 F.3d 462,

467 (4th Cir. 2012).     We accept as true all of the complaint’s

factual   allegations,   ensuring       that   it    contains   “sufficient

factual matter, accepted as true, to ‘state a claim to relief

that is plausible on its face.’”         De’lonta v. Johnson, 708 F.3d
520, 524 (4th Cir. 2013) (quoting Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009)).     We may affirm “on any legal ground supported

by the record and are not limited to the grounds relied on by

the district court.”     Jackson v. Kimel, 992 F.2d 1318, 1322 (4th

Cir. 1993).    Because this case involves matters of state law

only, “our role is to apply the governing state law, or, if

                                    6
necessary, predict how the state’s highest court would rule on

an unsettled issue.”        Askew v. HRFC, LLC, 810 F.3d 263, 266 (4th

Cir. 2016) (quoting Horace Mann Ins. Co. v. Gen. Star Nat’l Ins.

Co., 514 F.3d 327, 329 (4th Cir. 2008)).

     On appeal, Forest objects to the dismissal of its claims

for violation of the UCC and for conversion, and it argues that

the district court abused its discretion in ignoring Forest’s

request to amend its complaint and in denying its motion for

reconsideration.      We address these issues in turn.

                                      A.

     Forest asserts that BlackRock’s transfer of funds to PP&G

was made “in violation of” sections 9-406 and 9-607 of the UCC.

J.A. 17, 18.      Because we accept BlackRock’s argument that these

UCC sections do not provide a private right of action, we affirm

the district court’s dismissal of the claims. 2

                                      1.

     When determining whether a state statute creates a private

right    of    action,     “the   central          inquiry   [is]   whether    the

legislative body intended to create [one], either expressly or

by implication.”         Fangman v. Genuine Title, LLC, 136 A.3d 772,

779 (Md.      2016)   (quoting    Baker       v.   Montgomery   County,   50 A.3d
2  We decline to address the district court’s holdings
regarding the validity of Forest’s security interest or the
adequacy of notice given to BlackRock.

                                          7
1112, 1123 (Md. 2012)).              Here, Forest does not argue that the

statute expressly creates a right, so we decide only whether one

is implied.          Maryland courts ask three questions to determine

whether a state statute implies a private right of action:

       (1) Is the plaintiff one of the class for whose
       special benefit the statute was enacted? (2) Is there
       any indication of legislative intent, explicit or
       implicit, either to create such a remedy or to deny
       one?     (3) Is it consistent with the underlying
       purposes of the legislative scheme to imply such a
       remedy for the plaintiff?

Id. at 780; see also Erie Ins. Co. v. Chops, 585 A.2d 232, 236-

37 (Md. 1991) (holding that a statute requiring auto insurers to

notify the Motor Vehicle Administration of the cancellation of

an insured’s policy did not create a private right of action in

favor of a plaintiff injured by an uninsured driver whose lapse

in coverage the insurer failed to report).                       If “neither the

statute nor the legislative history reveals a legislative intent

to create a private right of action for the benefit of the

plaintiff,” a court need proceed no further.                 Genuine Title, 136
A.3d at 779 (quoting Baker, 50 A.3d at 1123).

       In    construing     the    UCC,    Maryland     courts    use   “the   same

principles of statutory construction that . . . would apply in

determining        the   meaning   of    any   other    legislative     enactment,”

though      some     consideration    is   given   to   maintaining      uniformity

among jurisdictions.          Jefferson v. Jones, 408 A.2d 1036, 1039

(Md.        1979).         These        interpretive      principles      “require

                                           8
ascertainment     of      the    legislative         intent,     and    if . . .

construction becomes necessary because the terminology chosen is

not   clear,    then   [the     court]       must   consider    not    only   the

significance of the literal language used, but the effect of [a]

proposed reading in light of the legislative purpose sought to

be accomplished.”         Id.   Moreover, the UCC’s Official Comments

“are an excellent place to begin a search for the legislature’s

intent when it adopted the Code,” though “these comments are not

controlling authority and may not be used to vary the plain

language of the statute.”        Id.

