ÿWPCy @ê´tꬨ˜:Ñ´˜ÚúŸEHÆfàá^rìˆtÛP%¥ˆ.ùIŒG´´ÐéY ;>< HW| ‘'Ÿ®xæbÑDz°Žw4Ãn‡µ‰ºÚNï²ËB"’÷Z6:åÃ]7öð\[T¬Ûd“HÓ â‰ùküð£eËÛÕŽNÅF-x1nN¤éõSìmhsíAR«ø˜Iö‡1WUÈm˜ˆÐoŠŒ¼jB~ÇSYDÀy`ïÌ+|…3iï~ vO#InÊ£l§Jv®K{9„­…Ù¹Ç×æ\¼ïw’SŒÆÃV„PÞ÷3²jßà»d8/Ùš9ßÍA9TÇçžõ"U>^’œ 0 º. 0<è 0‹$ 0:¯ 0hé÷Q 0µH U>ý ; O 0š_ #Áù UNº %M(N:^ <wH4L` mbô\  `‹&Times New Roman'  $Samuel T Wolf0OIT .   6B 5ÿÿ4Heading 1Ô€XXXÔò òÓ  ÓÓÓÔ  ÔÔ  ÔÓ  ÓÓÓó óÔ€XXXÔ<ÿÿ:Default Para0A ÿÿ.FooterÓ°°ÀÐ (#ÓÓA7°X°` ¸ hÀpÈ xÐ (#AÓ:ÿÿ8Page Number6 ÿÿ4Body TextÓ  ÓÓÓÓ  ÓÓÓ íÝ ƒ †Ü)ÝÔ..ÔÔ  ÔÔ  ÔÓ  ÓÔ€X3ŒXXXÔÔ€X3ŒXXX3ŒÔÝ  ÝÔ_ÔÓ$°°ÀÐ (#°œX$ÓÝ‚ÿÿÿÝÝ  ÝÔ€ôß,òXX3ŒÔÔ€X3ŒXòôß,ÔÔ€ X3ŒXXX3ŒÔÝ‚ÿÿÿÝÓ*°°ÀÐ (#°°ÀÐ X*ÓÝ  ÝÓ ,ÓÝ‚ÿÿÿ9ÝÝ  ÝÝ‚ÿÿÿÁƒ ÝÝ  ÝÔ€X3ŒXX X3ŒÔ(2†Ü$©©Ý ƒ øL!ÝÔ..ÔÔ  ÔÔ  ÔÓ  ÓÔ€X3ŒXXXÔÔ€X3ŒXXX3ŒÔÝ  Ýô\  `‹&Times New RomanÿÿParties#|x(røL$¡¡Ô..ÔÔ  ÔÔ  ÔÓ  ÓÔ€X3ŒXXXÔÔ€X3ŒXXX3ŒÔ˜HP CLJ 5550DN PCL 6ÈÈÈÈÈÈÈÈ0(ÖÃ9 Z‹6Times New Roman RegularXÌvŽ4â šX†3ebsiteÿU‹ÿÀÀÀÝ ƒ øL!ÝÔ..ÔÔ  ÔÔ  ÔÓ  ÓÔ€X3ŒXXXÔÔ€X3ŒXXX3ŒÔÝ  ÝÔ_ÔÑ  ÑÓ   ÓÓ  ÓÖ€ÿÿÖÑÈÑÑXÑÑX°ÑÑ8€3ŒXXdædÈ8ÑÝ‚ÿÿÿÝÔ€X3ŒXXX3ŒÔò òÓ  ÓÓÓÔ  ÔÝ  ÝÔ& ² ÔÓÓÝ‚ÿÿÿ8ÝÝ  Ýà@..àó ó݃8¾ÝÔ Ý ˆԌ̌Ó  ÓÓÓÔ€X3ŒXXX3ŒÔÝ  ÝÝ‚ÿÿÿÝÔ€X3ŒXXX3ŒÔò òÓ  ÓÓÓÔ  ÔÝ  ÝÓ  ÓÓÓÝ‚ÿÿÿhÝÝ  Ýó óMichael€H.€Patterson,à ¸ àà  àà h àà À à*à  àIN€THE€CIRCUIT€COURT݃hîÝÔ Ý ¸ÔŒÐ –æ ÐŒÓ  ÓÓÓÔ€X3ŒXXX3ŒÔÝ  Ýà  àPlaintiffà ¸ àà  àà h àÔ'²° ÔÐ |Ì Ðv.à  àà ` àà ¸ àà  àà h àà À à*à  àFORÐ b² ÐÝ‚ÿÿÿÝÓ$°°ÀÐ (#°œX$ÓÝ  ÝÓH.°°` ¸ hÀpÈ xÐ (#°°ÀÐ XHÓÝ‚ÿÿÿÏÝÝ  Ý݃ÿÿÏV݌̌Ó! °œX°°ŒX(#!ÓÝ  ÝMiles€R.€Patterson€Jr.,€et€al.,à  àà h àà À à*à  àBALTIMORE€COUNTYÐ . ~ Ðà  àDefendants.Ð  d ÐÓ ÓÓ3À ÀÀpÈ xÐ (#°œX3Ó*€à  àCase€No.€03„C„05„005429Ð ú J ÐÌÓ ÓÓH.°°` ¸ hÀpÈ xÐ (#ÀÀÀ†X(#HÓ*à  à*à ` à*à ¸ à*à  à*à h à*à À à*à  à*à p à*à È à*à  à*à x à*Ô€ŠµîˆXX3ŒÔÐ Æ   ÐÔ% ‡ ÔÔ%† òÔÌÌÝ‚ÿÿÿÝÔ€X3ŒXˆŠµîÔò òÓ  ÓÓÓÔ  ÔÝ  ÝÔ&  ÔÝ‚ÿÿÿÝÝ  ÝÔ€ŠµîˆXX3ŒÔòòMEMORANDUM€AND€RULINGÐ žî  ÐÔ€X3ŒXˆŠµîÔóó݃ÿÿ†ÝÔ Ý bԌ̌Ó  ÓÓÓó óÔ€ŠµîˆXX3ŒÔÝ  ÝÓ XÓÓ  ÓÓÓÔ€X3ŒXˆŠµîÔBefore€the€court€is€the€Defendantsðð€Motion€to€Dismiss€(16,000),€Plaintiffððs€ð ðAmendedÐ \¬ Ðand€Restated€Complaint€for€Injunctive,€and€Other€Reliefðð€(15,000),€under€Md.€Rule€2„322(b)(2)Ð (x Ðfor€failure€to€state€a€claim€upon€which€relief€can€be€granted.€€In€ruling€on€a€motion€to€dismiss€forÐ ôD Ðfailure€to€state€a€claim€upon€which€relief€can€be€granted,€ð ðthe€court€must€assume€the€truth€of€allÐ À Ðwell„pled€facts€in€the€complaint€as€well€as€the€reasonable€inferences€that€may€be€drawn€fromÐ ŒÜ Ðthose€relevant€and€material€facts.ðð€€òòÔ_ÔPorterfieldÔ_Ô€v.€Ô_ÔMascariÔ_Ô€II,€Inc.óó,€374€Md.€402,€414€(2003).€€TheÐ X¨ Ðcourt€may€dismiss€the€complaint€only€if€the€well„pled€facts€and€reasonable€inferences,€viewed€inÐ $t Ðthe€light€most€favorable€to€the€plaintiff,€fail€to€afford€that€party€the€relief€requested.ðð€€òòId.óó€€Ô'žzÔÐ ð@ ÐTo€be€well€pled,€a€pleading€must€follow€the€requirements€in€Md.€Rule€2„303.€€Rule€2„Ð ¼!   Ð303(a)€provides€that€ð ð[Ô_Ôa]llÔ_Ô€averments€of€claimð8ðshall€be€made€in€numbered€paragraphs,€theÐ ˆ#Ø" Ðcontents€of€which€shall€be€limited€as€far€as€practicable€to€a€statement€of€a€single€set€ofÐ T%¤ $ Ðcircumstancesð8ð.Each€cause€of€action€shall€be€set€forth€in€a€separately€numbered€count.ðð€Ð  'p"& ÐSubsection€(b)€provides€that€ð ð[Ô_Ôe]achÔ_Ô€averment€of€a€pleading€shall€be€simple,€concise,€andÐ ì(<$( Ðdirectð8ð.A€pleading€shall€contain€only€such€statements€of€fact€as€may€be€necessary€to€show€theÐ ¸*&* Ðpleaderððs€entitlement€to€relief.ðð€€Further,€subsection€(b)€explicitly€states€what€is€impermissible€inÐ „,Ô', ÐÔ_Ôa€pleading:€ð ðIt€òòshall€notóó€include€argument,€unnecessary€recitals€of€law,€evidence,€or€documents,Ð ° Ðor€any€immaterial,€impertinent,€or€scandalous€matterðð€Md.€Rule€2„303€(b)€(emphasis€added).€€Ð |Ì ÐÓ XÓÓ  ÓI.