L2 Family Foundation Inc. et al v. American Bank et al

MOTION for Summary Judgment as to Plaintiffs Ray Lewis, L2 Family Foundation Inc., Keon Lattimore, Kadaja Holloway and Sunseria Smith

D. Md.November 14, 2016

DMEAST #27527107 v1 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND (Northern Division) L2 FAMILY FOUNDATION, et al., Plaintiffs v. CONGRESSIONAL BANK, et al., Defendants. * * * * * * * * * * * Civil Action No. 1:16-CV-815-GLR * * * * * * * * * * * * * MOTION OF DEFENDANTS FOR SUMMARY JUDGMENT AS TO PLAINTIFFS RAY LEWIS, L2 FAMILY FOUNDATION, INC., KEON LATTIMORE, KADAJA HOLLOWAY, AND SUNSIERA SMITH Pursuant to Rule 56 of the Federal Rules of Civil Procedure, Defendants Congressional Bank, as successor by merger to American Bank, and Kweku Parker, by their undersigned attorneys, respectfully move this Court for the entry of summary judgment in its favor and against Plaintiffs Ray Lewis, L2 Family Foundation, Inc., Keon Lattimore, Kadaja Holloway, and Sunsiera Smith on all counts of the Complaint because there is no genuine dispute as to any material fact and Defendants are entitled to judgment as a matter of law. The reasons for this motion are set forth in the attached Memorandum of Law. WHEREFORE, Defendants Congressional Bank, as successor by merger to American Bank, and Kweku Parker respectfully request the following relief: A. That summary judgment be entered in favor of Defendants Congressional Bank, as successor by merger to American Bank, and Kweku Parker and against Plaintiffs Ray Lewis, L2 Family Foundation, Inc., Keon Lattimore, Kadaja Holloway, and Sunsiera Smith on all counts of Plaintiffs’ Complaint; and Case 1:16-cv-00815-GLR Document 37 Filed 11/14/16 Page 1 of 3 DMEAST #27527107 v1 2 B. That Defendants Congressional Bank and Kweku Parker be granted such other and further relief as is just and equitable. Dated: November 14, 2016. Respectfully submitted, _/s/_____________________________ Timothy F. McCormack Fed. Bar No. 03565 John D. Sadler Fed. Bar No. 16421 Michelle McGeogh Fed. Bar No. 28778 Ballard Spahr, LLP 300 East Lombard Street, 18th Floor Baltimore, Maryland 21202 Tel: (410) 528-5600 Fax: (410) 528-5650 E-mail: mccormackt@ballardspahr.com sadlerj@ballardspahr.com mcgeoghm@ballardspahr.com Counsel for Defendants Case 1:16-cv-00815-GLR Document 37 Filed 11/14/16 Page 2 of 3 DMEAST #27527107 v1 3 CERTIFICATE OF SERVICE This is to certify that on this 14th day of November 2016, I caused a true and correct copy of the foregoing to be served, via electronic case filing to: Shanell K. Harleston, Esquire 8865 Fawn Ridge Drive Fort Myers, FL 33912 Counsel for Plaintiffs Alex M. Allman, Esquire Offit Kurman, P.A. 300 E. Lombard St., Suite 2010 Baltimore, MD 21202 Counsel for Plaintiff Lewis /s/ Timothy F. McCormack Case 1:16-cv-00815-GLR Document 37 Filed 11/14/16 Page 3 of 3 DMEAST #27464927 v3 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND (Northern Division) L2 FAMILY FOUNDATION, et al., Plaintiffs v. CONGRESSIONAL BANK, et al., Defendants. * * * * * * * * * * * Civil Action No. 1:16-CV-815-GLR * * * * * * * * * * * * * MEMORANDUM IN SUPPORT MOTION OF DEFENDANTS FOR SUMMARY JUDGMENT AS TO PLAINTIFFS RAY LEWIS, L2 FAMILY FOUNDATION, INC., KEON LATTIMORE, KADAJA HOLLOWAY AND SUNSERIA SMITH I. INTRODUCTION The claims brought by Plaintiffs Ray Lewis, the L2 Family Foundation, Inc. (the "Lewis Family Foundation"); Ray Lewis's brother, Keon Lattimore; Ray Lewis's sister, Kadaja Holloway; and Ray Lewis's mother, Sunseria Smith (collectively, "Plaintiffs") are premised on the existence of an unwritten contract between American Bank1 (the “Bank”) and the Plaintiffs, whereby Plaintiffs allege that the Bank agreed to pay the Lewis Family Foundation the sum of $1,000,000.00 per year for five years and an additional $10,000.00 per month for one year. These payments, Plaintiffs allege, was in return for the Lewis Family Foundation agreeing to give the Bank right of first refusal on all mortgages arising from the “52 Homes 52 Families” initiative. These allegations are false. There is no evidence to support any of them. The Bank did not, and would not ever, agree to such an arrangement. There is no genuine dispute of fact here 1 Congressional Bank, the current Defendant, is the successor by merger to American Bank. Case 1:16-cv-00815-GLR Document 37-1 Filed 11/14/16 Page 1 of 20 DMEAST #27464927 v3 2 because there was no contract. The Defendants are entitled to summary judgment on all counts brought by these Plaintiffs. II. STATEMENT OF UNDISPUTED FACTS Plaintiff Ray Lewis and his foundation, together with various members of Ray Lewis's family that also have roles in the Lewis Family Foundation, brought this action against the Bank and Defendant Kweku Parker (collectively, the “Defendants”), alleging a litany of claims that are not supported by fact or law. The claims are premised on the unsupported allegation that Defendants and the Lewis Family Foundation had an unwritten contract in which American Bank (the "Bank") agreed to provide to the Lewis Family Foundation "(1) [free] office space; (2) a [free] place to conduct classes and seminars; (3) $1,000,000.00 per year for 5 years; and (4) $10,000.00 per month for 1 year for the '52 Homes 52 Families' community initiative." Complaint, ECF 22 at ¶ 24. Ray Lewis, has brought the following claims against both the Bank and Kweku Parker ("Parker"): (i) fraud; (ii) false representation; (iii) negligence; (iv) negligent hiring; (v) negligent misrepresentation; (vi) appropriation of name or likeness; (vii) false light; (viii) respondeat superior- intentional tort. The Lewis Family Foundation