                                        2.

      We begin with section 9-406(a).               According to Forest, the

statute grants a private right of action to an assignee (Forest)

against   an    account    debtor      (BlackRock)    who,     after   receiving

notice that its debt has been assigned, pays the assignor (PP&G)

rather than the assignee. 3

      In relevant part, the statute provides:

      [A]n account debtor on an account, chattel paper, or a
      payment intangible may discharge its obligation by
      paying the assignor until, but not after, the account
      debtor receives a notification, authenticated by the
      assignor or the assignee, that the amount due or to
      become due has been assigned and that payment is to be
      made   to  the  assignee.     After  receipt   of  the
      notification, the account debtor may discharge its

      3BlackRock objects to being called an account debtor, but
we need not address the issue because of our holding that the
statute does not provide Forest a right of action.

                                         9
      obligation by paying the assignee and may                                not
      discharge the obligation by paying the assignor.

Md. Code Ann., Com. Law § 9-406(a).                    An “account debtor” is “a

person     obligated      on    an   account,        chattel   paper,    or    general

intangible.”         § 9-102(3).         An     account    debtor,    therefore,          is

simply the name given to a person with certain kinds of payment

obligations.        A “general intangible” is “any personal property,

including things in action, other than accounts, chattel paper,

commercial       tort     claims,    deposit      accounts,       documents,    goods,

instruments,        investment         property,        letter-of-credit        rights,

letters of credit, money, and oil, gas, or other minerals before

extraction.”        § 9-102(42) (emphasis added).              This is of course a

catchall definition of exclusion, but the UCC does tell us that

the   term   “includes         payment    intangibles       and    software.”         Id.

“Payment intangible” is further defined as “a general intangible

under    which     the    account      debtor’s      principal     obligation        is   a

monetary obligation.”           § 9-102(62).

      With these definitions in mind, we return to the operation

of section 9-406(a).            A person indebted on a payment intangible

(the account debtor) may satisfy its obligation by paying its

creditor     (the       assignor)    until      it     receives    notice     that    the

assignor     has    assigned     the     right    to    receive    payment.      After

notification, the account debtor may satisfy the obligation only

by paying the assignee.

                                           10
      To    determine         whether        section    9-406    provides          an    implied

right of action, we first ask whether Forest (the assignee) is

part of the class for whose special benefit the statute was

enacted.     To the extent the statute grants any rights, it grants

one to the account debtor, not to the assignee, as it explains

when the account debtor “may discharge its obligation” and avoid

making payments to both the assignor and assignee.                                  See In re

Taranto,     No.    10-76041-AST,             2012 WL 1066300,         at   *11     (Bankr.

E.D.N.Y. Mar. 27, 2012) (stating that N.Y. U.C.C. Law § 9-406

“prevents different creditors from being paid twice for the same

debt”).       The       commentary      confirms        this    reading,         stating      that

“[s]ubsection           (a)    provides       the      general    rule       concerning            an

account debtor’s right to pay the assignor until the account

debtor receives the appropriate notification.”                              Md. Code Ann.,

Com. Law § 9-406 cmt. 2 (emphasis added).

      Accordingly,            because    the     statute       grants       rights       to    the

account debtor rather than the assignee, we think the better

view of the statute is that account debtors are its special

beneficiaries.           Cf. Auto. Acceptance Corp. v. Universal C.I.T.

Credit     Corp.,       139 A.2d 683,    686     (Md.    1958)    (referring            to   a

similar provision in a now-repealed statute, Md. Code, art. 8,

sec. 2 (1951), as “protecting a debtor who pays to the assignor

without notice of the assignment” (emphasis added)).                                    But even

if   we    were    to    assume       that    Forest      is   part    of    the    class      the

                                               11
legislature was specially intending to benefit, we would still

proceed to the second question, whether there is “legislative

intent, explicit or implicit, either to create . . . a remedy or

to deny one.”    Genuine Title, 136 A.3d at 779 (quoting Baker, 50
A.3d at 1122); see also id. at 786 (noting that members of the

class for whose benefit a statute was enacted may still lack a

private right of action).

