                              UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT


                              No. 11-2274


EUN O. KIM; AMY HSIANG−CHI TONG; CHIN KIM; DANIEL I. KIM;
GOOM Y. PARK; GYEASOOK KIM; KAP J. CHUNG; HONG S. CHUNG;
LENA KIM; MI YOUNG KIM; MYONG HO NAM; YOUN HWAN KIM; YOUNG
JOO KANG; ALAN YOUNG CHENG; SHUI QUI ZHANG; EVA YIHUA TU;
HELENA LEE; KI N. LEE; SUN H. LEE; KWANG BAG LEE; KWANG JON
KIM; NAM DOLL HUH,

                Plaintiffs - Appellants,

          v.

PARCEL K− TUDOR HALL FARM LLC,

                Defendant - Appellee,

          and

DOUGLAS A. NYCE; NYCE AND CO., INC.,

                Defendants.



                              No. 11-2298


EUN O. KIM; AMY HSIANG−CHI TONG; CHIN KIM; DANIEL I. KIM;
GOOM Y. PARK; GYEASOOK KIM; KAP J. CHUNG; HONG S. CHUNG;
LENA KIM; MI YOUNG KIM; MYONG HO NAM; YOUN HWAN KIM; YOUNG
JOO KANG; ALAN YOUNG CHENG; SHUI QUI ZHANG; EVA YIHUA TU;
HELENA LEE; KI N. LEE; SUN H. LEE; KWANG BAG LEE; KWANG JON
KIM; NAM DOLL HUH,

                Plaintiffs - Appellees,

          v.
PARCEL K− TUDOR HALL FARM LLC,

                 Defendant - Appellant,

           and

DOUGLAS A. NYCE; NYCE AND CO., INC.,

                 Defendants.



Appeals from the United States District Court for the District
of Maryland, at Greenbelt.   Alexander Williams, Jr., District
Judge. (8:09-cv-01572-AW)


Argued:   October 25, 2012                Decided:   December 17, 2012


Before KING and FLOYD, Circuit Judges, and R. Bryan HARWELL,
United States District Judge for the District of South Carolina,
sitting by designation.


Affirmed in part, vacated in part, and remanded by unpublished
per curiam opinion.


ARGUED:    James     P.    Koch,    Baltimore,   Maryland,    for
Appellants/Cross-Appellees.    Stephen Ari Metz, SHULMAN, ROGERS,
GANDAL,   PORDY    &    ECKER,   PA,   Potomac,   Maryland,   for
Appellee/Cross-Appellant.    ON BRIEF: Morton A. Faller, SHULMAN,
ROGERS, GANDAL, PORDY & ECKER, PA, Potomac, Maryland, for
Appellee/Cross-Appellant.


Unpublished opinions are not binding precedent in this circuit.




                                  2
PER CURIAM:

     In 2004, Sunchase Capital Partners XI, LLC, purchased 141

acres of real property from Tudor Hall Farm, Inc.                                   This property

included    a    parcel       known       as    Parcel      K,     to    which       Appellee      and

Cross-Appellant            Parcel    K–Tudor         Hall    Farm,       LLC,       (PK-THF)       took

title.      To       raise    funding          for    the    purchase,          Sunchase          asked

individuals—including               Eun    O.        Kim    and    the        other       twenty-one

appellants and cross-appellees (collectively “the Investors”)—to

invest     in        the    project.             Sunchase          ultimately             filed    for

bankruptcy.          Under its Chapter 11 plan, Sunchase sold all of the

Tudor    Hall    Farm       property      except       Parcel       K,    and       the    Investors

received nothing.

     The Investors brought a cause of action against PK-THF,

seeking    to    impose       a   constructive             trust    on    Parcel       K    because,

according       to    the    Investors,          PK-THF       came       to    own    it     due     to

Sunchase’s fraudulent behavior.                       The district court granted the

Investors’        motion          for     summary           judgment          and     imposed        a

constructive trust in the amount of $50,640.                                  The Investors now

appeal, challenging the method the district court used to value

the constructive trust, and PK-THF cross-appeals the district

court’s decision to impose the trust.                         For the reasons set forth

in the district court’s opinion, we affirm the district court’s

imposition       of    a    constructive         trust       and     its      adoption       of    the

“proportionality approach” to value the trust.                                 See Kim v. Nyce,

                                                 3
807 F. Supp. 2d 442 (D. Md. 2011).                          However, because we find

that     the     district      court       erred    in      its       application         of     the

proportionality         approach,       we     vacate       in       part    and    remand       for

further proceedings.