brought the following claims against both the Bank and Parker: (i) breach of contract; (ii) material breach of contract; (iii) fraud in the inducement; (iv) fraud; (v) false representation; (vi) negligence; (vii) negligent hiring; (viii) respondeat superior – intentional tort; (ix) violation of RESPA. Ray Lewis's half-brother and co-founder of the Lewis Family Foundation, Keon Lattimore, brought the following claims against both the Bank and Parker: (i) breach of contract; (ii) fraud; (iii) false representation; (iv) negligence; (v) negligent hiring; (vi) negligent misrepresentation; (vii) appropriation of name or likeness; (viii) false light; (ix) respondeat Case 1:16-cv-00815-GLR Document 37-1 Filed 11/14/16 Page 2 of 20 DMEAST #27464927 v3 3 superior – intentional tort. Affidavit of Kweku Parker ("Parker Aff."), attached hereto as Exhibit A, at ¶ 10. Ray Lewis's sister, and Vice President of the Lewis Family Foundation, Kadaja Holloway, brought the following claims against both the Bank and Parker: (i) breach of contract; (ii) fraud; (iii) false representation; (iv) negligence; (v) negligent hiring; (vi) negligent misrepresentation; (vii) appropriation of name or likeness; (viii) false light; (ix) respondeat superior – intentional tort. Ray Lewis's mother and President of the Lewis Family Foundation, Sunseria Smith, brought the following claims against both the Bank and Parker: (i) fraud; (ii) false representation; (iii) negligent hiring; (iv) appropriation of name or likeness; (v) false light. Defendant Parker worked for American Bank from September 2014 to July 2015 as the Director of Residential Lending in Maryland. Parker Aff., Ex. A, at ¶ 2. His duties included supervising and overseeing the origination of mortgage loans, hiring and supervising staff, and overseeing the Hunt Valley American Bank branch. Parker Aff., Ex. A, at ¶ 3. Parker has over 18 years of real estate finance experience and holds a baccalaureate degree from Marylhurst University. Parker Aff., Ex. A, at ¶ ¶ 5, 6. Parker is a member of the National Association of Mortgage Professionals. Parker Aff., Ex. A, at ¶ 6. Parker is experienced in lending, originating mortgage loans and overseeing lending staff. Affidavit of Don Gallo ("Gallo Aff.") attached hereto as Exhibit B, at ¶ 6. Parker was well-qualified for the position of Director of Residential Lending. Gallo Aff., Ex. B at ¶ 7. Before joining American Bank, Parker explored a number of options for the possible location of the American Bank branch and ultimately chose the Hunt Valley location due to its location near public transportation. Parker Aff., Ex. A, at ¶ 7. At all times, Defendant Parker Case 1:16-cv-00815-GLR Document 37-1 Filed 11/14/16 Page 3 of 20 DMEAST #27464927 v3 4 acted within the scope of his employment with American Bank. Parker Aff., Ex. A, at ¶ 4; Gallo Aff., Ex. B at ¶ 8. Once he began working for American Bank, representatives of the Lewis Family Foundation reached out to Parker because their relationship with their investor, Vant Capital, was failing and the Lewis Family Foundation was seeking donations to fund operations. Parker Aff., Ex. A, at ¶¶ 8, 9. At the time, Keon Lattimore was employed by Vant Capital. Parker Aff., Ex. A, at ¶ 10. After the Lewis Family Foundation connected with Parker, Parker assisted the Lewis Family Foundation in obtaining two charitable donations from American Bank, totaling $20,000. Parker Aff., Ex. A, at ¶ 11; February 2, 2015 Letter from Lewis Family Foundation, attached hereto as Exhibit C (thanking American Bank for the "sponsorship/donation"). The Lewis Family Foundation created a number of video advertisements for the foundation in which representatives of the Lewis Family Foundation appeared on television to promote the foundation. Parker Aff., Ex. A, at ¶ 12. There were no American Bank advertisements featuring the Lewis Family Foundation or any of Ray Lewis, Keon Lattimore, Kadaja Holloway or Sunseria Smith. Parker Aff., Ex. A, at ¶ 13. Neither Parker nor American Bank asked any of Ray Lewis, Keon Lattimore, Kadaja Holloway or Sunseria Smith to appear in any advertisement for American Bank. Parker Aff., Ex. A, at ¶ 14. Neither Parker nor American Bank ever used the likeness of any Plaintiff to promote the business of Parker or American Bank. Parker Aff., Ex. A, at ¶ 15. American Bank did not have a written or unwritten contract with the Lewis Family Foundation, or with Ray Lewis, Keon Lattimore, Kadaja Holloway or Sunseria Smith. Parker Aff., Ex. A, at ¶ 16. American Bank simply made two voluntary charitable donations to the Lewis Family Foundation. Parker Aff., Ex. A, at ¶ 11. Neither American Bank nor Parker made Case 1:16-cv-00815-GLR Document 37-1 Filed 11/14/16 Page 4 of 20 DMEAST #27464927 v3 5 any promises, written or unwritten, to the Lewis Family Foundation or any of Ray Lewis, Keon Lattimore, Kadaja Holloway or Sunseria Smith. III. ARGUMENT A. Summary Judgment Standard The court shall grant summary judgment “if the pleadings, depositions, answers to interrogatories, and submissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(c). Summary judgment must be granted “against a party who fails to make a showing sufficient to establish an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Carett, 477 U.S. 317, 322 (1986). Once a party has made a properly-supported motion for summary judgment, the opposing party may not simply rest upon the pleadings, but must instead submit evidentiary materials which “set forth specific facts showing that there is a genuine issue for trial.” Fed. R. Civ. P. 56(e). The nonmoving party bears the burden of demonstrating that a genuine issue of material fact exists. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986). It is not the duty of the court to scour the record in search of evidence to defeat a motion for summary judgment; rather, the nonmoving party bears the responsibility of identifying the evidence upon which she relies. Bombard v. Fort Wayne Newspapers, Inc., 92 F.3d 560, 562 (7th Cir. 1996). Critically, a plaintiff “cannot create a genuine issue of material fact through mere speculation or the building of one inference upon another.” Beale v. Hardy, 769 F.2d 213, 214 (4th Cir. 1985). Rather, she must produce some evidence (more than a mere scintilla) “upon which a [fact finder] could properly proceed to find a verdict for the party producing it, upon Case 1:16-cv-00815-GLR Document 37-1 Filed 11/14/16 Page 5 of 20 DMEAST #27464927 v3 6 whom the onus of proof is imposed.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 (1986). “[T]his standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514, 519 (4th Cir. 2003). When the moving party has met the standard of Rule 56, summary judgment is required. Celotex Corp., 477 U.S. at 322-23. B. Count One: Breach of Contract “It is well-established in Maryland that a complaint alleging a breach of contract ‘must of necessity allege with certainty and definiteness facts showing a contractual obligation owed by the defendant to the plaintiff and a breach of that obligation by defendant.’ ” RRC Northeast, LLC v. BAA Maryland, Inc., 413 Md. 638, 655, 994 A.2d 430, 440 (2010) (quoting Continental Masonry Co. v. Verdel Constr. Co., 279 Md. 476, 480, 369 A.2d 566, 569 (1977)). Absent an underlying contract, there can be no breach. See Antonio v. Security Servs. of Am., LLC, 701 F. Supp. 2d 749, 761 (D. Md. 2010) (“In order to recover on a breach of contract claim, a plaintiff must prove that two or more partied formed a contract. . . .”). Here, neither the Bank nor Parker and had a contract with the Lewis Family Foundation. Parker Aff., Ex. A, at ¶ 16. With no contract, there can be no claim for breach of contract. Additionally, Plaintiffs cannot prevail on a breach of contract theory because any contract was required to have been written pursuant to the one-year rule of the statute of frauds. See MD. CODE ANN., CTS. & JUD. PROC. § 5-901 (requiring a contract or agreement to be in writing if it cannot be performed within 1 year of its making). Here, the Complaint states that the alleged “contract” called for Defendants to provide “(3) $1,000,000.00 per year for 5 years.” Case 1:16-cv-00815-GLR Document 37-1 Filed 11/14/16 Page 6 of 20 DMEAST #27464927 v3 7 Compl. ¶ 24. The statute of frauds required the alleged “contract” to be in writing because it was for a term of five years. The unwritten “contract” on which Plaintiffs base Count I of the Complaint (and, indeed, all of their claims) simply never existed. There is no dispute of fact; the breach of contract claim fails as a matter of law. C. Count Two: Material Breach of Contract “Material breach of contract” is not an independent cause of action under Maryland law. Therefore, the Defendants are entitled to judgment as a matter of law on Count Two. Instead, “material breach of contract” is an element that must be pled as part of an action for rescission. See Convenience Retailing, LLC v. Sunoco, Inc. (R&M), 2006 WL 3797927 (4th Cir. Md. Dec. 21, 2006) ([“Plaintiff] contends that it is entitled to rescission based on a material breach of the Agreement by Sunoco.”); see also Plitt v. McMillan, 244 Md. 450, 454, 223 A.2d 772, 774 (1966) (“Where. . . there has been a material breach of a contract by one party, the other party has a right to rescind it.”). Here, because a claim for "material" breach of contract does not exist under governing law, this claim fails. Even if it were a valid claim, because there is no underlying contract, there is neither a contract to rescind nor is there a contract to be breached. D. Count Three: Fraud in the Inducement Count III alleges that the Defendants deceitfully induced Plaintiffs into entering the non-existent and unwritten “agreement” to fund the Lewis Family Foundation's “52 Homes 52 Families” initiative. Complaint ¶ 62. The Defendants are entitled to summary judgment on this claim because, as stated above, no agreement or contract (written or unwritten) existed into which Plaintiffs could have been fraudulently induced. Case 1:16-cv-00815-GLR Document 37-1 Filed 11/14/16 Page 7 of 20 DMEAST #27464927 v3 8 A fraud in the inducement claim is a “subspecies of fraud.” Sass v. Andrew, 152 Md. App. 406, 431 (2003). The elements for fraud and fraud in the inducement are thus the same, with the exception that fraud in the inducement requires the additional element that the defendant’s promise induced the plaintiff to enter into a contract. Due Forni LLC v Euro Rest. Sol., Inc., 2016 WL 1222507, at *2 (D. Md. Mar. 29, 2016). Here, because there is no underlying contract, there can be no fraudulent inducement. Even if the Plaintiffs were able to prove the existence of the alleged unwritten contract, this claim would fail because “a plaintiff must show that the defendant ‘enter[ed] an agreement to do something, without the present intention of performing.’ ” Id. (quoting Appel v. Hupfield, 84 A.2d 94 (Md. 1951)). The defendant’s intent must be shown by a misrepresentation “made prior to the consummation of the contract.” Sherwin-Williams Co. v. Coach Works Auto Collision Repair Ctr., Inc., 2011 WL 709714, at *8 (D. Md. Feb. 22, 2011). Here, Plaintiffs failed to plead any factual details pertaining to the Defendants’ intent to deceive prior to the formation of the alleged “contract.” Instead, Plaintiff asserts factually unsupported conclusory statements regarding the Defendants’ state of mind. Without the existence of an agreement or any factual support for the Defendants’ intent to deceive, judgment must be entered on Count III for Defendants. E. Count Four: Fraud or Deceit A claim of fraud is subject to Fed. R. Civ. Pro. 9(b), which requires the plaintiff to “state with particularity the circumstances constituting fraud or mistake.” This heightened pleading standard is satisfied when the plaintiff specifies the “time, place, and contents of the false representation, as well as the identity of the person making the misrepresentation and what he obtained thereby.” Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 784 (4th Cir. 1990). Case 1:16-cv-00815-GLR Document 37-1 Filed 11/14/16 Page 8 of 20 DMEAST #27464927 v3 9 Here, Plaintiffs fail to allege the time, the place, or the contents of the alleged misrepresentation. Plaintiffs vaguely allege “Defendants made several false representations of material fact” (Compl. ¶ 70) but fail to state to whom the representations were made, when they were made, or where they were made. Rule 9(b) protects Defendants from these exact types of factually unsupported claims: First, the rule ensures that the defendant has sufficient information to formulate a defense by putting it on notice of the conduct complained of.... Second, Rule 9(b) exists to protect defendants from frivolous suits. A third reason for the rule is to eliminate fraud actions in which all the facts are learned after discovery. Finally, Rule 9(b) protects defendants from harm to their goodwill and reputation. Id. (citing United States ex rel. Stinson, Lyons, Gerlin & Bustamante, P.A. v. Blue Cross Blue Shield of Georgia, Inc., 755 F. Supp. 1055, 1056–57 (S.D. Ga. 1990). This claim fails to meet the standards and purposes of Rule 9(b) because Defendants are unable to formulate a defense against an allegation that is wholly devoid of factual support or detail. Simply put, there are no facts to support a fraud claim. Count IV fails as a matter of law. F. Count Five: False Representation Maryland does not recognize an independent cause of action for false representation. The making of a false representation alone is not actionable, rather, it is one of the five elements required to prove fraud, which require the plaintiff to show: (1) the defendant made a false representation to the plaintiff, (2) the falsity of the representation was either known to the defendant or the representation was made with reckless indifference to its truth, (3) the misrepresentation was made for the purpose of defrauding the plaintiff, (4) the plaintiff relied on the misrepresentation and had the right to rely on it, and (5) the plaintiff suffered compensable injury as a result of the misrepresentation. Case 1:16-cv-00815-GLR Document 37-1 Filed 11/14/16 Page 9 of 20 DMEAST #27464927 v3 10 Hoffman v. Stamper, 385 Md. 1, 28, 867 A.2d 276, 292 (2005) (citing Nails v. S & R, 334 Md. 398, 415, 639 A.2d 660, 668 (1994)) (emphasis added). When a plaintiff pleads a cause of action that is not recognized under Maryland law, “it is beyond doubt that Plaintiff cannot state a claim for relief.” Knox v. State Farm Fire & Cas. Co., 2005 WL 1075388, at *2 (D. Md. May 5, 2005) (dismissing claim for negligent infliction of emotional distress because it is not a recognized cause of action in Maryland). Because this claim, like Count II, is not an actionable claim in the state of Maryland, the Court should grant summary judgment in favor of Defendants. G. Count Six: Negligence Plaintiffs cannot bring a claim for negligence against Defendants because they cannot establish the fundamental first element: that there was “a duty owed.” Jacques v. First Nat. Bank of Maryland, 307 Md. 527, 531, 515 A.2d 756, 758 (1986) (reciting the four elements of negligence under Maryland law: duty, breach, causation, and damages). The Bank’s act of making two charitable donations to the Lewis Family Foundation did not create a duty of care between the parties. Tacitly recognizing the futility of this claim, Plaintiffs do not even state the existence or origination of any duty owed in the Complaint. Although unclear from the pleadings, Plaintiffs appear to premise the duty of care upon the existence of the alleged unwritten “agreement” reached between the Lewis Family Foundation and the Bank with respect to the “52 Families 52 Homes” initiative. As discussed, the parties never entered into an agreement, a contract, or any other unwritten agreement related to the Lewis Family Foundation’s initiative. Even if the parties did enter into a contract, the formation of a contract between two parties does not on its own give rise to an action in tort. See Mesmer v. Md. Auto. Ins. Fund, 725 A.2d 1053, 1058, 353 Md. 241, 253 (1999) (“A contractual obligation, by itself, does not Case 1:16-cv-00815-GLR Document 37-1 Filed 11/14/16 Page 10 of 20 DMEAST #27464927 v3 11 create a tort duty. Instead, the duty giving rise to a tort action must have some independent basis.”); see also Knox v. State Farm Fire & Cas. Co., No. CIV.A. DKC 2004-2962, 2005 WL 1075388, at *2 (D. Md. May 5, 2005) (“It is clear that under Maryland law, “a breach of contract does not typically give rise to an action in tort.” (quoting Hartz v. Liberty Mut. Ins. Co., 269 F.3d 474, 476 (4th Cir. 2001)). The Plaintiffs only remedy for pursuing damages because of a failure to perform the contract is under contract law. See Knox v. State Farm Fire & Cas. Co., No. CIV.A. DKC 2004-2962, 2005 WL 1075388, at *2 (D. Md. May 5, 2005) (“Generally, where