     Nothing suggests such an intention.     As noted, if section

9-406 grants any rights, it grants them to the account debtor.

It grants no rights to the assignee and imposes no obligations

on the account debtor; whatever “obligation” the account debtor

may have is assumed to exist already.        Section 9-406 simply

explains how to satisfy that obligation, providing a potential

defense to an account debtor who has already paid the assignor

or assignee.    This is strong evidence that the legislature did

not intend to confer a private right of action.     See Baker, 50
A.3d at 1123 (“If a statute’s language provides a right to a

particular class of persons, there is a strong inference that

the legislature intended the statute to carry an implied cause

of action.     Conversely, that inference becomes attenuated when

the statute is framed as a ‘general prohibition or a command’ to

a governmental entity or other group or confers a generalized

benefit.” (citations omitted) (quoting Univs. Research Ass’n v.

Coutu, 450 U.S. 754, 772 (1981))).       The lack of evidence of

                                12
legislative intent alone defeats Forest’s argument that section

9-406 confers a right of action.

     A right of action for the assignee is also inconsistent

with the underlying purpose of the statute, which is to clarify

an   account      debtor’s    payment    obligation       when   its     debt   is

assigned.        The court’s decision in Platinum Funding Services,

LLC v. Petco Insulation Co., No. 3:09CV1133 MRK, 2011 WL 1743417

(D. Conn. May 2, 2011), makes this point.             There, the plaintiff

was a factor who purchased some but not all of the accounts

receivable     of    the   assignor.     The   plaintiff    gave   the    account

debtor notice under section 9-406 that payment on all invoices

should be made to the plaintiff—the purported assignee—and not

to the assignor.           Id. at *2.        When the account debtor made

payments    to    the   assignor   on   invoices   that    the   plaintiff      had

neither purchased nor been assigned, the plaintiff nevertheless

alleged it was entitled to recover under section 9-406, solely

on the basis that notice under the statute created a payment

obligation.         Id. at *6.     The court rejected this “novel legal

theory of recovery”: “Because the right to receive payments on

those particular invoices was never assigned to [the plaintiff],

UCC § 9-406 . . . [is] of no help to [the plaintiff’s] cause.”

Id. at *9.

     We agree with the court in Platinum Funding that “[t]he

language of UCC § 9-406 . . . presumes that an ‘assignor’ has

                                        13
already assigned its right to receive payment from an account

debtor to an ‘assignee.’”         Id.        And as the case demonstrates,

creating a private right of action under section 9-406 could

undercut that presumption, creating rights out of nothing more

than    a    notification   and      submitting         account   debtors     to

obligations they never agreed to take on.               We do not believe the

Court of Appeals of Maryland would recognize such a right of

action.

       Nevertheless, Forest relies on Platinum Funding to press

its contention that section 9-406 confers a right of action,

apparently because the plaintiff there characterized its claim

as one made under section 9-406, and the court never explicitly

rejected that characterization.              Forest is wrong.      First, the

court rejected the plaintiff’s purported 9-406 claim.                  Second,

whether section 9-406 confers a right of action was not an issue

in the case.      Finally, the court’s description of the statute

supports a reading consistent with ours, not Forest’s: “When a

factoring    firm . . .   provides      an    account   debtor . . .   with    a

notice under UCC § 9–406 . . ., the notice ensures that if the

factoring firm later sues the account debtor for misdirecting

payments to the factoring firm’s assignor, the account debtor

will not be able to assert in defense that it already paid the

assignor.”     Id. at *8.    The effect of the notice is to defeat

the account debtor’s defense that it has satisfied the debt, not

                                     14
to create a freestanding cause of action for disregarding the

notice.