Ð H˜ ÐÓ XÓÓ  ÓIn€light€of€the€formal€requirements€imposed€by€Rule€2„303,€the€well„pled€facts,€that€forÐ  d Ðthe€purposes€of€ruling€on€the€present€motion€must€be€assumed€to€be€true,€can€be€summarized€asÐ à 0 Ðfollows:Ð ¬ ü  ÐDefendant€Manor€View€Farms,€Inc.€(Corporation)€is€a€closely€held€corporation€organizedÐ xÈ  Ðunder€the€laws€of€Maryland€and€is€located€in€Baltimore€County.€€Ð D”  ÐPrior€to€April,€2005,€Plaintiff€Michael€H.€Patterson€and€Defendants€Miles€R.€Patterson,Ð ` ÐNancy€P.€Young,€and€Mary€P.€Hendrix€were€the€shareholders€of€all€common€capital€stock€issued,Ð Ü, Ðoutstanding€and€entitled€to€be€voted€in€the€Corporation.€€The€shareholders€are€siblings€and€eachÐ ¨ø Ðheld€288€shares.€An€additional€388€non„voting€shares€were€held€by€the€Corporation€as€securityÐ tÄ Ðuntil€such€time€as€the€full€payment€of€the€purchase€price€is€made€under€the€Stock€PurchaseÐ @ ÐAgreement€of€December€15,€1980.€€Ð  \ ÐThe€current€board€of€directors€of€the€Corporation€is€comprised€of€Defendants€Miles€R.Ð Ø( ÐPatterson,€Dennis€A.€Hendrix€and€Nancy€P.€Young.€€Dennis€A.€Hendrix€is€Mary€P.€HendrixððsÐ ¤ô Ðhusband.€€Ð p!À  ÐThe€Corporationððs€charter€states€that€the€common€stock€of€the€Corporation€may€not€beÐ <#Œ" Ðtransferred€except€after€a€sequential€offering€first€to€the€Corporation€and€then€to€eachÐ %X $ Ðstockholder.€€If€the€Corporation€and€the€stockholders€do€not€exercise€their€right€of€first€refusal,Ð Ô&$"& Ðthe€common€stock€may€be€sold€to€others€outside€the€Corporation.€€Ð  (ð#( ÐThe€charter€further€provides€that€the€charter€may€be€amended€only€by€authorization€of€theÐ l*¼%* Ðholders€of€four„fifths€of€all€outstanding€stock,€by€a€vote€at€a€meeting€or€in€writing€with€orÐ 8,ˆ', Ðwithout€a€meeting.€€This€provision€includes€an€amendment€changing€the€terms€of€outstandingÐ ° Ðstock.Ð |Ì ÐAn€appraisal€done€by€RSM€McGladrey,€Inc.€to€ð ðvalue€100%€of€the€stock€of€theÐ H˜ ÐCorporationðð€was€issued€on€April€4,€2005.€€The€appraisal€was€not€conveyed€to€the€Plaintiff€untilÐ  d Ðafter€5:00€p.m.€on€May€11,€2005.€€Ð à 0 ÐThe€board€of€directors€met,€presumably€on€April€29,€2005,€and€called€for€the€issuance€ofÐ ¬ ü  Ðan€additional€130€shares€of€the€Corporations€Common€Stock€to€all€shareholders€but€Plaintiff.€Ð xÈ  ÐThe€minutes€made€of€this€meeting€are€undated.€€Ð D”  ÐAs€a€result€of€the€issuance€of€additional€common€stock,€Defendant€shareholders€eachÐ ` Ðowned€418€shares€while€Plaintiff€only€owned€288€shares.€€Ð Ü, ÐOn€May€4,€2005,€the€board€of€directors€met€for€the€purpose€of€approving€Articles€ofÐ ¨ø ÐAmendment€and€to€call€a€special€Stockholderððs€Meeting€for€Monday,€May€16,€2005€at€10:00Ð tÄ Ða.m.€for€the€purpose€of€adopting€the€Articles€of€Amendment.€€Ð @ ÐThe€Articles€of€Amendment€called€for€a€reverse€stock€split,€meaning€that€each€share€heldÐ  \ Ðprior€to€the€reverse€stock€split€would€be€converted€into€a€1/418€share.€€Accordingly,€eachÐ Ø( ÐDefendant€stockholder€would€own€one€share.€€Plaintiff€would€only€own€a€288/418€share.€€InÐ ¤ô Ðaddition,€the€Articles€of€Amendment€provide€that€a€stockholder€must€own€at€least€one€share€ofÐ p!À  Ðcorporate€stock.€The€Corporation€reserved€the€right€to€demand€the€surrender€of€any€fractionalÐ <#Œ" Ðshare€in€return€for€which€the€Corporation€would€make€a€cash€payment€to€the€fractionalÐ %X $ Ðshareholder€in€an€amount€equal€to€the€fair€value€of€the€fractional€shareholderððs€common€stock.€€Ð Ô&$"& ÐWith€the€Defendant€shareholders€in€control€of€slightly€over€the€required€80€percentÐ  (ð#( Ðmajority€of€the€Corporationððs€stock,€the€Articles€of€Amendment€were€passed€over€PlaintiffððsÐ l*¼%* Ðdissent.€€Before€the€reverse€stock€split,€the€Articles€of€Amendment€could€not€pass€over€PlaintiffððsÐ 8,ˆ', Ðdissent,€because€the€Defendant€stockholders€only€controlled€75€percent€of€the€common€stock.