Tuesday, February 27, 2007

Tobacco Technology, Inc. v. Taiga International, N.V. (Maryland U.S.D.C.) (Not Approved for Publication)

Memorandum Opinion and Order Denying Motion to Dismiss pursuant to Rule 12(b)(6). Filed February 26, 2007 -- Opinion by Judge Catherine C. Blake. (Not approved for publication.)

The defendants moved to dismiss the complaint on grounds that the plaintiff's claims were time-barred and that Maryland does not recognize an omnibus cause of action for "Breach of Fiduciary Duty."

The court, sitting in diversity and applying Maryland law, resolved three questions: 1) Whether an agent's knowledge of its principal's cause of action can be imputed to the principal for the purpose of triggering the statute of limitation when the agent's interests are adverse to the principal on that matter; 2) whether a plaintiff's failure to discover a cause of action in the context of alleged active concealment of that cause of action can be decided as a matter of law upon a motion to dismiss; and 3) whether Maryland recognizes an omnibus cause of action for "Breach of Fiduciary Duty."

: In this case, the complaint alleged sufficient facts concerning the agent's adverse interests to preclude imputation of the agent's knowledge of the cause of action to the principal as a matter of law. In addition, the complaint alleged sufficient facts concerning the defendants' efforts to conceal the wrongdoing that the failure to discover the cause of action earlier could not be attributed to the plaintiff's lack of due diligence as a matter of law. Finally, Maryland case law supports the conclusion that while the State does not recognize a universal tort for the redress of breach of fiduciary duty, breach of an agent's duty to his principal does provide a claim for breach of fiduciary duty.

Accordingly, the court denied the motion to dismiss.

This case was the subject of a previous opinion concerning a motion to seal synopsized here.

The Court's opinion denying the motion to dismiss is available in PDF. The order is also available in PDF.

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