Case Mdd 8 21 Cv 03210 Cross River V 3 Beas Doc103 Opinion Post Remand 2026 04 21 - Cross River V 3 Beas

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      Case 8:21-cv-03210-TJS          Document 103         Filed 04/21/26   Page 1 of 10



                           IN THE UNITED STATES DISTRICT COURT
                              FOR THE DISTRICT OF MARYLAND


 CROSS RIVER BANK,                                *

        Plaintiff,                                *

                                                  *          Case No. TJS-21-3210
 v.
                                                  *
 3 BEA’S ASSISTED LIVING LLC, et al.,
                                                  *
        Defendants.
                               *      *       *       *      *     *

                                MEMORANDUM AND ORDER

       Pending before the Court are the following motions: Plaintiff Cross River Bank’s Motion

for Modification of, or Relief From, Judgment (“Rule 60 Motion”) (ECF No. 90), Motion to Set

Briefing Schedule for Motion for Summary Judgment (ECF No. 98), Motion for Leave to Amend

Complaint (“Motion to Amend”) (ECF No. 99), and Motion to Extend Time (ECF No. 101), as

well as the Motion to Compel Answers to Interrogatories (“Motion to Compel”) (ECF No. 92)

filed by Defendants Connie Stewart (“Ms. Stewart”) and 3 Bea’s Assisted Living LLC (“3 Bea’s”).

Having considered the parties’ submissions (ECF Nos. 90, 92, 93, 94, 97, 98, 99, 100, 101 & 102),

I find that a hearing is unnecessary. See Loc. R. 105.6.

       For the reasons explained below, the Court will grant Plaintiff’s Motion to Amend. The

Court will deny as moot Plaintiff’s Rule 60 Motion and Motion to Extend Time. And the Court

will deny Defendants’ Motion to Compel because it is untimely. Defendants’ Brief for Legal Issues

Remanded by the Fourth Circuit requires no action. The parties will be ordered to submit a joint

proposed briefing schedule on Plaintiff’s forthcoming motion for summary judgment.
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I.     Procedural Background

       This case concerns a loan made by Plaintiff to 3 Bea’s that has not been repaid. See Cross

River Bank v. 3 Bea’s Assisted Living LLC, No. 23-2271, 2025 WL 1577563, at *1 (4th Cir. June

4, 2025). During the height of the COVID-19 pandemic, Ms. Stewart applied for a Paycheck

Protection Program (“PPP”) loan on behalf of her business, 3 Bea’s. Plaintiff approved the loan

but mistakenly funded it in the amount of $1,706,711 (the maximum loan amount that 3 Bea’s

qualified for under the PPP was $20,680). See ECF No. 90 at 3. Upon realizing its mistake, Plaintiff

attempted to recall the loan but was only able to recall $4,717.53 from 3 Bea’s bank account.

Plaintiff alleges that the loan has not been repaid, and that Ms. Stewart has treated the windfall to

3 Bea’s as her “personal piggybank.” Id. at 4. Plaintiff filed this lawsuit to recover the proceeds of

the loan.

       Previously, the Court granted Plaintiff’s motion for summary judgment in part, finding that

Plaintiff was entitled to judgment against Defendants on its claims for breach of contract and

fraudulent conveyance. ECF Nos. 53 & 54. The Court denied Plaintiff’s motion as to its claims for

money had and received, unjust enrichment, conversion, fraud/misrepresentation, and negligent

misrepresentation. Id. In doing so, the Court explained that Plaintiff could not prevail on both

contract and quasi-contract claims arising from the same subject matter. Id. And as to the

fraud/misrepresentation and negligent misrepresentation claims, the Court found that Plaintiff had

failed to establish that it was entitled to judgment as a matter of law. Id. At the Court’s invitation,

Plaintiff moved to voluntarily dismiss its claims for money had and received, unjust enrichment,




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conversion, fraud/misrepresentation, and negligent misrepresentation, and the Court granted the

motion.1 ECF Nos. 55 & 56.

       Ms. Stewart appealed and the Fourth Circuit vacated the Court’s judgment as to Count I,

holding that the Court erred in finding that Plaintiff was entitled to judgment as a matter of law on

its breach of contract claim against Ms. Stewart.

