Modderman v. PAG Annapolis JL1, LLC.

MARY MODDERMAN v. PAG ANNAPOLIS JL1, LLC., ET AL.

No. 0816

COURT OF SPECIAL APPEALS OF MARYLAND

September Term, 2018

September 27, 2019

Circuit Court for Montgomery County

Case No. 422745V

UNREPORTED

Arthur, Friedman, Raker, Irma S., (Senior Judge, Specially Assigned), JJ.

Opinion by Arthur, J.

*This is an unreported opinion, and it may not be cited in any paper, brief, motion, or other document filed in this Court or any other Maryland Court as either precedent within the rule of stare decisis or as persuasive authority. Md. Rule 1-104.

A minor member of an illegal conspiracy sued her alleged co-conspirators because one of the conspirators breached a side-agreement with her. The Circuit Court for Montgomery County dismissed her federal RICO claim and her common-law claims for conspiracy and aiding and abetting. She appealed. We affirm.

FACTUAL AND PROCEDURAL HISTORY

Because this case comes to us on a motion to dismiss for a failure to state a claim upon which relief can be granted, we assume the truth of all well-pleaded facts and the inferences reasonably drawn therefrom. See, e.g., Parks v. Alpharma, Inc., 421 Md. 59, 72 (2011).

Appellant Mary Joan Modderman alleged that Kerem Celem was the mastermind behind a scheme to purchase luxury automobiles in the United States and to export them illegally to China and Russia, where they could be sold for up to four times the retail price here. Celem operated a used car dealership in Virginia, known as KC Auto.

According to Modderman, Celem and his alleged co-conspirators recruited persons with good credit to serve as "purchasing agents" (or, more accurately, straw purchasers) of luxury automobiles. In exchange for a small fee paid by Celem or his companies, the "purchasing agent" would take out a loan to finance the purchase of a luxury automobile. After purchasing the automobile, the "purchasing agent" would immediately deliver it to Celem, with the understanding that Celem or his companies would pay off the loan. Celem would export the automobile to China or Russia, without a title and without the lender's permission.

On October 24, 2013, Modderman entered into a "Non-Exclusive Purchasing Agent Agreement" with Celem and KC Auto. Shortly thereafter, Modderman purchased a 2014 Land Rover from a local dealership, PAG Annapolis JL1, LLC. Modderman borrowed over $84,000.00 from SunTrust Bank to finance the purchase of the automobile.

Modderman alleges that Celem and one of his employees, Michael Stoll, arranged all aspects of the purchase. She claims that Stoll told her the precise date and time at which to go to a specific dealership (PAG Annapolis) and that he instructed her to meet with specific representatives to retrieve a specific car that had already been pre-selected by Celem at a pre-determined price.

Modderman specifically alleges that on November 7, 2013, Stoll advised her that the sale of the Land Rover had been "lined up" with Carnell Pinkston, a salesman at PAG Annapolis, and third-party defendant Larry Cash, the dealership's finance manager. Modderman alleges that she did not look at the car that she was going to purchase, that she did not walk through the showroom or the dealer's lot to pick out a car, and that she did not negotiate the purchase price or the down payment.

According to Modderman, the dealership's employees were in on the scam. She alleged that by 2013 manufacturers had become wary of dealerships making sales to wholesalers like Celem. Consequently, Celem allegedly bribed the dealership's employees to facilitate sales to straw purchasers like Modderman. In exchange, the dealership's employees allegedly participated in the conspiracy by picking the car to be purchased and preparing the paperwork, including the documents for the SunTrust loan.

Modderman alleged that, within minutes of leaving the dealership, she met two unnamed agents of Celem's company in a nearby parking lot. They drove back to the dealership, where the agents took possession of the Land Rover. According to Modderman, Celem "illegally shipped" the car "to China (or some other foreign destination)."

Under her "purchasing agreement" with Celem and KC Auto, Modderman never intended to pay off the loan to SunTrust with her own personal funds. Instead, she expected Celem and KC Auto to pay off the loan once she turned the car over to him. In breach of the purchasing agreement, however, Celem and KC Auto failed to pay off the loan from SunTrust. As a result, in November 2015, SunTrust sued Modderman for breach of contract, demanding $84,453.95, plus costs, attorney's fees, and interest.¹

On November 11, 2016, Modderman filed a third-party complaint against 14 third-party defendants, including PAG Annapolis and Carnell Pinkston. She sought damages in the exact amount that she owed to SunTrust.

At a hearing on June 6, 2017, the Circuit Court for Montgomery County dismissed Modderman's claims against all but one of the third-party defendants, but granted Modderman leave to amend.

