Nicholas Schmitz, a former employee of Verdad Asset Management, sued his former employer and its founder, Daniel Rasmussen, alleging he was owed a larger share of profits from an 'opportunity fund' and other ventures. Schmitz claimed that despite a 2017 written agreement and a 2018 addendum that did not mention the opportunity fund, oral discussions and a course of conduct created an implied agreement for a 10% profit share. He also asserted claims for promissory estoppel and unjust enrichment, arguing Rasmussen had promised him compensation and that Verdad retained benefits without paying value. The district court dismissed all claims with prejudice, finding that the written agreements controlled the compensation terms and that Schmitz failed to plead a clear and definite promise or sufficient facts to support his quasi-contractual theories.
The Fourth Circuit applied de novo review, examining whether Schmitz's allegations, viewed in the light most favorable to him, stated a plausible claim for relief. The court first addressed the breach of contract claim, noting that while Maryland law allows contracts to be modified by conduct, Schmitz's allegations did not show a course of conduct that contradicted the written agreement. The 2017 agreement contained an 'Entire Agreement' clause stating that any amendments must be in writing and signed by both parties. The court held that this clause expressly precluded the formation of an implied contract based on oral discussions or alleged conduct. Next, the court analyzed the promissory estoppel and unjust enrichment claims. Under Maryland law, these quasi-contractual theories are barred when an express contract exists that controls the subject matter. The 2017 agreement explicitly stated it constituted 'full compensation for all services provided,' which the court found controlled the subject of Schmitz's payment. Because the written contract defined the compensation, Schmitz could not recover under theories that sought to override the express terms. Finally, the court rejected Schmitz's argument that the district court erred in dismissing the complaint with prejudice, concluding that allowing further amendment would be futile given the fundamental deficiencies in his theory of liability.
The decision reinforces the strict enforcement of 'Entire Agreement' clauses in Maryland, making it difficult for parties to rely on oral promises or course of conduct to modify written compensation agreements. It clarifies that quasi-contractual claims are unavailable when an express contract covers the subject matter, even if the contract is silent on specific future ventures. The dismissal with prejudice means Schmitz cannot refile the same claims, and the ruling serves as a warning to employees and employers to memorialize all compensation terms in writing.