€Ð ° ÐThe€Articles€of€Amendment€effectively€called€for€Plaintiffððs€removal€as€a€shareholder€by€buyingÐ |Ì Ðout€his€fractional€share€of€the€common€stock€in€return€for€cash€payment€of€the€fair€value€of€theÐ H˜ Ðstock.€€Ð  d ÐWhile€Paragraph€9€of€the€Amended€and€Restated€Complaint€alleges€that€the€DefendantÐ à 0 Ðshareholdersðð€actions€were€consummated€as€a€result€of€some€sort€of€plan€ð ðto€fulfill€personal€andÐ ¬ ü  Ðselfish€objectives€which€do€not€serve€a€corporate€purpose€and€which€are€unfair€to€the€Plaintiff,Ð xÈ  Ðand€intended€to€circumvent€the€Corporationððs€Charter,ðð€the€motivations€of€the€plan€need€not€beÐ D”  Ðassumed€to€be€true€for€they€are€not€well„pled€facts,€but€are€argument€which€is€prohibited€by€theÐ ` Ðlanguage€of€Rule€2„303(b).€€In€its€entirety,€Paragraph€9€of€the€Amended€and€Restated€ComplaintÐ Ü, Ðreads:Ð ¨ø ÐÓ XÓÓ XÓÓE.` ¸ hÀpÈ xÐ (#°°ŒX(#EÓÓÓOn€or€about€April€19,€2005€the€Majority€Shareholders,€by€and€through€their€control€Ð tÄ Ðof€the€Board€of€Directors,€set€out€upon€a€course€of€conduct€planned€to€fulfill€Ð Zª Ðpersonal€and€selfish€objectives€which€do€not€serve€a€corporate€purpose€and€which€Ð @ Ðare€unfair€to€the€Plaintiff,€which€are€deceptive,€contrary€to,€and€intended€to€Ð &v Ðcircumvent€the€Corporationððs€Charter.€€These€selfish€and€personal€objectives€areÐ  \ Ðapparently€based€upon€the€Majority€Shareholdersðð€common€desire€to€obtain€personal,Ð òB Ðindividual€tax€advantage€and€at€the€same€time€to€obviate€Plaintiffððs€rights,€by€Ð Ø( Ðplotting,€through€the€means€set€forth€below€(the€ð ðPlanðð)€to€sell€100%€of€the€Ð ¾ ÐCorporationððs€stock€without€first€having€to€abide€by€the€Corporationððs€Charter€Ð ¤ô Ð(which€requires€that€before€any€transfer€could€occur,€Plaintiff€would€first€be€allowed€Ð Š Ú Ðhis€Right€of€First€Refusal).Ð p!À  ÐÌÓ XÓÓH.°°` ¸ hÀpÈ xÐ (#‹X(#HÓÓÓStripped€of€argument,€the€only€statements€of€fact€alleged€in€Paragraph€9€can€be€read€as€stating:Ð <#Œ" Ðð ðOn€or€about€April€19,€2005€the€Majority€Shareholders,€by€and€through€their€control€of€theÐ %X $ ÐBoard€of€Directors,€set€out€upon€a€planned€course€of€conduct.ðð€€Nowhere€in€the€Amended€andÐ Ô&$"& ÐRestated€Complaint€does€the€Plaintiff€make€any€statement€of€fact€that,€without€argument€andÐ  (ð#( Ðassumed€to€be€true,€would€support€an€inference€of€ð ðpersonal€or€selfish€objectives,ðð€whateverÐ l*¼%* Ðthose€objectives€might€have€been.€€Neither€has€the€Plaintiff€pleaded€any€facts€to€support€theÐ 8,ˆ', Ðallegation€that€the€Defendantsðð€intent€was€to€circumvent€the€charter€rather€than€to€act€inÐ ° Ðaccordance€with€the€terms€of€the€charter.€€Nor€does€the€Amended€and€Restated€Complaint€setÐ |Ì Ðforth€any€facts€that€could€demonstrate€a€plan€to€wrong€the€Plaintiff€or€deprive€him€of€his€rightsÐ H˜ Ðunder€either€the€charter€or€law.€€Defendant€makes€bald€assertions€of€mal€intent€on€the€part€of€theÐ  d ÐDefendants€unsupported€by€factual€statements€as€required€by€Rule€2„303.Ð à 0 ÐÓ XÓOnly€the€well„pled€facts€and€inferences€drawn€therefrom€are€to€be€assumed€as€true€for€theÐ ¬ ü  Ðpurposes€of€a€motion€to€dismiss€for€failure€to€state€a€claim€upon€which€relief€can€be€granted.Ð xÈ  ÐObviously,€the€Defendants€had€a€plan€for€their€actions.€€Even€without€Paragraphs€9€and€10,€oneÐ D”  Ðcan€assume€that€the€board€of€directors€and€Defendant€shareholders€planned€to€eliminateÐ ` ÐPlaintiffððs€status€as€a€shareholder€in€the€Corporation€by€issuing€more€stock,€purchasing€that€stockÐ Ü, Ðthemselves€to€obtain€the€necessary€80€percent€majority€of€voting€shares,€and€subsequentlyÐ ¨ø Ðamending€the€charter€to€effectively€squeeze€Plaintiff€out€of€his€shareholder€status.€€However,Ð tÄ Ðwithout€any€supporting€statements€of€fact,€the€only€inference€that€can€be€drawn,€even€in€the€lightÐ @ Ðmost€favorable€to€the€Plaintiff€as€the€non„moving€party,€is€that€the€Defendants€planned€to€do€justÐ  \ Ðas€they€did,€without€any€wrongful€intent€or€motive.