       On remand, the Fourth Circuit directed this Court to

       determine whether Section 3-402(b) of the Maryland Commercial Code applies
       here, see Md. Code, Com. Law. § 3-104(a) (defining “negotiable instrument”), and,
       if so, how that statute bears on whether Stewart signed the note in her personal
       capacity, see § 3-402(b)(2) (providing different rules for answering that question
       when “the form of” a representative's signature “does not show unambiguously that
       the signature is made in a representative capacity”).

Cross River Bank, 2025 WL 1577563, at *3. Consistent with the Fourth Circuit’s instruction, the

Court directed the parties to submit their proposal for how the Court should proceed. ECF No. 80.



       1
         As Plaintiff correctly notes, Rule 41 applies to dismissal of actions, and not to claims or
counts. See ECF No. 97 at 10 n.3; Skinner v. First Am. Bank of Va., 64 F.3d 659 (Table), 1995 WL
507264, at *2 (4th Cir. 1995) (“Because Rule 41 provides for the dismissal of actions, rather than
claims, Rule 15 is technically the proper vehicle to accomplish a partial dismissal.”). A proposed
amendment to Rule 41 is in the comment stage at present. The amendment would expand the reach
of Rule 41 to dismissal of claims, in addition to actions. Committee on Rules of Practice and
Procedure of the Judicial Conference of the United States, Preliminary Draft of Proposed
Amendments to the Federal Rules of Appellate, Bankruptcy, Civil, and Criminal Procedure, and
the Federal Rules of Evidence 51–54 (2025), https://perma.cc/E3XK-6NXK. If adopted, the
amendment would go into effect on December 1, 2027. Still, the Court does not accept Plaintiff’s
position that the Court’s order granting Plaintiff’s motion for voluntary dismissal of claims is a
legal nullity. Taking this argument to its conclusion would mean that the Fourth Circuit was
without jurisdiction under 28 U.S.C. § 1291 to render its decision in this case. And there is no
question that if Plaintiff had sought to amend its complaint to eliminate the claims for which the
Court denied summary judgment, the Court would have been required to accept the amendment
under Rule 15(a). Plaintiff’s dismissal of these claims accomplished the same thing. Skinner, 1995
WL 507264, at *2 (“Since the structure of the two rules is similar, and since the district court's
discretion is involved when leave of court is required, whether plaintiff’s motion is made under
Rule 15 or under Rule 41(a)(2), the choice of rules is largely a formal matter.”) (quoting 5 J. Moore,
J. Lucas & J. Wicker, Moore's Federal Practice ¶ 41.06–1, at 41–92 (1995)); see also Monge v.
Portofino Ristorante, 751 F. Supp. 2d 789, 792 n.1 (D. Md. 2010) (explaining that Rule 1 instructs
the Court “not [to] exalt form over substance”).
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        Plaintiff informed the Court that it did not intend to pursue its breach of contract claim

against Ms. Stewart and that it would instead proceed against her on its quasi-contract claims. ECF

No. 82. Thereafter, the parties filed the multitude of motions now before the Court.

II.     Discussion

        A.      Motion to Amend

        Plaintiff moves for leave to file a Second Amended Complaint. ECF No. 99. The Second

Amended Complaint differs from the Amended Complaint (ECF No. 9) in a single respect: it omits

Plaintiff’s factual allegations and breach-of-contract claim against Ms. Stewart. ECF No. 99-2 at

6-8, 16. This change is consistent with Plaintiff’s earlier notice to the Court “that it does not intend

to continue its pursuit of Count I with respect to Defendant Connie Stewart.” ECF No. 89. Plaintiff

argues that its proposed amendment is in the interests of justice because it is not prejudicial to

Defendants and because the amendment is not made in bad faith. ECF No. 99 at 1. Plaintiff also

argues that there is good cause to permit the amendment because it will streamline the issues in

the case. Defendants state that they consent to the proposed amendment, ECF No. 102 at 4 n.3, but

also argue that some of the claims are barred by the statute of limitations, id. at 10-13.

        A party may amend its pleading once as a matter of course within 21 days after serving it

or within 21 days after service of a motion under Fed. R. Civ. P. 12(b), whichever is earlier. Fed.

