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Motion to Dismiss Upheld for Failure to State a Claim and Failure to Obtain Leave to Amend
In Rashid Mohiuddin v. Doctors Billing & Management Solutions, Inc., et al., ________ Md. App. _________ (Nov. 1, 2010), the Court of Special Appeals addressed two issues; (1) whether the trial court had sufficient grounds to dismiss Plaintiff?s complaint on the grounds that it failed to state a cause of action, and (2) whether the trial court was correct in dismissing Plaintiff's fourth amended complaint for failure to amend his complaint in accordance with Maryland Rule 2-322(c).

Mohiuddin was a physician who entered into an employment contract whereby he agreed to provide physician services to Doctors Billings' patients in exchange for salary and benefits. In addition, Mohiuddin would occasionally be assigned to see patients of Physicians House Calls, Inc. (PHC), a separate corporation that provides patients with physicians for home visits.

Mohiuddin filed a second amended complaint to recover unpaid wages and restitution for work he performed under his employment contract and asserted three counts against PHC: (1) violation of Maryland's Wage Payment and Collection Law; (2) quantum meruit; and (3) unjust enrichment. PHC responded by filing a motion to dismiss for failure to state a claim. The trial court granted PHC?s motion because it "didn?t believe that there's been a sufficient demonstration of a connection to [PHC] to justify leaving them in at this time."

The three claims were addressed as follows:

(1) Violation of Maryland's Wage Payment and Collection Law - Mohiuddin failed to allege sufficient facts to raise an inference that he was either engage to work by PHC, or that PHC exercised any degree of control over appellant in his work as a physician.

(2) Quantum Meruit - Mohiuddin failed to allege that either Doctors Billing or PHC was obligated to pay him for his services with PHC. Without the allegation that both parties intended that PHC was required to pay him for his services, Mohiuddin failed to plead the existence of a mutual agreement between the parties.

(3) Unjust Enrichment - Mohiuddin was required to plead facts comprising the cause of action with sufficient specificity, however, the Complaint failed to assert that PHC was enriched and left the Court guessing why equity would require PHC to compensate him.

In upholding the dismissal for failure to state a claim, the Court stated that "in order to survive a motion to dismiss, a complaint must plead 'the facts comprising the cause of action . . . with sufficient specificity. Bald assertions and conclusory statements by the pleader will not suffice".

The trial court's initial dismissal of Mohiuddin's second amended Complaint was "without prejudice". Seven months later, Mohiuddin filed a fourth amended complaint renaming PHC. In turn, PHC filed another motion to dismiss which the trial court granted "with prejudice".

The Court of Special Appeals noted that the words "with prejudice" are ordered in cases where the dismissal is based on an appraisal of the substantive merits of the case and prohibits a refilling. The words "without prejudice" is more likely in cases where dismissal is based on some procedural glitch that does not engage the merits or res judicata and can be rectified such that it permits a refilling.

In addition, Maryland Rule 2-322(c) provides that "an amended complaint may be filed only if the court expressly grants leave to amend." Thus, whether a pleading may be amended is resolved by the trial court by explicitly stating within the four corners of the Order itself, "with leave to amend." Leave to amend is either expressly stated on the face of the order or it does not exist, there is no in-between. If the Order grants leave to amend, there is no final judgment and the case is not closed. By contrast, an order that does not contain "with leave to amend" closes the case finally and there is nothing to amend, unless the case is being kept alive by some other means. Accordingly, the Court held that in the absence of the trial court granting leave to amend, Mohiuddin had no entitlement to amend at any time, early or late. The requirement that there must be an express and unqualified grant of leave to amend within the four corners of the dismissal order is ironclad.

Posted by R. Anderson on 12/06/2010 at 04:51 PM