€€Ð Ø( ÐÓ XÓÓ  ÓII.Ð ¤ô ÐÓ  Óà  àNone€of€the€Counts€present€any€statement€of€fact€creating€a€claim€upon€which€relief€canÐ p!À  Ðbe€granted.€Ð <#Œ" ÐÓ XÓPlaintiff€styles€Count€I€(Paragraphs€11„16)€as€an€action€for€Breach€of€Fiduciary€Duty€ofÐ %X $ ÐDirectors€and€Majority€Stockholders.€€Ð Ô&$"& ÐThe€only€purpose€of€Paragraph€11€is€to€illustrate€that€the€Defendants€will€not€be€harmedÐ  (ð#( Ðby€an€injunction,€which€is€argument€and€not€fact.€€There€are€facts€included€within€Paragraph€11,Ð l*¼%* Ðwhich€although€not€set€out€in€numbered€paragraphs€as€required€by€Rule€2„303(a),€may€beÐ 8,ˆ', Ðconsidered€by€the€court€so€as€to€do€ð ðsubstantial€justiceðð€under€the€mandate€of€Rule€2„303(e).€Ð ° ÐThose€factual€allegations€set€forth€in€this€paragraph,€and€not€occurring€elsewhere€in€theÐ |Ì ÐAmended€and€Restated€Complaint,€are€that€the€day„to„day€business€of€the€Corporation€isÐ H˜ Ðunaffected€by€the€Plaintiffððs€holding€his€stock,€there€is€no€impending€sale€of€the€CorporationððsÐ  d Ðassets€or€stock,€there€are€no€dissident€actions€ongoing,€or€in€recent€history,€which€would€affect€orÐ à 0 Ðimpede€the€Corporationððs€business,€and€the€purpose€of€Defendantsðð€actions€is€to€ð ðcut€out€theÐ ¬ ü  ÐPlaintiff€from€his€Right€of€First€Refusal€and€obtain€the€tax€advantages€to€the€personal€interests€ofÐ xÈ  Ðthe€Majority€Stockholders.ððÐ D”  ÐParagraphs€12€and€13€are€impermissible€recitals€of€law€and€legal€argument.Ð ` ÐParagraph€14€is€flawed€for€the€same€reason€that€Paragraph€9€is€flawed:€it€providesÐ Ü, Ðargumentative€conclusions€instead€of€well„pled€factual€allegations€which€would€lead€to€thoseÐ ¨ø Ðconclusions.€€Ð tÄ ÐParagraph€15€avers€that€Plaintiff€has€been€injured€by€Defendantsðð€failure€to€declareÐ @ Ðdividends€and€by€Defendantððs€overcompensation.€Once€again,€these€statements€are€conclusiveÐ  \ Ðrather€than€factual.Ð Ø( ÐParagraph€16€purports€to€state€that€Defendantsðð€actions€are€the€proximate€cause€ofÐ ¤ô ÐPlaintiffððs€damages,€which€include€ð ðirreparable€injury,€loss€of€his€stock,€loss€of€fair€value€andÐ p!À  Ðloss€of€his€Right€of€First€Refusal.ðð€€Ð <#Œ" ÐAccording€to€Plaintiffððs€memorandum€and€the€legal€argument€improperly€included€in€theÐ %X $ ÐAmended€and€Restated€Complaint€itself,€Count€I€is€based€on€two€legal€theories€by€which€theÐ Ô&$"& ÐDefendant€may€be€held€liable€for€breaching€a€fiduciary€duty€to€the€Plaintiff.€€First,€PlaintiffÐ  (ð#( Ðalleges€that€òòMd.€Corps.€ÔFRUS.,Ô&€Assocs.€Code€Annóó.€ÔUSFR.,Ôðð€2„405.1€imposes€a€statutory€duty€on€directors€of€aÐ l*¼%* Ðcorporation€to€act€in€good€faith,€to€act€in€a€manner€they€reasonably€believe€to€be€in€the€bestÐ 8,ˆ', Ðinterests€of€the€corporation,€and€to€act€with€the€care€that€an€ordinarily€prudent€person€in€a€likeÐ ° Ðposition€would€use€under€similar€circumstances.€€Second,€Plaintiff€cites€òòCooperative€MilkÐ |Ì ÐService,€Inc.€v.€Hepneróó,€198€Md.€104€(1951)€as€holding€that€when€ð ðmajority€stockholders€useÐ H˜ Ðtheir€voting€power€for€their€own€benefit,€for€some€ulterior€purpose€adverse€to€the€interests€of€theÐ  d ÐCorporation€and€its€stockholders€as€such,€they€violate€their€fiduciary€obligations.ðð€€Ð à 0 ÐWhile€Plaintiff€is€correct€that€òòMd.€Corps.€ÔFRUS.,Ô&€Assocs.€Code€Annóó.€ÔUSFR.,Ôðð€2„405.1(a)€imposes€aÐ ¬ ü  Ðduty€on€directors€of€a€corporation,€Plaintiff€fails€to€state€a€claim€under€ðð€2„405.1€upon€whichÐ xÈ  Ðrelief€can€be€granted€for€two€reasons:€€(1)€the€Plaintiff€alleges€no€facts,€that€if€assumed€to€be€true,Ð D”  Ðwould€overcome€the€statutory€presumption€that€the€act€of€a€director€satisfies€the€standards€ofÐ ` Ðsubsection€(a),€and€(2)€Plaintiff€has€not€brought€a€shareholder€derivative€action€on€behalf€of€theÐ Ü, ÐCorporation,€and€therefore€is€barred€from€asserting€a€statutory€claim€because€of€ðð€2„405.1(g).