R. Civ. P. 15(a)(1). When the right to amend as a matter of course expires, “a party may amend its

pleading only with the opposing party’s written consent or the court’s leave.” Fed. R. Civ. P.

15(a)(2). Whether to grant leave to amend is a matter left to the discretion of the Court, see

Simmons v. United Mortg. & Loan Inv., LLC, 634 F.3d 754, 769 (4th Cir. 2011), though the Court

must “freely give leave when justice so requires,” Fed. R. Civ. P. 15(a)(2). Denial of leave to amend

is appropriate “only when the amendment would be prejudicial to the opposing party, there has



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been bad faith on the part of the moving party, or the amendment would be futile.” Edwards v. City

of Goldsboro, 178 F.3d 231, 242 (4th Cir. 1999) (emphasis in original) (quoting Johnson v.

Oroweat Foods Co., 785 F.2d 503, 509 (4th Cir. 1986)); see also Galustian v. Peter, 591 F.3d 724,

729 (4th Cir. 2010) (“It is this Circuit’s policy to liberally allow amendment in keeping with the

spirit of Federal Rule of Civil Procedure 15(a).”).

       Leave to amend will be denied for claims barred by the statute of limitations because

allowing time-barred claims to proceed would be futile. See Mbanusi v. Liberty Mut. Ins. Co., No.

DLB-23-777, 2025 WL 1311686, at *2 (D. Md. May 6, 2025) (citing Foman v. Davis, 371 U.S.

178, 182 (1962)). When a party seeks leave to amend to bring a facially untimely claim, the Court

must consider whether the claim is “saved by the relation-back authorized by Rule 15(c).”

Goodman v. Praxair, Inc., 494 F.3d 458, 466 (4th Cir. 2007).

       Rule 15(c) “governs when an amended pleading ‘relates back’ to the date of a timely filed

original pleading and is thus itself timely even though it was filed outside an applicable statute of

limitations.” Krupski v. Costa Crociere S. p. A., 560 U.S. 538, 541 (2010). Under Rule 15(c)(1)(B),

“an amendment to a pleading relates back to the date of the original pleading when . . . the

amendment asserts a claim or defense that arose out of the conduct, transaction, or occurrence set

out—or attempted to be set out—in the original pleading.” Judge Boardman explained when

claims relate back under this provision:

       To relate back, “there must be a factual nexus between the amendment and the
       original complaint.” Grattan v. Burnett, 710 F.2d 160, 163 (4th Cir. 1983), aff'd,
       468 U.S. 42 (1984). That is, “the amended claims and the original claims [must]
       share a core of operative facts.” Steven S. Gensler, Federal Rules of Civil
       Procedure: Rules & Commentary (“Rules & Commentary”) Rule 15 (2022). If
       “there is some factual nexus, an amended claim is liberally construed to relate back
       to the original complaint if the defendant had notice of the claim and will not be
       prejudiced by the amendment.” Grattan, 710 F.2d at 163; Bradley v. Veterinary
       Orthopedic Sports Med. Grp., No. DKC-19-2662, 2022 WL 703916, at *8 (D. Md.
       Mar. 9, 2022). Thus, “relation back is proper when the amended complaint


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       amplifies the existing allegations or makes the existing allegations more definite
       and precise” by “present[ing] additional facts.” Gensler, Rules & Commentary Rule
       15. Relation back also is proper even if the amendment presents a “new claim [that]
       involve[s] different sources of proof” or “new legal theories,” as long as “the core
       facts are the same.” Id. In contrast, relation back is not proper if the amendment
       presents “new claims [that] arise from an entirely different event or set of facts.”
       Id.

Mbanusi, 2025 WL 1311686, at *2.

       The “fundamental question” in deciding whether a claim relates back under Rule

15(c)(1)(B) “is whether the original complaint served the notice-giving purpose of the limitations

period by providing fair notice—within the applicable limitations period—of the basis for liability

that was added in the amended complaint.” Id. (quoting Gensler, Rules & Commentary Rule 15).