the essence of a relationship is contractual and the essence of the claimed dereliction by a defendant is failure to perform the contract, a cause of action arising from such dereliction is not available in tort but is available only in contract.” (quoting Parks v. CAI Wireless Sys., Inc., 85 F. Supp. 2d 549, 556 (D. Md. 2000)). Because Plaintiffs failed to plead the existence of any duty owed and because remedies for breaches of the alleged unwritten agreement (if one ever existed) lie in contract rather than tort, Defendants are entitled to summary judgment as to the claim of negligence. H. Count Seven: Liability for Negligent Hiring The claim for negligent hiring fails because the Bank satisfied its duty to reasonably inquire into Parker’s background and because Parker’s background demonstrated that he was competent to perform the duties for which he was hired. Case 1:16-cv-00815-GLR Document 37-1 Filed 11/14/16 Page 11 of 20 DMEAST #27464927 v3 12 To establish a claim for negligent hiring, the plaintiff must prove: (1) the existence of an employment relationship; (2) the employee's incompetence;(2) the employer's actual or constructive knowledge of such incompetence; (3) the employee's act or omission causing the plaintiff's injuries; and (4) the employer's negligence in hiring or retaining the employee as the proximate cause of plaintiff's injuries. State v. Jones, 197 Md. App. 638, 669–70, 14 A.3d 1223, 1241 (2011), rev'd on other grounds, 425 Md. 1, 38 A.3d 333 (2012) (citing Henley v. Prince George's County, 60 Md.App. 24, 36, 479 A.2d 1375 (1984)). An employer therefore has a duty “to use reasonable care to select employees competent and fit for the work assigned to them and to refrain from retaining the services of an unfit employee.” Perry v. Asphalt & Concrete Servs., 447 Md. 31, 52 (2016). This duty is referred to as the employer’s duty to “reasonably inquire” into the applicant’s background. Id. Here, the Bank satisfied its duty because it thoroughly inquired into Parker’s background and qualifications and those qualifications (including Parker's 18 years' of experience) demonstrated that he was well-suited and qualified for the position of Director of Residential Lending. Gallo Aff., Ex. B at ¶ 7. Because the Plaintiffs cannot produce evidence demonstrating that Parker was incompetent, that the Bank knew of any incompetence, or that the Bank failed to reasonably inquire into the employee’s background, Plaintiffs cannot meet the required elements of a negligent hiring claim against the Bank.2 2 Plaintiffs also appear to bring a claim of negligent hiring against Parker, asserting that Parker was negligently hired by the Bank. For obvious reasons, such a claim against an employee is not supported by law. Case 1:16-cv-00815-GLR Document 37-1 Filed 11/14/16 Page 12 of 20 DMEAST #27464927 v3 13 I. Count Eight: Negligent Misrepresentation Plaintiffs’ claim for negligent misrepresentation fails because Plaintiffs have not—and cannot—allege any facts supporting the existence of a duty of care that could have been breached. To assert a claim for negligent misrepresentation the plaintiff must show: “(1) the defendant, owing a duty of care to the plaintiff, negligently asserts a false statement; (2) the defendant intends that his statement will be acted upon by the plaintiff; (3) the defendant has knowledge that the plaintiff will probably rely on the statement, which, if erroneous, will cause loss or injury; (4) the plaintiff, justifiably, takes action in reliance on the statement; and (5) the plaintiff suffers damage proximately caused by the defendant's negligence.” Lloyd v. Gen. Motors Corp., 397 Md. 108, 135–36, 916 A.2d 257 (2007) (emphasis added). Courts in Maryland do not generally entertain actions for negligent misrepresentation in the commercial context. Blue Circle Atl., Inc. v. Falcon Materials, Inc., 760 F. Supp. 516, 519 (D. Md. 1991), aff'd, 960 F.2d 145 (4th Cir. 1992) (“[A]ccordingly, a claim of negligent misrepresentation causing economic loss in the course of a commercial transaction or relationship, at least where the parties are merchants, ought not be entertained.”); see also Flow Indus., Inc. v. Fields Const. Co., 683 F. Supp. 527, 529 (D. Md. 1988) (“[I]f the risk created by negligent conduct is no greater than one of economic loss, generally no tort duty will be found absent of showing of privity or its equivalent.”). The reason that Maryland courts are less likely to impose negligent misrepresentation liability when the plaintiff’s harm is only pecuniary is because such harm is less foreseeable and potential exposure is broader. White, 110 A.3d at 749; see also Vill. of Cross Keys, Inc. v. U.S. Gypsum Co., 556 A.2d 1126, 1133 (Md. 1989) (“[L]iability for negligent Case 1:16-cv-00815-GLR Document 37-1 Filed 11/14/16 Page 13 of 20 DMEAST #27464927 v3 14 misrepresentation resulting only in pecuniary loss is more restricted than that for negligent misrepresentation resulting in physical harm.”). Here, the Plaintiffs only alleged harm is economic and the parties were two commercial entities dealing at arm’s length that were not in privity with one another. The Bank's generous donation to the Lewis Family Foundation simply cannot support a negligent misrepresentation claim or the creation of any duty to the Plaintiffs. These facts demonstrate that Plaintiffs cannot satisfy the first element of any requisite duty of care being owed. Moreover, regarding the second elements, there is no evidence that Defendants made a false statement to have caused the Plaintiffs’ harm. J. Count Nine: Appropriation of Name or Likeness Ray Lewis's invasion of privacy