On June 20, 2017, Modderman filed an amended third-party complaint against 13 third-party defendants. The amended third-party complaint contained three countsagainst PAG Annapolis and Pinkston: (1) a claim for money damages under the Racketeer Influenced and Corrupt Organizations Act or "RICO," 18 U.S.C. §§ 1961 to 1968, (2) a common-law claim for civil conspiracy, and (3) a common-law claim for aiding and abetting.

PAG Annapolis and Pinkston moved to dismiss the amended third-party complaint. At a hearing on September 7, 2017, the court announced that it would grant the motions. The court issued orders on September 18, 2017, dismissing the amended complaint as to Pinkston and PAG Annapolis, without prejudice. The written orders did not grant leave to amend.

Nonetheless, on October 18, 2017, Modderman filed a second amended third-party complaint, in which she restated her claims against PAG Annapolis, Pinkston, and others and added Annapolis Motorcars, LLC, as an additional third-party defendant. PAG Annapolis, Pinkston, and Annapolis Motorcars each moved to dismiss the second amended third-party complaint. Among other things, they argued that Modderman had no right to file another amended complaint, because the court had not granted her leave to amend when it dismissed her last complaint. See Md. Rule 2-322(c) (stating that, "[i]f the court orders dismissal, an amended complaint may be filed only if the court expressly grants leave to amend[]").

Meanwhile, on December 4, 2017, Modderman moved to revise the order that dismissed the first amended third-party complaint without granting her leave to amend. In an order issued on February 20, 2018, the court denied Modderman's motion to revise.Then, in a series of orders dated March 13, 2018, the court dismissed the second amended third-party complaint as against PAG Annapolis, Pinkston, and Annapolis Motorcars.²

Once the court had disposed of the remaining claims against the remaining third-party defendants, Modderman took an appeal.

The appeal is technically defective, because the circuit court did not enter a separate document memorializing the entry of judgment. See Md. Rule 2-601(a)(1) (stating that "[e]ach judgment shall be set forth on a separate document"); see also URS Corp. v. Ft. Myer Constr. Corp., 452 Md. 48, 65-66 (2017); Hiob v. Progressive American Ins. Co., 440 Md. 466, 478-80 (2014). The requirement of a separate document can be waived, however, to preserve an appeal. See, e.g., URS Corp. v. Ft. Myer Constr. Corp., 452 Md. at 67-70. Were we to hold that the requirement was not waived, we would remand to the circuit court, which would simply file and enter the separate judgment, from which a timely appeal would then be taken. "This would be a classic example of wheels spinning for no practical purpose." Id. at 70. For that reason, "[w]e hold that the separate document requirement has been waived." Id.

QUESTIONS PRESENTED

Modderman presented two questions for our review, which we have rephrased as follows:

1. Did the trial court err in dismissing Modderman's first amended third-party complaint for failure to state a claim?

2. Did the trial court abuse its discretion in not granting leave to amend the first amended third-party complaint and dismissing the second amended third-party complaint that Modderman filed without leave to amend?³

For the reasons stated below, we answer both questions in the negative. Consequently, we shall affirm the judgment of the Circuit Court for Montgomery County.

DISCUSSION

I. Dismissal of Civil Conspiracy, RICO, and Aiding and Abetting Claims

The circuit court granted motions to dismiss for "failure to state a claim upon which relief can be granted." Md. Rule 2-322(b)(2). The function of such a motion is to test the sufficiency of an opposing party's pleadings. See, e.g., Walton v. Network Sols.,221 Md. App. 656, 665 (2015). In ruling on the motion, the court considers the facts alleged in the complaint and any supporting exhibits incorporated into the complaint. RRC Northeast, LLC v. BAA Maryland, Inc., 413 Md. 638, 643 (2010) (citing Converge Servs. Grp., LLC v. Curran, 383 Md. 462, 475 (2004)). Dismissal is proper if, even after assuming the truth of all well-pleaded factual allegations and after drawing all reasonable inferences from those allegations in favor of the pleader, the pleader would still not be entitled to relief. See, e.g., O'Brien & Gere Eng'rs, Inc. v. City of Salisbury, 447 Md. 394, 403-04 (2016).

On review of the grant of a motion to dismiss, the appellate court analyzes whether the trial court's ruling was legally correct, without any special deference to that court's legal conclusions. Patton v. Wells Fargo Fin. Maryland, Inc., 437 Md. 83, 95 (2014). This Court may affirm the dismissal of a complaint on any ground adequately shown by the record, regardless of whether the trial court relied on that ground or whether the parties raised that ground. Mostofi v. Midland Funding, LLC, 223 Md. App. 687,...