The opinion of the court was delivered by: Colleen Kollar-kotelly United States District Judge
Plaintiff has brought this thirty-two count action against seven individual and corporate Defendants, asserting various claims based on two disparate loans extended to Plaintiff, each of which was secured by a condominium located at 1230 23rd Street, N.W., Apartment 505, Washington, D.C. 20037 (the "Condo"). Plaintiff alleges that the first loan was extended by Urban Title Services, Inc. ("UTS"), and that Defendants William Kenney ("Kenney"), Robert William Carney ("Carney"), and Paul Erb ("Erb") (collectively, with UTS, the "UTS Defendants"), each played a role in the extension of the UTS Loan. Plaintiff alleges that the second loan was extended by a combination of Defendants First Mount Vernon Industrial Loan Association, Inc. ("FMVILA"), First Mount Vernon Mortgage, L.L.C. ("FMVLLC") and Dale Duncan ("Duncan") (collectively the "FMV Defendants").
Currently pending before the Court are two motions to dismiss, the first brought by FMVILA, and the second brought jointly by FMVLLC and Duncan.*fn1 In passing, each of the FMV Defendants' motions to dismiss additionally moves to sever Plaintiff's claims against the UTS Defendants from her claims against the FMV Defendants. Also pending before the Court is Plaintiff's Motion for Partial Summary Judgment, in which she asks that the Court grant partial summary judgment on the issue of whether Plaintiff transferred legal ownership to the Condo to a limited liability corporation via a properly executed and acknowledged deed in accordance with District of Columbia law. Upon a searching review of the motions and legal memoranda filed by Plaintiff and the FMV Defendants, the exhibits thereto, the relevant case law and statutes, and the entire record herein, the Court shall deny without prejudice Plaintiff's motion for partial summary judgment, and shall further deny without prejudice the motions to sever brought by the FMV Defendants.
Furthermore, the Court concludes that the motions to dismiss brought by the FMV Defendants have been converted to motions for summary judgment by virtue of the numerous documents outside the pleadings attached thereto, and therefore must be addressed pursuant to Federal Rule of Civil Procedure 56. In her Opposition to the FMV Defendants' motions, Plaintiff has raised a number of allegations that, if substantiated by factual support, might preclude summary judgment in favor of Defendants. However, as these allegations are largely absent from Plaintiff's Amended Complaint, the Court shall deny without prejudice the motions to dismiss brought the FMV Defendants, and shall grant Plaintiff leave to amend her Complaint in order to clarify the grounds on which she alleges that she is entitled to relief. If Plaintiff determines to amend her complaint, she shall do so on or before June 15, 2007; and all Defendants shall respond to Plaintiff's amended complaint on or before July 5, 2007.
Plaintiff, Mary Juergens, alleges that she resided in and owned a condominium unit located at 1230 23rd Street, N.W., Apartment 505, Washington, D.C. 20037 (the "Condo"), and that, prior to October 2003, she owned the Condo free and clear of any encumbrances or liens, other than a condominium fee assessment of approximately $8000. Am. Compl. ¶¶ 13, 21. However, in October 2003, she required a loan of $60,000 to pay off her condominium fee assessment and to perform renovations on the Condo. Id. ¶ 14. Thus, according to Plaintiff, she spoke with Defendant Kenney, who presented himself as an agent of Defendant UTS, about securing a loan, and Defendants Kenney and UTS agreed to act as lender on a loan to be funded by the "George Owen Trust" and secured by a deed of trust on the Condo (the "UTS Loan"). Id. ¶¶ 15-16, 20. According to Plaintiff, the proceeds of the UTS Loan were to be used to pay Plaintiff's $8000 condominium fee assessment in full and Plaintiff was to receive approximately $52,000 in cash, less reasonable settlement costs, at closing. Id. ¶ 22. Under the terms of the UTS Loan, Plaintiff was responsible for paying off the UTS Loan within one year of the date of the closing, and was also responsible for paying UTS interest at a rate of 10% per annum. Id. ¶ 23. Plaintiff alleges, on information and belief, that the George Owen Trust did provide $60,000 to Defendants Kenney and UTS in order to fund the UTS Loan; however, Plaintiff asserts that she never received full use of the proceeds of the UTS Loan or received an accounting of the distributions of the UTS Loan. Id. ¶¶ 17-19.
