Appeal from the Superior Court of the District of Columbia (CA9282-01) (Hon. James E. Boasberg, Trial Judge)
Before Schwelb and Reid, Associate Judges, and Ferren, Senior Judge.
The opinion of the court was delivered by: Schwelb, Associate Judge
On March 4, 2003, the trial judge issued an order dismissing this action for failure to state a claim upon which relief can be granted. A copy of the judge's order is attached hereto and made a part hereof. The three plaintiffs appeal, reiterating the contentions that they raised in the trial court. With a single modification, we adopt the well-reasoned opinion of the trial judge as the opinion of this court. With respect *fn1 to the plaintiffs' first claim, i.e., that the defendant Student Loan Marketing Association (Sallie Mae) unlawfully failed to disclose material information about "the accrual and collection of late fees," as allegedly required by D.C. Code § 28-3904 (f) (2001), we *fn2 conclude, in the interests of justice, that the dismissal of this claim should be without prejudice and that the plaintiffs should be granted leave to file an amended complaint *fn3 alleging affirmative misrepresentation of material facts. In all other respects, we affirm.
In complaining of the alleged non-disclosure by Sallie Mae of material information regarding the accrual and collection of late charges, the plaintiffs relied on § 28-3904 (f). This provision makes it unlawful in commercial transactions for any person to "fail to state a material fact if such failure tends to mislead." Section 28-3904 (f) is obviously a disclosure statute, and for the reasons stated by the trial judge, the plaintiffs' claim pursuant to that provision is expressly preempted by 20 U.S.C. § 1099.
Another provision of the DCCPPA makes it unlawful to "misrepresent as to a material fact which has a tendency to mislead." D.C. Code § 28-3904 (e). On its face, this section addresses affirmative misrepresentations rather than non-disclosures. Although we do not decide the question, the argument that § 28-3904 (e) is not preempted by federal law is significantly stronger than the corresponding argument made by the plaintiffs in relation to § 28-3904 (f).
In their complaint, the plaintiffs do not rely on or cite § 28-3904 (e) at all.
Substantially all of their averments are phrased in terms of Sallie Mae's alleged failure to disclose material facts. However, in oral argument and, to a lesser extent, in their briefs, the plaintiffs alleged that Sallie Mae affirmatively misrepresented to the recipients of student loans the material fact that late fees were not being charged when in fact such fees were being charged.
There is no doubt that these allegations could have been included in the complaint. Nevertheless, "leave to amend is almost always allowed to cure deficiencies in pleading fraud." Firestone v. Firestone, 316 U.S. App. D.C. 152, 156; 76 F.3d 1205, 1209 (1996) (quoting Luce v. Edelstein, 802 F.2d 49, 56 (2d Cir. 1986)) (quoting 2A J. MOORE & J. LUCAS, MOORE'S FEDERAL PRACTICE § 9.03 at 9-34 (2d ed. 1986)) (internal quotation marks omitted). Our rules "manifest a preference for resolution of disputes on the merits." Keith v. Washington, 401 A.2d 468, 470 (D.C. 1979); Carter Obayuwana v. Howard Univ., 764 A.2d 779, 787 (D.C. 2001). Like the Federal Rules, our rules "reject the approach that pleading is a game of skill in which one misstep by counsel may be decisive to the outcome." Frain v. District of Columbia, 572 A.2d 447, 452 (D.C. 1990) (quoting Conley v. Gibson, 355 U.S. 41, 48 (1957)). Accordingly, we conclude that the plaintiffs should be granted leave to amend their claim that Sallie Mae failed to disclose information regarding the accrual and collection of late fees, and, if they can do so consistently with Super. Ct. Civ. R. 11, to plead fraud or misrepresentation with particularity.
For the foregoing reasons, the judgment of the trial court is affirmed, and the opinion of the trial court is adopted, except that plaintiffs shall be granted leave to amend the first claim in their complaint as specified herein. The case is remanded to the trial court for further proceedings consistent with this opinion.
SUPERIOR COURT OF THE DISTRICT OF COLUMBIA CIVIL DIVISION
JOHN WASHKOVIAK, et al. Plaintiffs, v. STUDENT LOAN MARKETING ASSOCIATION Defendant.