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COOPER v. FIRST GOVERNMENT MORTGAGE AND INVESTORS CORP.
July 9, 2002
BETTY COOPER ET AL., PLAINTIFFS,
FIRST GOVERNMENT MORTGAGE AND INVESTORS CORPORATION ET AL., DEFENDANTS.
The opinion of the court was delivered by: Ricardo M. Urbina, United States District Judge.
DENYING DEFENDANT SOODAK'S MOTION TO DISMISS
This case involves plaintiffs suing various mortgage brokers,
assignees, and settlement agents alleging predatory and fraudulent
lending tactics in violation of the District of Columbia Consumer
Protection Procedures Act ("CPPA"), D.C. Code § 28-3901 et seq., the
District of Columbia Mortgage Lender and Broker Act ("MLBA"), D.C. Code
§ 26-1101 et seq. (formerly § 26-1001), the Federal Truth in
Lending Act ("TILA"), 15 U.S.C. § 1601 et seq., and the corollary
D.C. statute, D.C. Code § 28-3301. This lending fraud matter is
before the court on defendant Darren Soodak's motion to dismiss for
failure to state a claim on which relief can be granted pursuant to
Federal Rule of Civil Procedure 12(b)(6). Mr. Soodak argues that the
CPPA cannot apply to him in his individual capacity. For the reasons
that follow, the court denies the motion to dismiss because the
plaintiffs have properly stated a claim against Mr. Soodak.
The plaintiffs bring this suit alleging that defendants Darren Soodak,
Equitable Mortgage Group, and First Government Mortgage and Investors
Corporation violated the CPPA, MLBA, and TILA. Compl. ¶¶ 6,
112-44(k). Specifically, the plaintiffs claim that Mr. Soodak: (1)
charged excessive fees and other costs and imposed onerous and unfair
terms; (2) misrepresented benefits, interest rates, monthly payments,
closing costs, and terms of the mortgage loans; (3) provided conflicting
copies of loan documents; and (4) failed to disclose all required
information. Id. ¶¶ 113-44(k). The complaint further alleges that Mr.
Soodak directly violated the CPPA when he brokered mortgage loans "with
[the] knowledge that there was no reasonable probability that the
plaintiffs would be able to repay the loans." Id. ¶ 112(a). The
plaintiffs also plead that Mr. Soodak "[t]ook advantage of plaintiffs'
inability to protect their own interest by reason of their age,
infirmities, illiteracy, inability to understand the language of the
agreement and lack of sophistication." Id. ¶ 113(b). Mr. Soodak moves
the court to dismiss the plaintiffs' complaint pursuant to Rule
A. Legal Standard For Motion To Dismiss
For a complaint to survive a Rule 12(b)(6) motion to dismiss, it need
only provide a short and plain statement of the claim and the grounds on
which it rests. FED. R. CIV. P. 8(a)(2); Conley v. Gibson, 355 U.S. 41,
47 (1957). A motion to dismiss under Rule 12(b)(6) tests whether the
plaintiff has properly stated a claim, not whether the plaintiff will
prevail on the merits. FED. R. CIV. P. 12(b)(6); Scheuer v. Rhodes,
416 U.S. 232,
236 (1974). The plaintiffs need not plead the elements of
a prima-facie case in the complaint. Sparrow v. United Air Lines, Inc.,
216 F.3d 1111, 1114 (D.C. Cir. 2000); see also Swierkiewicz v. Sorema
N.A., 122 S.Ct. 992, 999 (2002) (holding that a plaintiff in an
employment-discrimination case need not establish her prima-facie case in
the complaint). Thus, the court may dismiss a complaint for failure to
state a claim only if it is clear that no relief could be granted under
any set of facts that could be proved consistent with the allegations.
Hishon v. King & Spalding, 467 U.S. 69, 73 (1984); Atchinson v. District
of Columbia, 73 F.3d 418, 422 (D.C. Cir. 1996). In deciding such a
motion, the court must accept all the complaint's well-pled factual
allegations as true and draw all reasonable inferences in the nonmovant's
favor. Scheuer, 416 U.S. at 236.
The CPPA provides consumers with a private cause of action against
merchants who make or enforce unconsionable leases or sales provisions.
D.C. Code §§ 28-3901, 23-3904(r); Slaby v. Fairbridge, 3 F. Supp.2d 22,
27 (D.D.C. 1998). The CPPA defines its terms comprehensively so that it
can provide a remedy for all improper trade practices. DeBerry v. First
Gov't Mortgage and Investors Corp., 743 A.2d 699, 700 (D.C. 1999).
Specifically, the CPPA prohibits any person from making or enforcing
provisions of contracts for sales or leases which would "mislead,
deceive, or damage" consumers. D.C. Code §§ 23-3904, 23-3904(r).
The term "person," as defined by the CPPA, encompasses "individual[s],
firm[s], corporation[s], partnership[s], cooperative[s], association[s],
. . . [and] any other organization, legal entity or group of individuals
however organized. . . ." D.C. Code § 23-3901(a)(1). This general
definition has been further limited to only include persons involved in
"consumer-merchant relationships." Howard v. Riggs Nat'l Bank,
432 A.2d 701, 709 (D.C. 1981). Accordingly, a person who supplies
consumer goods or services may be held liable under the CPPA. Id.
C. The Court Denies Defendant Soodak's Motion To Dismiss
The defendant argues that the plaintiffs have not pled facts sufficient
to establish a connection between the wrongful acts the plaintiffs allege
in the complaint and the specific personal conduct of Mr. Soodak. Def.'s
Mot. to Dismiss at 3. The court disagrees. First, to resolve Mr.
Soodak's motion to dismiss for failure to state a claim on which relief
could be granted, the court limits itself to the relevant law and the
facts alleged in the complaint. Second, based on the clear language set
forth in the CPPA, Mr. Soodak may be personally liable. D.C. Code §
1. The Court Does Not Consider Defendant Soodak's
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