When a party “has been notified of litigation concerning a particular occurrence,” they have “been

given all the notice that statutes of limitations were intended to provide.” Id. (quoting Baldwin

Cnty. Welcome Ctr. v. Brown, 466 U.S. 147, 149 n.3 (1984)); Krupski, 560 U.S. at 550 (2010)

(explaining that “the purpose of relation back [is] to balance the interests of the defendant protected

by the statute of limitations with the preference expressed in the Federal Rules of Civil Procedure

in general, and Rule 15 in particular, for resolving disputes on their merits”). When the policies of

statutes of limitations have been effectively served, “Rule 15(c) must be understood to freely

permit amendment of pleadings and their relation-back.” Id. (quoting Goodman, 494 F.3d at 468).

And where “the substantive allegations in [an] amended complaint [are] identical to those

contained in the initial complaint, the requirements of relation back under Rule 15(c) clearly

apply.” Freight Drivers & Helpers Loc. Union No. 557 Pension Fund v. Penske Logistics LLC,

784 F.3d 210, 218 (4th Cir. 2015). Relation back is proper “even if the amendment presents a ‘new

claim [that] involve[s] different sources of proof’ or ‘new legal theories,’ as long as ‘the core facts




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are the same.’” Robinson v. Pytlewsti, No. DLB-19-1025, 2022 WL 2359359, at *8 (D. Md. June

30, 2022) (quoting Gensler, Rules & Commentary Rule 15).

       In this case, Plaintiff seeks to reinstate two of the claims that it previously dismissed. It

dismissed these claims because it prevailed on its breach of contract claim as to both defendants.

Because the Fourth Circuit vacated this Court’s judgment on the breach of contract claim as to Ms.

Stewart, Plaintiff now intends to proceed against her on its quasi-contract theories. The claims

Plaintiff seeks to reinstate (money had and received and unjust enrichment) were part of this

litigation from its inception. They arose from the same conduct, transaction, and occurrence as the

claims that remained in the case throughout: Defendants’ receipt, retention, and disposition of loan

proceeds, and their refusal to repay or return the proceeds to Plaintiff. Defendants were on notice

of these claims within the limitations period, having litigated them through summary judgment

before Plaintiff’s voluntary dismissal. Because the substantive allegations underlying the revived

claims are identical to those in the prior pleadings, relation back under Rule 15(c)(1)(B) is clearly

satisfied.2 See Freight Drivers, 784 F.3d at 218. The Court rejects Defendants’ statute-of-

limitations argument.

       The Court further finds that Plaintiff’s proposed amendment will not prejudice Defendants.

Defendants were on notice of the non-contract claims before the statute of limitations passed. They

defended against these claims at summary judgment. Plaintiff only lost these claims on summary




       2
           Rule 15(c)(1)(A) provides another basis for relation back. This rule states that an
amendment relates back when “the law that provides the applicable statute of limitations allows
relation back.” Fed. R. Civ. P. 15(c)(1)(A). Maryland law would allow relation back because
Plaintiff’s quasi-contract claims arise from “essentially the same” operative facts as its contract
claim. See Reichert v. Hornbeck, No. JMC-24-1865, 2025 WL 2062199, at *8 (D. Md. July 23,
2025) (“Under Maryland law, an amendment relates back to a prior pleading, so long as the
operative factual situation, stated in the amended pleading, remains essentially the same, as alleged
in the prior pleading.”) (internal citations and quotation marks omitted).
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judgment because it prevailed on its breach of contract claim, which precluded it from obtaining

relief on the quasi-contract claims. Now that the Fourth Circuit has partially vacated the Court’s

judgment on the breach of contract claim, it is not unfairly prejudicial to require Defendants to

face liability on the other claims. To hold otherwise would be to grant Defendants a (second)

windfall, which would offend basic equitable principles. Finally, Plaintiff’s proposed amendment

has not been made in bad faith. Plaintiff seeks to recover against Defendants for a loan that has not

been repaid. Its legal strategy may have changed since the Fourth Circuit’s ruling, but its legal

theories and claims have remained consistent. Because Plaintiff’s proposed amendment is not

futile, unfairly prejudicial, or the product of bad faith, the Court is required to grant Plaintiff leave

to file its Second Amended Complaint.3

          Because the Court will grant Plaintiff leave to amend, the Court agrees with Plaintiff that

the Rule 60 Motion (ECF No. 90) may be denied as moot.4 The same goes for Plaintiff’s Motion

to Extend Time (ECF No. 101). The Court finds that Defendants’ brief concerning the issues

remanded by the Fourth Circuit is not relevant to the claims of the Second Amended Complaint.