tort claim fails because Lewis’s likeness was never used by the Bank or Parker; it was only used in advertising to benefit his own foundation. Second, the remaining plaintiffs (Smith, Lattimore, and Holloway) do not have identities of commercial value that make them eligible to bring this claim. Appropriation requires the intentional taking, for one’s benefit, without consent, of another’s name or likeness. See generally Lawrence v. A.S. Abell Co., 299 Md. 697, 707, 475 A.2d 448, 453 (1984) (citing RESTATEMENT (SECOND) OF TORTS § 652A). Lewis cannot claim appropriation where the only videos with his image were created for the benefit of his own foundation, which he appeared in on his own volition. Lewis consented to the production of these videos because he made them for his foundation. The Bank did not misappropriate Ray Lewis's likeness and did not use Ray Lewis's likeness in any bank commercials or advertisements. Because the videos were made to benefit his own foundation, Lewis also cannot satisfy the requirement that the appropriation be only for the benefit of the defendant. Parker Aff., Ex. A at ¶ 12. Case 1:16-cv-00815-GLR Document 37-1 Filed 11/14/16 Page 14 of 20 DMEAST #27464927 v3 15 The claims brought by Smith, Lattimore and Holloway fail for the same reason – there simply were no videos or advertisements using the likenesses of Smith, Lattimore or Holloway made to benefit the Bank. Moreover, a prerequisite to bringing an appropriation action is that the plaintiff’s likeness has commercial value capable of being appropriated. Lawrence v. A.S. Abell Co., 299 Md. 697, 706, 475 A.2d 448, 453 (1984) (“The Restatement indicates that a person's name or likeness must have “commercial or other value” before an appropriation is actionable.”). Here, Plaintiffs Smith, Lattimore, and Holloway assert an appropriation claim on the conclusory justification that “Plaintiff [] is a public figure.” Compl. ¶ ¶ 302, 304, 306. None of the three plaintiffs provides factual support for their status as public figures, because their likenesses and names have no commercial value that could be appropriated. Without any commercial value to appropriate, the claim must fail.3 See Lawrence, 299 Md. at 706 (finding no appropriation because “in this case, the children's identity had no such proven “value.” They were not famous and, in fact, were not even professional models.”). K. Count Ten: False Light As adopted by the courts from the RESTATEMENT (SECOND) OF TORTS § 652A, false light occurs if the defendant places the plaintiff before the public in a false light where “(a) the false light in which the other person was placed would be highly offensive to a reasonable person, and (b) the actor had knowledge of or acted in reckless disregard as to the falsity of the publicized matter and the false light in which the other would be placed.” Bagwell v. Peninsula Reg'l Med. Ctr., 106 Md. App. 470, 514, 665 A.2d 297, 318 (1995). 3 Additionally, Plaintiff Lattimore produced in discovery only seven documents in one video clip to support his claim. The video he produced benefited the Lewis Family Foundation and only included the appearance of Ray Lewis. None of the seven documents that he produced support a claim for appropriation. To date, Plaintiff Lewis has not yet produced any documents in support his claims. Case 1:16-cv-00815-GLR Document 37-1 Filed 11/14/16 Page 15 of 20 DMEAST #27464927 v3 16 For each of the four plaintiffs, the Complaint states in conclusory fashion that they were placed “before the public in a false light,” see e.g., Compl.. ¶ 308, without going into any factual detail whatsoever concerning what was published or how it was “highly offensive to a reasonable person.” This claim is frivolous and unsupported by any facts. The Defendants 1) never put information before the public about the Plaintiffs, 2) never put false information before the public about the Plaintiffs, 3) and never placed the Plaintiffs in a false light that would be highly offensive to a reasonable person. All advertisements and videos about the “52 Homes 52 Families” initiative benefited the Lewis Family Foundation in support of the foundation's mission. Summary judgment must be entered for Defendants as to all Plaintiffs under this claim. L. Count Eleven: Respondeat Superior: Intentional Tort Under the theory of respondeat superior, an employer can be held liable for the acts of its employee only when that employee commits tortious acts within the scope of the employment relationship. Oaks v. Connors, 339 Md. 24, 30 (1995). The obvious prerequisite to respondeat superior liability is that there is a tortious act committed by the employee. Here, as discussed above, none of the tortious allegations against Mr. Parker have any merit whatsoever. The “intentional tort” allegations against Mr. Parker include the fraud and invasion of privacy claims, all of which fail as a matter of law. Absent an underlying intentional tort by the employee, there can be no respondeat superior liability for the employer. M. Count Twelve: Real Estate Settlement Procedures Act (RESPA) The Real Estate Settlement Procedures Act (“RESPA”) provides in Section 2607 of Title 12 of the United States Code states that: Case 1:16-cv-00815-GLR Document 37-1 Filed 11/14/16 Page 16 of 20 DMEAST #27464927 v3 17 No person shall give and no person shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person. 