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CONSERVATIVE CLUB OF WASHINGTON v. FINKELSTEIN

May 18, 1990

CONSERVATIVE CLUB OF WASHINGTON, Plaintiff,
v.
NATHAN I. FINKELSTEIN, Defendant


Stanley Sporkin, United States District Judge.


The opinion of the court was delivered by: SPORKIN

STANLEY SPORKIN, UNITED STATES DISTRICT JUDGE.

 This matter is before the Court on defendant's motion to dismiss, or in the alternative for summary judgment, and upon plaintiff's cross-motion for summary judgment on its claim for slander of title. Defendant has also filed a motion for sanctions pursuant to Rule 11 of the Federal Rules of Civil Procedure. Plaintiff in its complaint asserts claims for negligence, tortious interference with contract, and slander of title. Plaintiff is seeking compensatory as well as punitive damages. This action is properly before the Court since it involves citizens of different states and the amount in controversy exceeds $ 50,000. 28 U.S.C. § 1332.

 I. STANDARD FOR MOTION TO DISMISS

 When presented with a motion to dismiss, a court must construe the complaint in the light most favorable to the plaintiff and its allegations must be taken as true. Moreover, any ambiguities or uncertainties concerning the sufficiency of the claims must be resolved in favor of the plaintiff. See Hughes v. Rowe, 449 U.S. 5, 10, 66 L. Ed. 2d 163, 101 S. Ct. 173 (1980); Scheuer v. Rhodes, 416 U.S. 232, 236, 40 L. Ed. 2d 90, 94 S. Ct. 1683 (1974); see also 5 Wright & Miller, Federal Practice and Procedure § 1357 (1969). As the Supreme Court has stated:

 
In appraising the sufficiency of the complaint we follow, of course, the accepted rule that a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.

 Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957). Thus, at this stage, plaintiff's statement of the facts must be accepted as true.

 Defendants' seek the dismissal of plaintiff's complaint. They assert that the various counts of plaintiff's complaint must be dismissed for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). *fn1" Given the relevant legal standard, this Court will treat plaintiff's factual allegations as true when evaluating defendant's substantive motion.

 II. FACTUAL BACKGROUND

 Plaintiff Conservative Club ("Club") is a non-profit corporation duly organized and operating pursuant to the laws of the District of Columbia. This action stems from a dispute which arose when the Club attempted to convey a portion of the property where its facility is located to Dunn Brady Associates, Architects ("Dunn Brady"). The agreed upon sales price was $ 1,200,000. The contract of sale was entered into on or about June 6, 1988.

 In order to completely understand the events which subsequently occurred, it is necessary to examine the history of the parcel which is the subject of this dispute. The Club originally obtained title to the subject property and the facilities constructed thereon in fee simple pursuant to a deed dated April 11, 1955. Pl. Opp. at 4 n. 1. The Club remained in exclusive control of the subject property until on or about December 1977. At that time, the Club deeded the subject property to an individual named Bruce H. MacLeod, Jr. (MacLeod), with the Club reserving the right to continue to occupy the subject property. On or about December 31, 1980, MacLeod formed the "1640 21st Street Condominium" which was and is comprised of two (2) condominium units. The property which is the subject of this dispute was originally included in the condominium plan. On December 22, 1986, Mr. MacLeod amended the condominium regime to withdraw the subject property. Pl.Ex. 9. On or about December 29, 1986, MacLeod conveyed one of the condominium units to Richard Stanton-Jones. Pl.Ex. 6. On or about April 13, 1987, the second condominium unit was conveyed to Kathy Jean Zebrowski.

 Finkelstein had follow-up conversations with Mr. Dunn. During these discussions, Finkelstein stated that there was a problem with the title to the subject property and that unless his clients received $ 100,000 a law suit would be instituted which could tie up the property for 2-3 years. As a result, Dunn Brady was unable to obtain title insurance.

 In response, the Club initiated a quiet title and slander of title action in the Superior Court for the District of Columbia naming Finkelstein's clients as the defendants. This action was filed on May 12, 1989. Def.Ex. 2. The case was eventually settled and the case dismissed. The terms of the settlement were as follows: 1) the Club was to pay a total sum of $ 40,000 to Finkelstein's clients, Stanton-Jones and Zebrowski; 2) said clients agreed to execute a resubdivision application and any other necessary documents to accomplish a resubdivision; and 3) Stanton-Jones and Zebrowski agreed not to interfere with Dunn Brady's construction and development plans as long as they were in conformity with the law. Def.Ex. 1. As a result of the filing of the quiet title and slander of title action and the ensuing negotiations, the Club's transfer of the property to Dunn Brady was delayed approximately 5 months. This delay had the effect of imposing certain costs upon the Club.

 III. PLAINTIFF'S LEGAL CLAIMS

 A. Count I -- Negligence

 Plaintiff seeks to recover from defendant Finkelstein for the damages that allegedly resulted from the delays associated with effecting the closing on the subject property. Plaintiff contends that defendant Finkelstein owed a duty to the Club to "determine the truth of the claims he made regarding the Club's title." Amended Complaint, paras. 25-26. Plaintiff further contends that defendant breached that duty by making false claims and threatening a law suit. Id.

 Plaintiff's legal arguments on this claim are patently untenable. It is hornbook law that in order to maintain a negligence action a plaintiff must satisfy four basic elements. Those elements are as follows:

 1) A duty, or obligation, recognized by law, requiring a person to conform to a certain standard of conduct, for the protection of others against unreasonable risks;

 2) The duty owed must have been breached;

 3) A reasonably close causal connection must exist between conduct and the resulting injury, ...


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