       In Forest’s view, however, without “an independent cause of

action in favor of a secured party, an assignee would be void of

a     remedy    after    an    account    debtor   failed        to   abide    by     a

notification.”          Reply Br. at 13.         That is not correct.               For

example, in IIG Capital LLC v. Archipelago, L.L.C., 36 A.D.3d
401, 402 (N.Y. App. Div. 2007), the plaintiff was a factor who

was assigned accounts receivable on which the defendants were

obligated.      Although the plaintiff gave notice of the assignment

under section 9-406(a), the defendants never paid the plaintiff,

who brought claims for breach of contract and account stated.

See id. at 402-03.

       The     court    denied    the    defendants’   motion         to   dismiss,

rejecting in particular their argument that they had already

settled the accounts with the assignor.                Id. at 404.            Because

the    accounts    “were      assigned    to    plaintiff    pursuant         to    the

factoring agreement, and proper notice was given [under section

9-406],      defendants’      payment    in   settlement    to    [the     assignor]

would not be a defense to an action by plaintiff to collect on

the accounts.”          Id.    As IIG demonstrates, an assignee who has

provided notice under section 9-406 has other remedies available

when an account debtor pays the assignor and refuses to pay the

assignee.

                                         15
                                          3.

     We find even less reason to think that UCC section 9-607(a)

provides Forest a private right of action.                  The statute reads as

follows:

        If so agreed,       and    in   any    event      after    default,   a
        secured party:

          (1) May notify an account debtor or other person
          obligated on collateral to make payment or otherwise
          render performance to or for the benefit of the
          secured party;

          . . .

          (3) May enforce the obligations of an account debtor
          or other person obligated on collateral and exercise
          the rights of the debtor with respect to the
          obligation of the account debtor or other person
          obligated on collateral to make payment or otherwise
          render performance to the debtor, and with respect
          to any property that secures the obligations of the
          account debtor or other person obligated on the
          collateral . . . .

§ 9-607(a).       Subsection (e) clarifies that “[t]his section does

not determine whether an account debtor . . . owes a duty to a

secured       party.”      § 9-607(e).          Rather,       as   the    commentary

explains, “This section establishes only the baseline rights of

the secured party vis-a-vis the debtor [i.e., PP&G]—the secured

party    is    entitled    to    enforce      and   collect    after     default   or

earlier if so agreed.”           Id. at cmt. 6 (emphasis added).

     The statute does not expressly create a right of action for

a   secured     party     such    as    Forest,     nor    does    it    impose    any

obligations on an account debtor.               While section 9-607 does give

                                          16
secured parties “the right to enforce claims that the debtor may

enjoy against others,” id. at cmt. 3, the text and commentary

make plain that this is a right against the debtor–assignor, not

the account debtor.

      In sum, we hold that there is no private right of action

for transfers made “in violation of [sections 9-406 and 9-607]

of   the   UCC.”        J.A.    17,    18.        Accordingly,       the     claims      were

properly dismissed.

                                             4.

      In its reply brief, Forest argues for the first time that,

even if it has no claim under the UCC, it has nevertheless

stated     a    claim    for    breach    of      contract.        Reply     Br.    at    15.

According       to   Forest,    “the     existence      of    a   breach     of    contract

claim is still plausible on the face of the Complaint—as the

Complaint alleges that Forest, standing in the shoes of PP&G, is

asserting a claim against BlackRock, an account debtor, as if

BlackRock had failed to pay the funds to PP&G.”                      Id.

      However,        “issues    raised      for      the    first    time    on    appeal

generally will not be considered.”                    Karpel v. Inova Health Sys.