12 U.S.C. § 2607(a). To establish a violation of § 2607(a), one must show the following elements: “(1) a payment or thing of value; (2) given and received pursuant to an agreement to refer settlement business; and (3) an actual referral.” Galiano v. Fidelity National Title Insurance Co., 684 F.3d 309, 314 (2d Cir. 2012). Here, there was no “agreement to refer settlement business” to the Bank. The parties never entered into any agreement. The Bank made two donations to the Lewis Family Foundation on its own good will. The Bank did not do so on the condition of mortgage referrals. Recipients of the Lewis Family Foundation awards chose banks other than the Bank for their mortgages. Parker Aff., Ex. A at ¶ 17. For this reason alone, the claim fails. The facts of this case also do not support a finding of a RESPA violation because the arrangement did not violate the purpose of the statute. In the Findings and Purposes section, Congress wrote that one of the purposes for the statute’s creation was for the “elimination of kickbacks or referral fees that tend to increase unnecessarily the costs of certain settlement services.” 12 U.S.C. § 2601(b)(3). Congress was concerned that title companies would give lenders a kickback for referring the borrower to them, which would lead to higher costs for the borrower in the form of hidden costs to compensate for the kickback scheme. Here, although there was no agreement or contract between the parties, even if it were as Plaintiffs describe, the arrangement would not have increased transaction costs for consumers in violation of the statute’s purpose. Case 1:16-cv-00815-GLR Document 37-1 Filed 11/14/16 Page 17 of 20 DMEAST #27464927 v3 18 Summary judgment must be entered for Defendants because the Plaintiffs have no facts supporting when the alleged RESPA violations took place or what fees the Defendants charged as part of settlement services that were never performed. See Girgis v. Countrywide Home Loans, Inc., 733 F. Supp. 2d 835, 846 (N.D. Ohio 2010) (dismissing RESPA claim where “Plaintiffs provide no factual support for this allegation. They do not state the amount or date of the fees the Defendants allegedly charged them, nor do they provide any evidence that the Defendant charged any real estate settlement fees that were not actually for settlement services”); see also Sosa v. Chase Manhattan Mortgage Corp., 348 F.3d 979, 982 (11th Cir. 2003) (holding that plaintiffs failed to state claim under Section 8 of RESPA where they failed to provide factual allegations regarding creditor's accepting real estate settlement charge other than for services actually performed). IV. CONCLUSION For the foregoing reasons, this Court should grant Defendant Congressional Bank and Defendant Kweku Parker’s Motion for Summary Judgment, and enter judgment in favor of Defendants and against Plaintiffs Ray Lewis, L2 Family Foundation, Inc., Keon Lattimore, Kadaja Holloway and Sunseria Smith on all counts brought by them. Case 1:16-cv-00815-GLR Document 37-1 Filed 11/14/16 Page 18 of 20 DMEAST #27464927 v3 19 Dated: November 14, 2016. Respectfully submitted, _/s/_____________________________ Timothy F. McCormack Fed. Bar No. 03565 John D. Sadler Fed. Bar No. 16421 Michelle McGeogh Fed. Bar No. 28778 Ballard Spahr, LLP 300 East Lombard Street, 18th Floor Baltimore, Maryland 21202 Tel: (410) 528-5600 Fax: (410) 528-5650 E-mail: mccormackt@ballardspahr.com sadlerj@ballardspahr.com mcgeoghm@ballardspahr.com Counsel for Defendants Case 1:16-cv-00815-GLR Document 37-1 Filed 11/14/16 Page 19 of 20 DMEAST #27464927 v3 20 CERTIFICATE OF SERVICE This is to certify that on this 14th day of November 2016, I caused a true and correct copy of the foregoing to be served, via electronic case filing to: Shanell K. Harleston, Esquire 8865 Fawn Ridge Drive Fort Myers, FL 33912 Counsel for Plaintiffs Alex M. Allman, Esquire Offit Kurman, P.A. 300 E. Lombard St., Suite 2010 Baltimore, MD 21202 Counsel for Plaintiff Lewis /s/ Timothy F. McCormack Case 1:16-cv-00815-GLR Document 37-1 Filed 11/14/16 Page 20 of 20 EXHIBIT A Case 1:16-cv-00815-GLR Document 37-2 Filed 11/14/16 Page 1 of 5 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND (Northern Division) L2 FAMILY FOUNDATION, et al., Plaintiff, v. CONGRESSIONAL BANK, et al., Defendants. Civil Action No.: I:16-CV-815-GLR * * ^ % AFFIDAVIT OF KWEKU PARKER I, KWEKU PARKER, state: 1. I am over 18 years of age, competent to testify, and have personal knowledge of the facts stated herein, all of which are true. 2. I worked for American Bank from September 2014 to July 2015 as the Director of Residential Lending in Maryland. 3. In my position as Director of Residential Lending in Maryland, I supervised and oversaw the origination of mortgage loans, hired and supervised staff, and oversaw the Hunt Valley American Bank Branch. 4. At all times during my employment with American Bank, I conducted my duties and acted within the scope of my employment with American Bank. 5. I have over 18 years of real estate finance experience. 6. I have a baccalaureate degree from Marylhurst University and am a member of the National Association of Mortgage Professionals. DMEAST #27498576 v2 EXHIBIT A Case 1:16-cv-00815-GLR Document 37-2 Filed 11/14/16 Page 2 of 5 7. I explored a number of options for the possible location of the American Bank branch, and I ultimately chose the Hunt Valley location due to its location near public transportation. 8. After I became employed by American Bank, the L2 Family Foundation, Inc. (the "Lewis Family Foundation") reached out to me in my role as Director of Residential Lending, seeking donations to fund their operations. 9. At that time, they reached out to me because their relationship with Vant Capital, the Lewis Family Foundation investor, was failing. 10. At that time, Keon Lattimore, who I knew to be a former college football player, was employed by Vant Capital. 