And to the extent that Defendants’ arguments are relevant, they may raise them in summary

judgment briefing. The Court will grant Plaintiff’s Motion to Set Briefing Schedule (ECF No. 98)

and direct that the parties submit a joint proposed briefing schedule to resolve the remaining

claims.



          3
          Although the Second Amended Complaint includes claims for fraud/misrepresentation
and negligent misrepresentation (ECF No. 60 ¶¶ 60-78), Plaintiff only intends to proceed as to
Counts II and III against Ms. Stewart, and the “unadjudicated portion of Count VII” as to both
Defendants. ECF No. 98 at 1. Like Defendants, the Court is uncertain how Plaintiff might obtain
further relief in connection with Count VII. See ECF No. 102 at 14. Nonetheless, the Court declines
to resolve the issue of Count VII in the abstract and will instead permit the parties to address it
through briefing.
        4
          Had the Court not granted leave to amend, the Court would have granted the Rule 60
Motion pursuant to Rule 60(b)(1) and (5).
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       B.      Motion to Compel

       Defendants move to compel Plaintiff to respond to their discovery requests. ECF No. 92.

The Motion to Compel must be denied because it is untimely. Discovery closed on December 31,

2022.5 ECF No. 19. Under the scheduling order, all discovery requests were required to be “served

in time to assure that they are answered before the discovery deadline.” ECF No. 17 at 2. Here,

Defendants’ discovery requests were served on July 31, 2025, well after the close of discovery. To

the extent that Defendants take issue with the discovery responses that Plaintiff served in 2022,

their motion runs afoul of the Local Rules, which require that discovery disputes be presented to

the Court promptly. See Loc. R. 104.8; see also Guideline 1(f) in Appendix A of the Local Rules.

For these reasons, Defendants’ Motion to Compel is denied as untimely.6

III.   Conclusion

       For the reasons stated above, Plaintiff’s Motion to Amend (ECF No. 99) is GRANTED.

The Clerk of Court shall file the document at ECF No. 99-1 as Plaintiff’s Second Amended

Complaint. Plaintiff’s claims against Ms. Stewart as to Counts II and III, and against both

Defendants in the purportedly “unadjudicated portion of Count VII” shall proceed. Because the

only change in the Second Amended Complaint is the elimination of Plaintiff’s breach of contract

claim as to Ms. Stewart (and allegations relevant thereto), Defendants will not be required to file




       5
          Defendants argue that the discovery deadline was “unclear” because “the parties had
agreed on multiple occasions that discovery should be delayed until after the settlement
conference.” ECF No. 92 at 4. But the Court never approved such an agreement, and a scheduling
order “may be modified only for good cause and with the judge’s consent.” Fed. R. Civ. P. 16(b)(4).
        6
          The Court also finds no good cause to reopen discovery. Plaintiff has dismissed its breach
of contract claim against Ms. Stewart, which was the only claim relevant to what Defendants
describe as the “[n]ew issues . . . put before the Court by the Fourth Circuit.” ECF No. 92 at 4. To
the extent that Defendants’ discovery requests are relevant to any of the remaining claims,
Defendants have not demonstrated excusable neglect for their failure to seek this discovery during
the period provided under the scheduling order. See Fed. R. Civ. P. 6(b).
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another answer. See Fed. R. Civ. P. 15(a)(3). Defendants’ Motion to Compel (ECF No. 92) is

DENIED. Plaintiff’s Rule 60 Motion (ECF No. 90) and Motion to Extend Time (ECF No. 101)

are DENIED AS MOOT. Plaintiff’s Motion to Set Briefing Schedule (ECF No. 98) is

GRANTED.

       By May 1, 2026, the parties shall submit a joint proposed briefing schedule for Plaintiff’s

proposed motion for summary judgment.



Date: April 21, 2026                                       /s/
                                                    Timothy J. Sullivan
                                                    Chief United States Magistrate Judge




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