Servs.,        134 F.3d 1222,     1227     (4th    Cir.       1998)    (refusing       to

consider        a    hostile-work-environment           claim      presented       to     the

district court after summary judgment had been granted for the

defendant).          And even when properly preserved issues are raised

on appeal, they must be raised in the opening brief.                          See Carter

                                             17
v. Lee, 283 F.3d 240, 252 n.11 (4th Cir. 2002).                                    “Failure to

comply with the specific dictates of this rule with respect to a

particular claim triggers abandonment of that claim on appeal.”

Edwards v. City of Goldsboro, 178 F.3d 231, 241 n.6 (4th Cir.

1999) (emphasis added) (citing Fed. R. App. P. 28(a)(9)(A)); see

also Stevenson v. City of Seat Pleasant, 743 F.3d 411, 416 (4th

Cir. 2014) (holding that the appellants “waived any challenge”

to the district court’s dismissal of multiple claims by failing

to present arguments on appeal regarding those claims); Bocek v.

JGA    Assocs.,        LLC,    537    F.     App’x       169,     174   (4th       Cir.    2013)

(“Because      [the     plaintiff’s]         position       on       appeal    is    that    the

defendants’ . . . actions breached the Straw Purchase Agreement,

not the Consulting Agreement, we are constrained to conclude

that [the plaintiff] has waived any breach of contract claim

premised     on    a    breach       of    the    Consulting         Agreement.”).           The

purpose of this rule “is to avoid unfairness to an appellee and

minimize     the   ‘risk       of    an    improvident          or   ill-advised          opinion

being issued on an unbriefed issue.’”                       Brown v. Nucor Corp., 785
F.3d 895, 920 (4th Cir. 2015) (quoting United States v. Leeson,

453 F.3d 631, 638 n.4 (4th Cir. 2006)).

       Here,    prior     to    the       one-sentence          assertion     in    its    reply

brief, Forest had given no indication that it was pursuing a

claim based on a breach of contract.                            Indeed, Forest concedes

that    it     “brought       its     action          against    BlackRock         based    upon

                                                 18
BlackRock’s conversion of Forest’s funds.”                                   Reply Br. at 15.

Notably, Forest did not move in the district court to amend its

complaint to allege the claim for breach.                                Rather, Forest has

insisted     throughout          the   litigation           that      BlackRock’s       liability

arose out of ignoring the notification letter and wrongfully

transferring funds to PP&G, a purported conversion and violation

of    the    UCC.         See,    e.g.,       J.A.    16     (“The . . .            transfers    by

BlackRock to PP&G at the request of Pearsall, despite the clear

instructions in the Notification Letter, amount to conversion by

defendant     BlackRock.”);            J.A.     17    (“BlackRock            transferred       funds

from   the    BlackRock          Account      directly       to       PP&G    in    violation    of

§ 9-607 . . . .”);           J.A.      18     (“BlackRock             paid    funds     from    the

BlackRock         Account         directly           to      PP&G       in         violation      of

§ 9-406 . . . .”); J.A. 426 (Forest stating in a heading of its

memorandum in opposition to BlackRock’s motion to dismiss, “The

Control Agreement Does Not Affect Forest’s Rights”); Appellant’s

Br. at 3      (“BlackRock failed to honor the notice it had received

pursuant     to     UCC    §§ 9-406       and    9-607          and    improperly       disbursed

funds to PP&G . . . .” (emphasis added)); id. at 6-7 (“BlackRock

disregarded the clear and unambiguous terms contained in the

Notification        and     made       payments           directly      to     PP&G    from     the

BlackRock Account[,] . . . thereby depriving Forest of its right

to those funds.            BlackRock’s failure to abide by the terms of

the    Notification         was    a    violation          of    both        UCC    §§ 9-406    and

                                                19
9-607.”     (emphasis     added)    (citations         omitted));       id.      at    8

(“Forest’s    Complaint     sufficiently        set   forth   viable      causes      of

action for each of its claims against BlackRock, all of which

arise out of BlackRock’s failure to comply with its obligations

under the UCC.” (emphasis added)).