                                              I.

                                              A.

       In   April      2004,    Sunchase       signed       an       Agreement      of    Sale    to

purchase property from Tudor Hall Farm, Inc., for $15 million.

The    Agreement       concerned       141    acres    of    real       property         known    as

Parcels A, B, C, E, F, G, H, I, J, and K.                                    Pursuant to the

Agreement, PK-THF obtained title to Parcel K, which consisted of

7.88 acres, and Sunchase took title to the remaining parcels.

Both Sunchase and Tudor Hall Farm possessed initial membership

stakes      in    PK-THF,       with     Sunchase         taking        an       eighty-percent

membership interest and Tudor Hall Farm taking the remaining

twenty-percent         stake.        Nyce     &    Co.,     Inc.—a          company      owned    by

Douglas A. Nyce—was a Class B member of Sunchase and had the

sole authority to make all decisions with respect to Sunchase’s

management and operations.

       To      raise    the    $15     million        necessary             to   purchase        the

property,        Sunchase      offered       100   Class         A    membership         units    in

Sunchase for $150,000 each.                  The Investors purchased these Class

A   units.        Pursuant     to    the     Confidential            Summary       of    Offering,

which described the investment plan, the “Minimum Offering” was

                                               4
fifty Class A units or $7.5 million.                         The Confidential Summary

also specified that, if Sunchase did not raise $15 million by

selling 100 Class A units—the “Maximum Offering”—and could not

obtain alternate funding, it would not purchase the property.

As part of their transaction with Sunchase, each investor signed

a Subscription Agreement that required Sunchase to terminate the

offer and return each investor’s payment “if subscription[s] for

at    least    50     Units    [were]       not       received     and      accepted    by    the

Company on or prior to April 29, 2005.”                                Each investor also

signed an Operating Agreement, which obligated Nyce to “act at

all    times    in     a    fiduciary      manner       toward     the      Company    and    the

Members.”

       Sunchase closed on the Tudor Hall Farm property on May 2,

2005, despite its failure to raise the $15 million required in

the Confidential Summary.                 As of the closing date, Sunchase had

made    $3.125        million       by    selling        Class     A     membership     units.

Sunchase sold an additional $3.972 million in Class A membership

units over the next three months, bringing its total to $7.097

million, $3.120 million of which came from the Investors.                                    This

total fell $403,000 short of the Minimum Offering and $7.903

million       short    of     the    Maximum          Offering.        In    light     of     this

shortfall, Sunchase negotiated a modification of the Agreement

of    Sale,    which       allowed       Sunchase       to   pay   Tudor      Hall     Farm    in

installments          under    the       terms    of     a   Purchase        Money     Note    in

                                                  5
exchange for a $500,000 increase in the purchase price of the

property.      A first deed of trust on the property secured the

Purchase Money Note.

     When Sunchase experienced difficulties making payments on

the Purchase Money Note, Nyce asked William D. Pleasants to make

a $5.25 million investment in Sunchase.                           Via the 2003 Trust of

the Descendants of William D. Pleasants, Jr. (Pleasants Trust),

Pleasants     made       a       $5.315       million    investment         in       Sunchase     in

exchange      for    a       Class       A     membership        interest,           leaving    the

Investors      with          a    twenty-five-percent              Class         A     membership

interest. 1    The Pleasants Trust created Tudor Hall Funding, Inc.,

to oversee the investment, and Tudor Hall Funding ultimately

purchased      the    Purchase            Money       Note      from    Tudor         Hall     Farm.

Sunchase    eventually            defaulted,          causing    Tudor      Hall      Funding     to

initiate    foreclosure               proceedings       against    the      Tudor      Hall     Farm

property.       Parcel            K     was    not     included        in   the       foreclosure

proceedings.

