ShoMe Technologies, Inc. v. Nobska Group, LLC , 190 F. App'x 298 ( 2006 )


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  •                             UNPUBLISHED
    UNITED STATES COURT OF APPEALS
    FOR THE FOURTH CIRCUIT
    No. 05-2425
    SHOME TECHNOLOGIES, INCORPORATED,
    Plaintiff - Appellant,
    versus
    NOBSKA GROUP, LLC,
    Defendant - Appellee.
    Appeal from the United States District Court for the District of
    Maryland, at Baltimore. Andre M. Davis, District Judge. (CA-05-
    2316-AMD)
    Submitted:   July 6, 2006                  Decided:   July 18, 2006
    Before MOTZ, TRAXLER, and SHEDD, Circuit Judges.
    Affirmed by unpublished per curiam opinion.
    Thomas P. Silis, Alexandria, Virginia, for Appellant. David J.
    Heubeck, VENABLE, L.L.P., Baltimore, Maryland, for Appellee.
    Unpublished opinions are not binding precedent in this circuit.
    See Local Rule 36(c).
    PER CURIAM:
    On August 23, 2005, ShoMe Technologies, Inc. (“ShoMe”) filed
    suit against Nobska Group, LLC, (“Nobska”) alleging breach of
    contract, breach of duty of negotiation in good faith, intentional
    interference with prospective economic advantage, and negligent
    misrepresentation. Nobska moved to dismiss the suit on all counts.
    The district court granted Nobska’s motion, finding that the
    “plaintiff    has   not    and    simply     cannot    plausibly   allege    the
    rudimentary     elements     of    its       ostensible   claims.”          ShoMe
    Technologies, Inc. v. Nobska Group, LLC, No. AMD 05-2316 (D. Md.
    Nov. 23, 2005).     ShoMe has appealed the district court’s dismissal
    with regard to its negligent misrepresentation claim.                Finding no
    error, we affirm.
    In February 2004, ShoMe and Nobska entered into a Letter of
    Intent regarding Nobska’s acquisition of “exclusive licensing,
    commercial exploitation, and development rights” for certain ShoMe
    technologies    and    software,     “subject     to    the   execution    of    a
    definitive License Agreement.”           J.A. 11.*      The Letter of Intent
    provided Nobska with a 60-day due diligence period, ending in April
    2004, to investigate ShoMe’s business and assets.               J.A. 12.        The
    Letter   of   Intent   contained    a    non-solicitation      provision    that
    *
    In reviewing a dismissal under Federal Rule of Civil
    Procedure 12(b)(6), we view the complaint in the light most
    favorable to the plaintiff and accept all of the plaintiff’s well
    pleaded assertions as true. Venkatraman v. REI Systems, Inc., 
    417 F.3d 418
    , 420 (4th Cir. 2005).
    2
    precluded    ShoMe   from    entering     into    or   considering    any    other
    licensing or acquisition proposal until April 1, 2004, or until
    Nobska    informed   ShoMe    it    was       terminating   any   negotiations,
    whichever occurred earlier.          J.A. 5.       With the exception of the
    non-solicitation provision, a provision regarding governmental
    approvals, and a provision requiring the representation of no
    materially adverse changes in ShoMe’s business or assets, which
    were enforceable solely against ShoMe, the Letter of Intent, by its
    express terms, did not “create any legal obligations on the part
    of, or any rights in favor of, [Nobska], [ShoMe], or any other
    party.”    J.A. 13-14.
    On April 26, 2004, after the due diligence period had ended,
    Nobska sent a letter to ShoMe, stating that Nobska had instructed
    its attorneys to begin drafting a licensing agreement consistent
    with the Letter of Intent for ShoMe to review.                    J.A. 15.    Two
    months later, Nobska notified ShoMe that, after completing its due
    diligence investigation, Nobska would not proceed with a licensing
    agreement.    J.A. 16.
    On August 23, 2005, ShoMe filed suit against Nobska.                   Nobska
    moved to dismiss the suit, claiming that the Letter of Intent, by
    its express language, was not binding on Nobska and did not cause
    Nobska to owe ShoMe any legal duty unless and until a Licensing