Ð ¨ø ÐÓ XÓà  àUnder€òòMd.€Corps.€ÔFRUS.,Ô&€Assocs.€Code€Annóó.€ÔUSFR.,Ôðð€2„405.1(a),€a€director€ð ðshall€perform€his€dutiesÐ tÄ Ðas€a€directorðð€in€good€faith,€in€a€manner€the€director€ð ðreasonably€believes€to€be€in€the€bestÐ @ Ðinterests€of€the€corporation,ðð€and€ð ðwith€the€care€that€an€ordinary€prudent€person€in€a€like€positionÐ  \ Ðwould€use€under€similar€circumstances.ðð€€It€is€presumed€that€a€directorððs€action€satisfies€theÐ Ø( Ðstandards€of€care€mandated€by€subsection€(a).€€òòMd.€Corps.€&€Assocs.€ÔFRUS.,ÔCode€Annóó.€ðð€2„405.1(e).€Ð ¤ô ÐÔUSFR.,ÔBecause€of€this€statutory€presumption,€in€order€to€establish€a€prima€facie€cause€of€action,€aÐ p!À  Ðprospective€plaintiff€must€allege€facts€in€its€complaint€that,€if€proved,€would€show€a€lack€of€goodÐ <#Œ" Ðfaith,€that€the€director€acted€in€a€manner€he€did€not€reasonably€believe€to€be€in€the€best€interestsÐ %X $ Ðof€the€corporation,€or€that€the€director€did€not€act€with€the€care€that€an€ordinary€person€in€hisÐ Ô&$"& Ðposition€would€use€under€similar€circumstances.€€Here,€Plaintiff€has€not€presented€any€statementÐ  (ð#( Ðof€fact€in€its€Amended€and€Restated€Complaint€sufficient€to€establish€a€cause€of€action,€even€ifÐ l*¼%* Ðevery€statement€of€fact€were€true.€€Ð 8,ˆ', ÐÝ‚ÿÿÿÝÓ  ÓÓÓÝ  ÝÝ‚ÿÿÿ MÝÝ  Ýà  àFurther,€Plaintiff€is€barred€from€bringing€an€action€against€the€Defendant€directors€underÐ ° Ðthis€statute€because€subsection€(g)€clearly€states,€ð ðNothing€in€this€section€creates€a€duty€of€anyÐ |Ì Ðdirector€of€a€corporation€enforceable€otherwise€than€by€the€corporation€or€in€the€right€of€theÐ H˜ Ðcorporation.ðð€€Because€it€is€Plaintiff,€Michael€Patterson€who€has€brought€this€suit€on€his€ownÐ  d Ðbehalf,€and€he€is€not€suing€in€the€right€of€the€Corporation€for€any€injury€done€to€the€corporation,Ð à 0 Ðthe€Defendant€directors€have€no€duty€to€Plaintiff€under€this€section.€€Ýƒÿÿ MEM݌Р¬ ü  ÐŒÓ  ÓÓÓÝ  Ýà  àAlthough€Plaintiff€asserts€that€the€basis€for€his€action€is€as€a€shareholderððs€derivativeÐ xÈ  Ðaction,€that€assertion€is€incorrect.€€The€purpose€of€a€shareholderððs€derivative€action€is€to€enableÐ D”  Ðindividual€shareholders€to€sue€on€behalf€of€corporation€to€protect€the€corporationððs€interests€fromÐ ` Ðð ðthe€misfeasance€and€malfeasance€of€ððfaithless€directors€and€managers.ðððð€€òòDanielewicz€v.€Arnoldóó,Ð Ü, Ð137€Md.€App.€601,€626€(2001)€(citing€òòCohen€v.€Beneficial€Loan€Corpóó.,€337€U.S.€541,€548Ð ¨ø Ð(1949));€òòsee€Werbowsky€v.€Collombóó,€362€Md.€581,€599€(2001)€(shareholderððs€derivative€actionÐ tÄ Ðdeveloped€ð ðto€enable€shareholders€to€enforce€a€corporate€right€that€the€corporation€failed€toÐ @ Ðassert€on€its€own€behalfðð).€€In€a€shareholderððs€derivative€action,€the€corporation€is€the€real€partyÐ  \ Ðin€interest€and€the€shareholder€is€merely€a€nominal€plaintiff.€€òòWerbowskyóó,€362€Md.€at€599.€€NoÐ Ø( Ðclaims€made€by€the€plaintiff€on€his€own€behalf€may€constitute€a€shareholderððs€derivative€action.€€Ð ¤ô Ðà  àIn€its€Amended€and€Restated€Complaint,€Plaintiff€fails€to€make€any€statement€of€factÐ p!À  Ðshowing€any€injury€or€deprivation€of€a€right€suffered€by€the€Corporation.€€As€in€any€suit,€thereÐ <#Œ" Ðmust€be€an€injury€in€fact€in€order€for€a€court€to€grant€relief.€€No€relief€can€be€granted€where€thereÐ %X $ Ðis€no€relief€needed,€and€without€injury€to€the€Corporation€there€is€no€corporate€claim€for€whichÐ Ô&$"& Ðrelief€can€be€granted.€€Because€there€is€no€corporate€claim€for€which€relief€can€be€granted,Ð  (ð#( Ðâ âPlaintiff€has€no€cause€of€action€under€òòMd.€Corps.€ÔFRUS.,Ô&€Assocs.€Code€Annóó.€ÔUSFR.,Ôðð€2„405.1.€€Ð l*¼%* ÐÓ XÓPlaintiff€also€cites€òòCooperative€Milk€Service,€Inc.€v.€Hepneróó,€198€Md.