     On     September            10,     2007,       Sunchase      filed     a        Chapter    11

bankruptcy petition in the United States Bankruptcy Court for


     1
       We arrive at this figure by adding the Investors’ $3.12
million contribution, the non-litigant Class A investors’ $3.977
million   contribution,  and   the   Pleasants  Trust’s   $5.315
investment, creating a sum of $12.412 million.    The Investors’
$3.12 million contribution is approximately twenty-five percent
of $12.412 million.



                                                  6
the   District   of    Maryland.    Sunchase      and    Tudor   Hall   Funding

proposed a Chapter 11 plan that required Sunchase to sell the

property to Tudor Hall Funding free of any liens, claims, and

encumbrances to satisfy Sunchase’s obligation under the Purchase

Money Note.      The sale did not affect Parcel K, which PK-THF

continued to own.        Under the plan, Sunchase’s Class A members—

including the Investors—received nothing, their equity interests

were eliminated, and they were prohibited from bringing certain

claims against Tudor Hall Funding.          The plan allowed Sunchase to

assign its eighty-percent membership interest in PK-THF to Tudor

Hall Funding.         In a separate transaction, Tudor Hall Funding

acquired Tudor Hall Farm’s twenty-percent interest in PK-THF,

making   Tudor   Hall    Funding   the    sole   owner    of   all   membership

interests in PK-THF.        On March 13, 2009, the bankruptcy court

confirmed the proposed plan.



                                     B.

      The Investors allege that Nyce created a constructive trust

in Parcel K when he used fraudulent methods to sell Sunchase’s

Class A membership units and purchase the property.                     Although

PK-THF obtained title to Parcel K, the Investors contend that

their funding is traceable to the purchase of that property,

giving them an equitable claim to Parcel K.              On October 1, 2009,

the district court entered default judgments against Nyce and

                                     7
Nyce       &   Co.    in    the    amount   of        $3.12    million,   which    left     the

Investors’ constructive trust cause of action against PK-THF as

their only remaining claim.

       The      district          court    granted       the     Investors’    motion       for

summary judgment on the constructive trust issue on September 2,

2011, holding in relevant part that (1) Sunchase had used the

Investors’ funds to purchase Parcel K, (2) Nyce had obtained

those      funds      through      fraud    or    other       improper    conduct,    (3)    it

would be unjust for PK-THF to retain the benefit of this fraud,

and (4) Sunchase’s Chapter 11 plan did not enjoin the Investors’

claims.              To    determine      the     appropriate       valuation        for    the

constructive trust, the district court invited both parties to

submit memoranda regarding which portion of the Investors’ $3.12

million contribution Sunchase used to purchase Parcel K.

       On      November      2,    2011,    the       district    court    found   that     the

Investors were entitled to a constructive trust on Parcel K in

the amount of $50,640. 2                   The Investors argued that the court



       2
        The district court referred to this amount as the
“constructive trust lien.”    The Investors suggest that this
terminology is “internally inconsistent” because a party cannot
have the “unlimited ownership interest” that a constructive
trust provides and have a lien valued at less than that amount.
The district court was presumably determining the value of the
constructive trust, which at least one other court has allowed.
See generally Pike v. Commodore Motel Corp., Civ. A No. 940,
1989 WL 57026 (Del. Ch. May 25, 1989).           To mirror the
terminology that other courts have employed, we refer to the


                                                  8
should take a “commingled funds approach” and impose a trust

equivalent in value to the Investors’ total investment:                            $3.12

million.        Instead, the district court arrived at the $50,640

figure by adopting PK-THF’s proposed “proportionality approach.”

Because the Investors contributed $3.12 million—or approximately

twenty percent of the total purchase price for the Tudor Hall

Farm property—the district court found that the trust should

equal twenty percent of the purchase price of Parcel K.                                The

court    acknowledged      that    the   parties     had    not        introduced      any

“direct proof as to what dollar amount of the acquisition went

toward Parcel K” and decided to use the consideration recited in

the   deed—$253,200—as       the   purchase     price      when    calculating         the

trust’s value.        See Kim, 807 F. Supp. 2d at 455, 457.                            This

amount     stems   from   Maryland’s     tax    assessment        of    Parcel     K   and

contradicts the value included in the Operating Agreement, which

sets Parcel K’s value at $1 million “for all purposes.”