      We decline to consider Forest’s belated breach-of-contract

claim.

                                      B.

      Next, Forest objects to the dismissal of its conversion

claim.     According to the complaint, BlackRock converted Forest’s

funds when it transferred them to PP&G rather than to Forest.

J.A. 16.     The district court dismissed the claim because Forest

did not allege that BlackRock converted funds “for its own use

and   benefit.”        Forest   Capital,    2015 WL 874611,   at    *1.        In

addition to defending the district court’s holding, BlackRock

argues that it did not exercise the necessary control over the

funds or commit any wrongful act, and that the property Forest

is seeking to recover is intangible and therefore not subject to

conversion.    Because we agree with this last argument, we do not

reach the others.

      Conversion in Maryland has two elements: “a physical act

combined    with   a   certain   state     of    mind.”       Darcars     Motors      of

Silver Spring, Inc. v. Borzym, 841 A.2d 828, 835 (Md. 2004).

“The physical act can be summarized as ‘any distinct act of

                                      20
ownership or dominion exerted by one person over the personal

property of another in denial of his right or inconsistent with

it.’”   Id. (quoting Allied Inv. Corp. v. Jasen, 731 A.2d 957,

963 (1999)).       The intent element is satisfied by “a wide range

of different states of mind,” but “[a]t a minimum, a defendant

liable of conversion must have ‘an intent to exercise a dominion

or control over the goods which is in fact inconsistent with the

plaintiff’s    rights.’”        Id.    at    836    (quoting    Keys     v.    Chrysler

Credit Corp., 494 A.2d 200, 208 (Md. 1985)).

     Not    all     personal    property       is     subject      to     conversion.

Historically,      the   tort    was    confined      to     recovering        tangible

property, but over time it has expanded to cover some, but not

all, intangible property rights.              Dan B. Dobbs, et al., The Law

of Torts §§ 709-710 (2d ed. 2016); see Thompson v. UBS Fin.

Servs., Inc., 115 A.3d 125, 130-31 (Md. 2015).                       “Maryland law

does not recognize a tort claim for conversion of intangible

property    interests     unless      they    are    merged       into    a    tangible

document    over    which   the       defendant      exercises      some      form   of

ownership   or     dominion.”      Jasen, 731 A.2d   at    965.        Examples

include “a stock certificate, a promissory note, or a document

that embodies the right to a life insurance policy.”                          Thompson,
115 A.3d at 131 (citations omitted).

     Under Forest’s theory of the case, the property it seeks to

recover must be intangible.            If Forest had any right to receive

                                         21
money from BlackRock, it was because section 9-406 transferred

BlackRock’s       payment     obligation          from    PP&G    to    Forest.           And,

because section 9-406 applies only to obligations on accounts,

chattel     paper,    or    payment      intangibles—here,             only    a     payment

intangible is arguable—Forest had a right to payment only if

BlackRock     was    obligated     on   a    payment       intangible.         Because       a

payment intangible is, of course, intangible property, and here

it   was    not     “merged      into    a       tangible     document        over       which

[BlackRock]       exercise[d]     some       form    of     ownership,”       it     is    not

subject to conversion.           Jasen, 731 A.2d at 965.

     We pause here to note that the parties’ (and the amici’s)

briefs are devoted in large part to the question of whether

BlackRock     was     obligated     on       a     payment       intangible        and     was

therefore an account debtor under section 9-406.                              We need not

answer the question, as the conversion claim fails no matter who

is   right.          If    (as   Forest          contends)       BlackRock’s         payment

obligation was a payment intangible, then the type of property

at issue could not have been converted—it was intangible and

Forest never alleged it was merged into a document over which

BlackRock exercised dominion.                    And if (as BlackRock contends)

the obligation was not a payment intangible, then section 9-406

did not apply, the notification letter had no effect, and the

transfer to PP&G did not interfere with Forest’s rights.                                    In

either case, Forest could not state a claim for conversion.