€104,€114€(1951)Ð ° Ðâ âcreating€a€cause€of€action€in€cases€in€which€ð ðmajority€stockholders€use€their€voting€power€forÐ |Ì Ðtheir€own€benefit,€for€some€ulterior€purpose€adverse€to€the€interests€of€the€corporation€and€itsÐ H˜ Ðstockholders€as€such.ðð€€Plaintiff€misconstrues€the€holding€in€that€case.€€For€a€fiduciary€duty€to€beÐ  d Ðbreached€in€such€a€situation,€the€ulterior€purpose€must€be€adverse€to€the€interests€of€theÐ à 0 Ðcorporation€and€the€corporationððs€stockholders€as€the€equitable€owners€of€the€corporation.€€It€isÐ ¬ ü  Ðnot€sufficient€to€plead€simply€that€an€ulterior€purpose€exists€and€that€the€ulterior€purpose€isÐ xÈ  Ðadverse€to€the€individual€stockholder.€While€the€Amended€and€Restated€Complaint€contends€thatÐ D”  Ðthere€are€certain€injuries€to€the€Plaintiff€himself,€and€that€the€ulterior€purposes€are€not€in€the€bestÐ ` Ðinterest€of€the€Corporation,€there€is€no€statement€of€fact€as€to€what€the€ulterior€motives€are€ofÐ Ü, Ðfacts€that€would€show€that€the€ulterior€purpose€is€òòadverseóó€to€the€Corporationððs€interests.€€Ð ¨ø ÐPlaintiff€argues€in€its€memorandum€that€a€ð ðfairness€ruleðð€is€the€appropriate€test€in€a€caseÐ tÄ Ðof€a€reverse€stock€split€of€a€closely€held€corporation€that€eliminates€a€minority€shareholderÐ @ Ðaccording€to€òòLerner€v.€Lerner€Corp.óó,€132€Md.€App.€32€(2000)€(òòLerner€IIóó).€€Further,€PlaintiffÐ  \ Ðargues€that€the€where€the€court€finds€that€the€reverse€stock€split€is€unfair€to€the€minorityÐ Ø( Ðshareholder,€it€must€order€rescission€of€the€action.€€Plaintiff€misconstrues€and€misapplies€theÐ ¤ô Ðholding€in€òòLerner€IIóó.€€The€Court€of€Special€Appealsðð€actual€holding€in€òòLerner€IIóó€was€that€neitherÐ p!À  Ða€business€purpose€test€nor€a€fairness€test€needed€to€be€applied€in€the€case€because€there€wasÐ <#Œ" Ðsufficient€evidence€to€conclude€that€ð ðthere€were€reasons€to€effect€the€reverse€stock€split€otherÐ %X $ Ðthan€the€desire,€in€and€of€itself,€to€oust€a€minority.ðð€òòId.óó€at€59.€€Plaintiff,€in€the€present€case,Ð Ô&$"& Ðargues€that€there€were€no€reasons€to€effect€the€reverse€stock€split€eliminating€him€as€aÐ  (ð#( Ðshareholder€other€than€the€desire€to€oust€him€as€a€minority;€however,€Plaintiff€fails€to€plead€anyÐ l*¼%* Ðfact€that€would€lead€to€that€conclusion.€€Ð 8,ˆ', ÐEven€if€his€ouster€were€the€Defendantððs€goal€in€effectuating€the€reverse€stock€split,Ð ° ÐPlaintiff€would€not€have€a€cause€of€action€without€additional€facts.€ð ð[T]he€use€of€a€reverse€stockÐ |Ì Ðsplit€and€elimination€of€fractional€shares€for€the€purpose€of€eliminating€minority€stockholders,€ifÐ H˜ Ðnot€within€one€of€the€"limited€circumstances"€discussed€above,€see€Walter€J.€Schloss€Assoc.,€73Ð  d ÐMd.€App.€at€743,€is€permissible€under€Maryland€law.€See€òòLerner€v.€Lerneróó,€306€Md.€771,€511Ð à 0 ÐA.2d€501€(1986).ððÐ ¬ ü  ÐCount€II€of€the€Amended€and€Restated€Complaint€adds€absolutely€no€factual€informationÐ xÈ  Ðto€the€pleading€that€was€not€included€in€Count€I€and€does€nothing€more€than€express€argumentÐ D”  Ðthat€is€impermissible€in€a€pleading.€€There€is€no€claim€stated€in€either€Counts€I€or€II€for€whichÐ ` Ðrelief€can€be€granted.Ð Ü, ÐÓ XÓà  àThe€only€language€in€Count€III,€in€addition€to€the€standard€incorporation€of€the€factualÐ ¨ø Ðallegations€contained€in€the€previous€paragraphs,€consists€entirely€of€Paragraph€21:€ð ðThat€theÐ tÄ Ðexercise€by€the€Majority€Stockholders€and€the€directors€of€their€voting€power€for€their€ownÐ @ Ðbenefit,€to€cause€stock€of€the€Plaintiff€to€be€diluted,€for€an€ulterior€purpose€of€their€own€selfÐ  \ Ðinterest€and€not€the€interest€of€the€Corporation,€is€a€violation€of€their€fiduciary€duties€andÐ Ø( Ðobligations.ðð€€Stripped€of€all€argument,€that€paragraph€simply€states€the€fact€that€the€majorityÐ ¤ô Ðstockholders€and€the€directors€exercised€their€voting€power.