11. After the Lewis Family Foundation reached out to me, I assisted it in obtaining two voluntary charitable contributions from American Bank, totaling to $20,000.00. 12. To advertise and promote its mission, the Lewis Family Foundation created and disseminated a number of video advertisements on television in which representatives of the Lewis Family Foundation appeared. 13. American Bank never created any advertisements featuring the Lewis Family Foundation, Ray Lewis, Keon Lattimore, Sunsiera Smith, or Kadaja Holloway. 14. Neither American Bank nor I ever asked Ray Lewis, Keon Lattimore, Sunsiera Smith, or Kadaja Holloway to appear in any advertisement for American Bank. 15. Neither American Bank nor I ever used the likeness of Ray Lewis, Keon Lattimore, Sunsiera Smith, or Kadaja Holloway to promote my business or the business of American Bank. DMEAST #27498576 v2 2 Case 1:16-cv-00815-GLR Document 37-2 Filed 11/14/16 Page 3 of 5 16. American Bank did not have a written or unwritten contract, or any agreement, with the L2 Foundation, Ray Lewis, Keon Lattimore, Sunsiera Smith, or Kadaja Holloway to receive kickbacks in return for payments. 17. Recipients of awards from the Lewis Family Foundation could choose any mortgage provider that they desired and in no way were forced in any way to use American Bank. [SIGNATURE APPEARS ON FOLLOWING PAGE] DMEAST #27498576 v2 3 Case 1:16-cv-00815-GLR Document 37-2 Filed 11/14/16 Page 4 of 5 I SOLEMNLY AFFIRM under the penalties of peijury that the contents of the foregoing paper are true. L Executed on DMEAST #27498576 v2 4 Case 1:16-cv-00815-GLR Document 37-2 Filed 11/14/16 Page 5 of 5 EXHIBIT B Case 1:16-cv-00815-GLR Document 37-3 Filed 11/14/16 Page 1 of 3 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND (Northern Division) L2 FAMILY FOUNDATION, et al., * Plaintiff, * * V' Civil Action No.: 1:16-CV-815-GLR CONGRESSIONAL BANK, et al., * Defendants. * . * * * * * * * * * * * * * * * * AFFIDAVIT OF DONALD GALLO I, Donald Gallo, state: 1. I am over 18 years of age, competent to testify, and have personal knowledge of the facts stated herein, all of which are true. 2. I was employed by American Bank from September 24, 2013 to December 31, 2015. 3. My title at American Bank was Vice President, Secondary Marketing. 4. In my position as Vice President, Secondary Marketing, I was responsible for managing interest rate risk associated with the loan origination process. 5. As Vice President, Secondaiy Marketing, I hired Kweku Parker to be the Director of Residential Lending in Maryland to work at the Hunt Valley Branch location. 6. In my review candidates for the position, I learned that Kweku Parker was very experienced in lending, originating mortgage loans, and overseeing lending staff. 7. I believed that based his experiences, Kweku Parker was well-qualified for the position of Director of Residential Lending in Maryland. DMEAST #27498579 v2 EXHIBIT B Case 1:16-cv-00815-GLR Document 37-3 Filed 11/14/16 Page 2 of 3 8. At all times relevant to the facts of this case, I observed that Kweku Parker acted within the scope of his employment with American Bank. I SOLEMNLY AFFIRM under the penalties of perjury that the contents of the foregoing paper are true. Executed on l(( Hi ^ • 1 ' Donald Gallo DMEAST #27498579 v2 2 Case 1:16-cv-00815-GLR Document 37-3 Filed 11/14/16 Page 3 of 3 EXHIBIT C Case 1:16-cv-00815-GLR Document 37-4 Filed 11/14/16 Page 1 of 2 FAMILY F O U N D A T I O N February 2,2015 Kwe Parker Director of Lending American Bank - Baltimore 11350 McCormick Road Executive Plaza III, Suite 1102 Hunt Valley, Maryland 21031 Dear Mr. Parker, It has been a pleasure working with American Bank. We look forward to a longstanding relationship. Your $10,000 sponsorship/donation will go towards helping us educate single parent families on topics of financial literacy training and homeownership. We take care to prominently display our sponsors at all events, marketing materials and on our websites. Trust that your ongoing support helps us reach the thousands of families that contact our program. Attached you will find our 501C3 certification. We will be awarding our first round of recipients on Monday, February 9, 2015. If you have any questions, please give me a call at (443) 564-2530. Sin * Sunseria Smith President L2 Family Foundation L2Family.org EXHIBIT C Case 1:16-cv-00815-GLR Document 37-4 Filed 11/14/16 Page 2 of 2 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND (Northern Division) L2 FAMILY FOUNDATION, et al., Plaintiffs v. CONGRESSIONAL BANK, et al., Defendants. * * * * * * * * * * * Civil Action No. 1:16-CV-815-GLR * * * * * * * * * * * * * ORDER UPON CONSIDERATION of the Motion of Defendants Congressional Bank, as successor by merger to American Bank, and Kweku Parker for Summary Judgment as to Plaintiffs Ray Lewis, L2 Family Foundation, Inc., Keon Lattimore, Kadaja Holloway, and Sunsiera Smith, any response in opposition thereto and good cause therefor having been shown, it is, this __ day of _________________, 2016, by the United States District Court for the District of Maryland hereby, ORDERED that Defendants’ Motion for Summary Judgment is GRANTED; and is further ORDERED that summary JUDGMENT IS ENTERED in favor of Defendants Congressional Bank, as successor by merger to American Bank, and Kweku Parker and against Plaintiffs Ray Lewis, L2 Family Foundation, Inc., Keon Lattimore, Kadaja Holloway, and Sunsiera Smith on all counts of the Complaint. _______________________________ George Levi Russell, III United States District Judge Case 1:16-cv-00815-GLR Document 37-5 Filed 11/14/16 Page 1 of 1