      In    this   appeal,    the    Investors       challenge          the   district

court’s decision to employ a proportionality approach, and PK-

THF cross-appeals the court’s finding that a constructive trust

was appropriate.          We affirm the district court’s decision to

impose      a    constructive      trust       and   its     adoption         of       the



“value” or “amount” of the trust rather than a “constructive
trust lien.”



                                         9
proportionality        approach    to     calculate    the     trust’s     value.

However, we vacate in part the district court’s grant of summary

judgment and remand for further consideration of (1) whether

$253,200   is   the      appropriate       purchase    price    to   use     when

calculating the trust’s value and (2) whether the trust should

equal twenty percent of the purchase price of Parcel K.



                                         II.

     Having had the benefit of oral argument and after carefully

reviewing the briefs, record, and controlling legal authorities,

we agree with the district court’s analysis with respect to its

decision that the facts of this case warrant the imposition of a

constructive trust.       See Kim, 807 F. Supp. 2d at 448-49, 451-52.

Specifically,     we    agree     that    (1)   the   Investors’     funds    are

traceable to Parcel K, (2) Nyce and Nyce & Co. obtained those

funds through fraud, (3) it would be unjust for PK-THF to retain

the benefit of this wrongful conduct, and (4) Sunchase’s Chapter

11 plan does not enjoin the Investors’ claims.                 Accordingly, we

affirm the district court’s decision to impose a constructive

trust on the reasoning of the district court.




                                         10
                                        III.

                                         A.

       We also agree that the district court correctly adopted PK-

THF’s     proposed    “proportionality         approach”     rather   than       the

Investors’ suggested “commingled funds approach.”                  See Kim, 807

F. Supp. 2d at 456-58.          We therefore affirm the district court’s

decision to use the proportionality approach on the reasoning of

the district court.           However, as discussed below, we find that

the     district     court      erred    in     its     application        of    the

proportionality approach.



                                        B.

       Summary     judgment    is   appropriate       only   if   “there    is    no

genuine dispute as to any material fact.”                     Fed. R. Civ. P.

56(a).     Under this standard, “[o]nly disputes over facts that

might affect the outcome of the suit under the governing law

will properly preclude the entry of summary judgment.”                     Anderson

v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).                          A court

considering a summary judgment motion must view the facts in the

light most favorable to the non-moving party.                 United States v.

Diebold, Inc., 369 U.S. 654, 655 (1962) (per curiam).                       Because

this     case    concerns     cross-motions     for    summary    judgment,       we

consider “each motion . . . individually, and [view] the facts

relevant to each . . . in the light most favorable to the non-

                                         11
movant.”    Mellen v. Bunting, 327 F.3d 355, 363 (4th Cir. 2003).

We review de novo both the district court’s decision to grant

the Investors’ motion for summary judgment and its conclusions

of law.     Moore Bros. Co. v. Brown & Root, Inc., 207 F.3d 717,

724 (4th Cir. 2000); Shaw v. Stroud, 13 F.3d 791, 798 (4th Cir.

1994).

    The     Investors    claim     that     the   district    court    erred   in

determining the value of Parcel K, which resulted in the court

incorrectly computing the amount of the constructive trust.                    The

Investors make two arguments regarding why the district court

erred when it set Parcel K’s value at $253,200.                       First, the

Investors    contend     that    the   district    court     should    not   have

decided this issue on summary judgment.               Although the district

court concluded without discussion that the value recited in the

Parcel K deed—$253,200—constituted the “best evidence” of Parcel

K’s purchase price, the record contains additional evidence of

Parcel K’s value that the district court did not acknowledge:

the $1 million figure that appears in the Operating Agreement.

The Investors contend that the existence of two estimates of

Parcel K’s value created a genuine dispute of material fact, so

the district court should not have resolved the issue on summary

judgment.    We agree.