                                             22
       To avoid this conclusion, Forest attempts to have it both

ways,      characterizing             the     property         interest        as     a    payment

intangible for the purposes of applying section 9-406, but as

money for the purposes of the conversion claim.                                    See Reply Br.

at    21   (“The        payment       intangible       is   the    property         interest—the

monetary obligation which attached to the funds once [ISO-NE]

released its interest.”).                     For, although money is generally an

intangible not subject to conversion, an exception exists for

“specific segregated or identifiable funds.”                                Jasen, 731 A.2d at

966.         But    having        conceded        that      BlackRock’s         only      possible

obligation         to    Forest       was   on    a    payment    intangible,            Forest    is

stuck with the fact that a payment intangible is by definition

not    money.           See    § 9-102(42)        (defining       a    general        intangible,

which        includes          payment         intangibles,            as      “any        personal

property, . . .               other      than . . .            money”).             Accordingly,

regardless         of    whether        the      transferred       funds       were       “specific

segregated or identifiable funds,” Forest asserts no interest in

them.         Its       asserted       interest        is   in    payment,          not    in     any

particular money.

       For    this       reason,       Forest’s        reliance       on    Franklin       American

Mortgage Co. v. Sanford Title Services, LLC, No. RDB 10-920,

2011 WL 310469 (D. Md. Jan. 26, 2011), is misplaced.                                   There, the

plaintiff, a mortgage company, alleged that it wired money to a

closing      agent,       who     failed         to    apply     the       money    to    pay     off

                                                  23
mortgages and closing costs as it had promised.                       Id. at *1.

According to the court, this money-based conversion claim could

go forward because it met “an exception for a conversion action

seeking    funds    that    were   or   should     have    been   segregated   into

separate    accounts.”        Id.   at     *4.      Unlike    the    plaintiff   in

Franklin American, Forest did not give funds to BlackRock that

were diverted from their intended purpose.                   We do not see how

the case would apply to the facts here, where Forest claims a

right to payment rather than to specific funds.

                                          C.

     Forest also takes issue with the district court’s denial of

its request to amend its complaint.                 Because the issue Forest

wished to address in an amended complaint—whether the BlackRock

funds     were     “prepayments”        excluded     from    Forest’s    security

interest—is not relevant to our disposition of Forest’s claims,

we need not decide whether the district court erred.

                                          D.

     Finally,      Forest    contends     that     the    district   court   should

have granted its “Motion to Reconsider and/or to Reargue,” which

sought relief under either Rule 59(e) or 60(b) of the Federal

Rules of Civil Procedure.

     We would ordinarily review the district court’s decision on

a motion under Rule 59(e) or 60(b) for an abuse of discretion.

See Pac. Ins. Co. v. Am. Nat’l Fire Ins. Co., 148 F.3d 396, 402

                                          24
(4th Cir. 1998) (Rule 59(e)); McLawhorn v. John W. Daniel & Co.,

924 F.2d 535, 538 (4th Cir. 1991) (Rule 60(b)).           But because we

are also reviewing the underlying grant of BlackRock’s motion to

dismiss, we have already considered the merits of the judgment

under a de novo standard, which is of course more favorable to

Forest than a review for abuse of discretion. 4          Accordingly, we

need       not   decide   whether   the    district   court   abused   its

discretion.       See Stevenson, 743 F.3d at 416 (applying de novo

review where notice of appeal sought review of summary-judgment

order as well as Rule 59(e) and Rule 60(b) orders).

                                    III.

       We affirm the district court’s judgment dismissing Forest’s

claims under the UCC and for conversion.

                                                                 AFFIRMED

       4
       Forest’s motion also addressed the district court’s denial
of its request to amend, which we would review for abuse of
discretion, see Francis v. Giacomelli, 588 F.3d 186, 197 (4th
Cir. 2009); as we have explained, we need not address the issue.

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