€Ð p!À  Ðà  àPlaintiff€styles€Count€IV€as€an€action€for€ð ðFraud€by€Fiduciary.ðð€€Plaintiff€fails€to€pleadÐ <#Œ" Ðany€fact€that€would€satisfy€any€of€the€elements€of€fraud.€€In€Maryland,€to€recover€for€fraud,€aÐ %X $ Ðplaintiff€must€show:€Ð Ô&$"& ÐÓ XÓthat€(1)€the€defendant€made€a€false€representation€to€the€plaintiff,€(2)€the€falsity€Ð  (ð#( ÐÓ XÓÓ XÓÓE.` ¸ hÀpÈ xÐ (#°°ŒX(#EÓof€the€representation€was€either€known€to€the€defendant€or€the€representation€was€Ð l*¼%* Ðmade€with€reckless€indifference€to€its€truth,€(3)€the€misrepresentation€was€made€Ð 8,ˆ', Ðfor€the€purpose€of€defrauding€the€plaintiff,€(4)€the€plaintiff€relied€on€the€Ð ° Ðmisrepresentation€and€had€the€right€to€rely€on€it,€and€(5)€the€plaintiff€sufferedÐ |Ì Ðcompensable€injury€as€a€result€of€the€misrepresentation.Ð H˜ ÐÓ XÓÓH.°°` ¸ hÀpÈ xÐ (#‹X(#HÓòòHoffman€v.€Stamperóó,€385€Md.€1,€28€(2005).€€Ð  d Ðà  àIn€Paragraph€22,€Plaintiff,€instead€of€stating€facts,€argues€that€the€Defendants€have€noÐ à 0 Ðauthority€to€modify€the€Corporationððs€charter€and€that€the€Plaintiff€is€entitled€to€protectionÐ ¬ ü  Ðagainst€fraudulent€or€illegal€action€by€the€Defendants.€€There€is€no€fact€that,€if€true,€proves€anyÐ xÈ  Ðelement€of€fraud.Ð D”  Ðà  àParagraph€23€argues€that€ð ðthe€dilution€of€the€Plaintiffððs€stock,€as€alleged€herein,€andÐ ` Ðfailure€to€pay€dividends€were€ulterior€purposes,€adverse€to€the€minority€and€self€serving€to€theÐ Ü, ÐDefendantsðð€Paragraph€24€further€argues€that€the€freeze„out€of€Plaintiff€from€his€shareholderÐ ¨ø Ðinterest€and€the€failure€to€pay€dividends€has€ð ða€significantly€polar€impactðð€between€theÐ tÄ ÐDefendants€and€Plaintiff,€and€without€any€factual€allegation,€states€that€Plaintiff€is€damagedÐ @ Ðsomehow€as€a€result.€€Neither€paragraph€states€any€fact€that€would€create€a€cause€of€action.€Ð  \ ÐÓ XÓNothing€in€Count€IV€amounts€to€a€factual€statement,€which,€if€taken€as€true€for€theÐ Ø( Ðpurposes€of€a€motion€to€dismiss,€would€possibly€satisfy€any€of€the€elements€of€civil€fraud.€€CountÐ ¤ô ÐIV€fails€to€state€a€claim€for€which€relief€can€be€granted.Ð p!À  ÐÓ XÓÓ  ÓIII.Ð <#Œ" ÐÓ  Óà  àJust€as€there€has€been€no€factual€allegation€of€injury€to€the€Corporation€for€which€reliefÐ %X $ Ðcan€be€granted,€Plaintiff€has€not€averred€any€statement€of€fact€showing€that€he€has€suffered€theÐ Ô&$"& Ðtype€of€injury€in€fact€for€which€relief€can€be€granted.€€Ð  (ð#( ÐÝ‚ÿÿÿÝÓ  ÓÓÓÝ  ÝÝ‚ÿÿÿuÝÝ  Ýà  àAccording€to€Plaintiffððs€logic,€(1)€because€the€other€shareholders€of€the€Corporation€andÐ l*¼%* Ðthe€board€of€directors€issued€additional€stock€to€themselves,€for€which,€as€Plaintiff€does€notÐ 8,ˆ', Ðdispute,€they€paid€fair€consideration€to€the€Corporation,€(2)€then€used€the€extra€voting€power€ofÐ ° Ðthose€shares€to€achieve€the€necessary€80€percent€majority€to€amend€the€charter,€(3)€creating€theÐ |Ì Ðreverse€stock€split€by€which€Plaintiffððs€now€fractional€share€was€eliminated,€and€for€whichÐ H˜ ÐPlaintiff€was€offered€cash€payment€for€the€fair€market€value€of€his€share€of€the€Corporation,€(4)Ð  d ÐPlaintiff€has€suffered€an€injury€by€losing€his€share€of€the€Corporation,€which€entails€a€loss€ofÐ à 0 Ðvoting€rights€and€a€loss€of€the€ability€to€buy€the€other€shares€of€the€Corporation€before€theyÐ ¬ ü  Ðwould€be€sold€to€outsiders.€€Plaintiff€claims€that€this€injury€entitles€him€to€injunctive€relief,Ð xÈ  Ðspecifically€rescission€of€the€issuance€of€the€390€additional€shares€and€the€rescission€of€allÐ D”  Ðactions€taken€at€the€Stockholderððs€meeting€of€May€16,€2005.݃ÿÿuUu݌Р` ÐŒÓ  ÓÓÓÝ  Ýà  àThe€Corporation€lawfully€issued€additional€stock€to€the€Defendant€shareholders€andÐ Ü, Ðreceived€adequate€compensation€for€those€shares.€€A€corporation€ð ðfrom€time€to€time€mayÐ ¨ø Ðissueð8ðStock€of€any€class€authorized€by€its€charter.