    Agreement was executed.            The district court granted Nobska’s
    motion, and ShoMe timely appealed.
    3
    The grant of a motion to dismiss under Federal Rule of Civil
    Procedure 12(b)(6) is reviewed de novo.            Venkatraman, 
    417 F.3d at 420
    .      To state a claim for negligent misrepresentation under
    Maryland law, a plaintiff must allege:
    (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.
    Gross v. Sussex Inc., 
    630 A.2d 1156
    , 1162 (Md. 1993).
    In dismissing ShoMe’s negligent misrepresentation claim, the
    district court found that Nobska did not owe ShoMe a duty of care
    “insofar as it chose to communicate with [ShoMe] pursuant to the
    letter of intent.” J.A. 48.         We agree.         Under Maryland law, a
    plaintiff asserting a claim of economic loss due to negligent
    misrepresentation may show that the defendant owed him a duty of
    care if an “intimate nexus” exists between the parties.                 Griesi v.
    Atlantic Gen. Hosp. Corp., 
    756 A.2d 548
    , 554 (Md. 2000).                    This
    “intimate nexus” can be demonstrated by showing contractual privity
    between    the   parties,   or   its       equivalent,      such   as   “special
    relationships    consummated     during      the   course     of   pre-contract
    negotiations.”      
    Id.
         ShoMe   claims     that   the    lengthy    contract
    4
    negotiations between it and Nobska, which were documented in the
    Letter of Intent, established a special relationship and intimate
    nexus that caused Nobska to owe ShoMe a duty of care.                    This
    assertion, however, is contradicted by the express language in the
    Letter of Intent, which states that the Letter is an “expression of
    intent only . . . and the parties do not intend to be legally bound
    or otherwise to incur any obligations with respect to the proposed
    transactions” until the execution of a License Agreement. J.A. 14.
    ShoMe relies heavily on cases where Maryland courts have allowed
    negligent misrepresentation cases to proceed when, in the course of
    pre-contract    employment     negotiations,   the    defendant     maintains
    “exclusive     control   of”    and   withholds      “vital   and   material
    information” that is necessary for the plaintiff to completely
    understand the situation.       See Odyssey Travel Center, Inc. v. RO
    Cruises, Inc., 
    262 F. Supp.2d 618
    , 628 (D. Md. 2003).                 In the
    present case, ShoMe was fully aware that Nobska’s failure to act
    within the deadlines set out in the Letter of Intent allowed ShoMe
    to seek other licensing and acquisition proposals.            By not seeking
    other investors after the deadline, ShoMe acted “at its peril.”
    J.A. 48.
    Furthermore, the district court held that ShoMe could not
    show, as a matter of law, that it acted in:
    reasonable reliance on the April 26, 2004, letter in
    failing to seek “alternative channels of distribution . .
    . .” [T]he very fact that [Nobska] had not communicated
    the outcome of its due diligence to [ShoMe] by the
    5
    deadline established in the letter of intent (60 days
    from February 6, 2004) affirmatively undermines, rather
    than supports, any claim of reasonable reliance on
    [ShoMe’s] part.
    J.A. 48.   We agree that, as a matter of law, ShoMe has failed to
    show that it reasonably relied on Nobska’s April 26, 2004, letter
    in failing to seek alternative investors, as it was permitted to do
    under the Letter of Intent following the April 1 deadline.
    Since ShoMe has not alleged any set of facts that could state
    a claim of negligent misrepresentation, we affirm the district
    court’s decision. We dispense with oral argument because the facts
    and legal contentions are adequately presented in the materials
    before the court and argument would not aid the decisional process.
    AFFIRMED
    6
    

Document Info

Docket Number: 05-2425

Citation Numbers: 190 F. App'x 298

Judges: Motz, Per Curiam, Shedd, Traxler

Filed Date: 7/18/2006

Precedential Status: Non-Precedential

Modified Date: 8/7/2023