    Second, the Investors argue that the district court erred

when it used the value recited in the Parcel K deed as the

                                       12
purchase     price      because    this     figure      was    drawn    directly   from

Maryland’s tax assessment of Parcel K.                      In E.L. Gardner, Inc. v.

Bowie Joint Venture, the Maryland Court of Appeals explained

that “generally, in and of itself, assessed valuation is not

admissible       as    evidence    of   valuation       for    purposes    other   than

taxation.”       494 A.2d 988, 991 (Md. 1985) (quoting C.C. Marvel,

Annotation,      Valuation      for     Taxation       Purposes   as    Admissible   to

Show   Value     for    Other     Purposes,      39    A.L.R.2d   209,    § 2   (1955))

(internal quotation marks omitted).                     The primary rationale for

this rule is that the tax assessment value typically does not

mirror     the   fair    market     value     of      the   property.      Marvel,   39

A.L.R.2d at § 2.          The district court did not consider the deed

value’s connection to the Maryland tax assessment figure in its

opinion.

       In their brief, the Investors illustrate the applicability

of the rationale behind not using tax assessment values in non-

tax contexts in this case.              The Investors explain that using the

tax assessment as the purchase price yields a price per acre of

$32,132 3 for Parcel K, which is drastically different from the




       3
       The Investors calculated the price per acre to be $32,106
because they rounded the deed price to $253,000.      Our figure
differs because we did not round the deed price.



                                            13
$108,924 per acre 4 that Sunchase paid for the other Tudor Hall

Farm parcels.           By contrast, using the Operating Agreement’s $1

million figure as the purchase price produces a price per acre

of   $126,904,        which      is    more    consistent          with    the    price    that

Sunchase actually paid for the other parcels.                              The rule against

using     tax    assessments          for   non-tax         purposes      and    this    case’s

alignment        with      the        rationale          behind     that        rule     further

illustrates        that    the      district        court    may    have    erred       when    it

assumed that the Parcel K deed was the “best evidence” of the

property’s       value.        Because        the    dispute       regarding      Parcel       K’s

value     will    affect      the     outcome       of    this    lawsuit       and    therefore

qualifies        as   an   issue      of    material        fact,    the    district      court

should not have resolved the matter on summary judgment.



                                               C.

      In addition to contending that the district court erred in

determining Parcel K’s value on summary judgment, the Investors

also argue that the district court erred in calculating which


      4
       We arrived at this amount by subtracting the Parcel K
value recited in the Operating Agreement ($1 million) from the
total purchase price ($15.5 million) to determine the purchase
price of the other parcels. We then divided this figure ($14.5
million) by the acreage of the other parcels (133.12 acres).
Using the $253,200 value recited in the deed as Parcel K’s
purchase price yields a price per acre of $114,534, which is an
even starker contrast.



                                               14
percentage of Parcel K’s worth to allocate to the constructive

trust.      The district court decided to value the constructive

trust at twenty percent of Parcel K’s purchase price because the

Investors’ $3.12 million investment represented twenty percent

of    the   $15.5    million   purchase      price     of     the   Tudor       Hall   Farm

property.      Kim, 807 F. Supp. 2d at 457.              However, the Investors’

contribution        also   represented       a     twenty-five-percent           Class    A

membership interest in Sunchase, and Class A membership sales

financed Sunchase’s purchase of the Tudor Hall Farm property.

This    discrepancy—which      the    district        court    failed      to    address—

creates a genuine dispute of material fact regarding whether the

Investors contributed twenty or twenty-five percent of Parcel

K’s    purchase     price.     The    district        court    therefore        erred    in

resolving this issue on summary judgment.



                                         IV.

       For the foregoing reasons, we affirm in part, vacate in

part, and remand for further proceedings consistent with this

opinion.       On remand, the district court should determine Parcel

K’s    value    and    consider      what        percentage    of    the    Investors’

contribution financed the purchase of Parcel K.                       It should then

adjust the value of the constructive trust accordingly.

                                                                    AFFIRMED IN PART,
                                                                     VACATED IN PART,
                                                                         AND REMANDED

                                            15