ðð€€òòMd.€Corps.€&€Assocs.€Code€Annóó.€ðð€2„201.€Ð tÄ ÐPlaintiff€states€no€fact€in€the€Amended€and€Restated€Complaint€that€would€show€the€issuance€ofÐ @ Ðadditional€stock€to€be€unauthorized€by€its€charter.€€Plaintiff€does€not€allege€that€the€CorporationÐ  \ Ðdid€not€receive€fair€consideration€for€the€stock.€€Ð Ø( Ðà  àA€reverse€stock€split€is€legitimate€under€statute.€€A€corporation€may€ð ðamend€its€charterÐ ¤ô Ðfrom€time€to€time€in€any€respect,€provided€thatð8ðIf€the€amendment€effects€a€change€in€stock€or€inÐ p!À  Ðthe€rights€of€stockholdersð8ðthe€amendment€shall€contain€the€provisions€necessary€to€effect€theÐ <#Œ" Ðchangeð8ð.ðð€€òòMd.€Corps.€&€Assocs.€ÔFRUS.,ÔCode€Annóó.€ðð€2„602(a).€€ÔUSFR.,ÔIn€addition,€a€corporation€may€amendÐ %X $ Ðits€charter€to€ð ð[c]hange€issued€or€unissued€shares€of€stock€of€any€class,€whether€with€or€withoutÐ Ô&$"& Ðpar€value,€into€a€different€number€of€shares€of€the€same€class€or€into€the€same€or€a€differentÐ  (ð#( Ðnumber€of€shares€of€another€class,€either€with€or€without€par€value.ðð€òòMd.€Corps.€&€Assocsóó.€ðð€2„Ð l*¼%* Ð602(b)(8).€€Plaintiff€does€not€allege€any€violation€of€this€provision.€€Ð 8,ˆ', Ðà  àThe€Corporation€could€lawfully€amended€its€charter€to€change€418€shares€of€stock€into€1Ð ° Ðshare,€and€convert€288€shares€of€stock€into€fractional€share€of€288/418€under€ðð€2„602(b)(8).€Ð |Ì ÐOnce€Plaintiffððs€shares€were€converted€into€a€fractional€share,€it€decided,€in€accordance€withÐ H˜ Ðstatute,€to€ð ð[p]ay€cash€for€the€fair€value€of€[the]€fractional€share€of€stock.ðð€€òòMd.€Corps.€&€Assocsóó.Ð  d Ððð€2„214(a)(4).€Ð à 0 Ðà  àPlaintiff€has€stated€no€facts€that,€if€true,€would€support€an€allegation€that€the€CorporationÐ ¬ ü  Ðor€its€directors€have€violated€any€statutory€or€charter€provision.€€Although€the€Plaintiff€arguesÐ xÈ  Ð(without€supporting€factual€statements)€throughout€the€pleading€that€the€Defendants€acted€toÐ D”  Ðcircumvent€the€charter,€they€did€not€ð ðcontraveneðð€the€charter.€€It€is€technically€true€that€they€didÐ ` Ðgo€around,€or€circumvent,€the€charterððs€original€language€through€the€act€of€amendment,Ð Ü, Ðhowever€they€did€not€go€against,€or€ð ðcontraveneðð€the€charter€by€amending€the€charter€without€theÐ ¨ø Ðsufficient€majority.€€Everything€the€Defendants€did€was€ð ðconvenient,ðð€or€going€with,€the€charter,Ð tÄ Ðand€with€the€statutory€mandates.Ð @ ÐÓ  ÓIV.Ð  \ ÐÓ XÓÓ  Óà ` àDefendants,€in€addition€to€moving€for€dismissal,€ask€the€court€for€sanctions€in€theÐ Ø( Ðform€of€attorneysðð€fees€and€costs€under€Md.€Rule€1„341.€€In€that€regard€we€will€do€no€more€thanÐ ¤ô Ðquote€the€sage€comments€of€the€Honorable€Howard€Chasnow,€Retired€Judge€of€the€Court€ofÐ p!À  ÐAppeals.€€Judge€Chasnow€noted€that€ð ðin€too€many€cases,€the€pleadings€that€evidence€the€mostÐ <#Œ" Ðbad€faith€and€the€least€justification€are€motions€requesting€costs€and€attorneyððs€fees.ðð€Ð %X $ ÐòòZdravkovich€v.€Bell€Atlantic„Tricon€Leasing€Corp.óó,€323€Md.€200,€212€(1991).Ð Ô&$"& ÐÐ  (ð#( Ðâ âÓ XÓÓ  ÓV.Ð l*¼%* ÐÓ  Óà  àFor€the€reasons€aforestated,€it€is€this€31òòstóó€day€of€January€2006,€by€the€Circuit€Court€forÐ ° Ðâ âBaltimore€County,Ð |Ì ÐÓ XÓò òORDERED:€ó óà ¸ àthat€the€Defendantððs€Motion€to€Dismiss€(16,000)€be,€and€it€is€hereby,Ð H˜ Ðò òGRANTEDó ó;€and€futher€Ð  d Ðò òORDERED:€ó óthat€Plaintiffððs€Amended€and€Restated€Complaint€(15,000)€beÐ à 0 Ðò òDISMISSED,€WITH€LEAVE€TO€AMEND€ó ówithin€thirty€(30)€days€in€order€to€give€the€PlaintiffÐ ¬ ü  Ðone€last€opportunity€to€plead€actual€facts€rather€than€legal€conclusions.Ð xÈ  ÐÓ XÓÌÓÓà  àà ` àà ¸ àà  àà h àà À àà  àà p à_________________________Ð ` ÐÓ XÓÓ hÓÓ3pÈ xÐ (#°°ŒX(#3ÓLawrence€R.€DanielsÐ öF ÐÓ XÓÓ hÓÓH.°°` ¸ hÀpÈ xÐ (#…X(#HÓà  àà ` àà ¸ àà  àà h àà À àà  àà p àJudgeà È àÐ Ü, ÐÓÓÌÓ  Ó