The UTS Loan allegedly closed at the UTS office on October 20, 2003, with Defendant Carney acting as settlement attorney and Defendant Erb acting as Notary Public. Id. ¶¶ 24-25, 28. Plaintiff asserts that she was not physically present at the closing of the UTS Loan and therefore did not sign any papers before a Notary Public at the closing of the UTS Loan. Id. ¶¶ 26-27. After the closing, the condo fee assessment was paid off, and Plaintiff received an escrow check in the amount of approximately $24,597.06. Id. ¶ 29. Plaintiff asserts that she never received an accounting for the other $27,402.84 of the UTS Loan. Id. ¶ 33. According to Plaintiff, Defendants UTS, Kenney, and Carney have claimed that they used the proceeds of the UTS Loan to pay off tax liens on the Condo, including an IRS lien of approximately $7,500 and a Fairfax County lien of approximately $1,700. Id. ¶ 34. However, Plaintiff asserts that she never gave the UTS Defendants permission to pay off any tax liens on the Condo, and further asserts that the IRS and Fairfax County records do not reflect such a payoff, but rather show that the liens were discharged as time-barred. Id. ¶¶ 35-37. In addition, with respect to the UTS Loan, Plaintiff alleges that she never received a variety of procedural documents required by various District of Columbia statutes. Id. ¶¶ 38-41.
Plaintiff next alleges that, in August 2005, she went to Defendant Duncan and "the First Mount Vernon Defendants" in order to obtain a loan on the Condo, that would be used to pay off the UTS Loan. Id. ¶ 44.*fn2 According to Plaintiff's Amended Complaint, FMVILA and FMVLLC -- acting through Defendant Duncan -- indicated that they would not extend a loan as small as $60,000, and instead encouraged Plaintiff to take out a loan of $250,000 (hereinafter the "FMV Loan"). Id. ¶ 46. Plaintiff alleges that Defendant Duncan told her that in order to obtain the FMV Loan, she needed to establish a limited liability corporation, known as "1230 23rd Street, LLC" (hereinafter the "LLC"), move out of the Condo, transfer title to the LLC, and then have the LLC rent out the Condo to a third party. Id. ¶ 47. According to Plaintiff, the FMV Loan proceeds would be used to pay off the UTS loan (plus accrued interest), and Plaintiff would receive approximately $190,000 in cash at closing, less reasonable settlement costs. Id. ¶¶ 52, 181.*fn3
Plaintiff asserts that she never indicated that she wanted to establish the LLC or have the LLC take title to the Condo. Id. ¶ 48. Nevertheless, Plaintiff alleges, Defendant Duncan registered the LLC with the Virginia State Corporation Commission on Plaintiff's behalf, listing Plaintiff as the registered agent for the LLC despite her ineligibility to serve as a registered agent under Virginia law, and listing the LLC's address as the address of FMVILA and FMVLLC. Id. ¶¶ 49-51. Plaintiff further alleges that Defendant Duncan prepared the documents needed to close the FMV Loan, including a "Deed in Lieu of Foreclosure," which he and the First Mount Vernon Defendants "forced" Plaintiff to sign. Id. ¶¶ 53-54. According to Plaintiff, however, the same day that she signed the Deed in Lieu of Foreclosure, she called Defendant Duncan and informed him that she did not want to proceed with the FMV Loan. Id. ¶ 55.
Plaintiff alleges that she never received an accounting of the proceeds of the FMV Loan, and that she only received approximately $95,000 of those proceeds. Id. ¶¶ 56-57. Plaintiff alleges, upon information and belief, that the FMV Defendants paid off at least part of the UTS Loan, but that the "actual amount" of the UTS Loan paid off was less than $60,000 plus accrued interest. Id. ¶¶ 59-60. As with the UTS Loan, Plaintiff alleges that she never received a variety of procedural documents required by various District of Columbia statutes in connection with the FMV Loan. Id. ¶¶ 60-64.
Based on these allegations, Plaintiff's Amended Complaint includes thirty-two (32) separate counts -- nineteen (19) of which relate to the UTS Loan and fourteen (14) of which relate to the FMV Loan. With respect to the UTS Loan, Plaintiff asserts the following claims: Breach of Contract (Count I); Conversion (Count II); Fraud (Count III); Breach of Fiduciary Duty (Counts IV and VI); Negligence (Count V and VII); Civil Conspiracy (Count VIII); Violation of the District of Columbia Loan Shark Act, D.C. Code § 26-901, et seq. (Count IX); Violation of the District of Columbia Mortgage Lender and Broker Act, D.C. Code § 26-1101, et seq. (Count X); Violation of the District of Columbia Mortgage Loan Protection Act, D.C. Code § 26-1151.01, et seq. (Count XI); Violation of the District of Columbia Unlawful Trade Practice Act, D.C. Code § 28-3904 (Count XII); Violation of the District of Columbia Consumer Credit Service Organization Act, D.C. Code § 28-4601, et seq. (Count XIII); Respondeat Superior (Counts XIV-XVI); a claim entitled "Set Aside Deeds and Deed of Trust, Quiet Title and Declaratory Relief" (Count XVII); Injunctive Relief (Count XVIII); and a Demand for an Accounting (Count XIX).*fn4
All of Plaintiff's claims against the FMV Defendants are brought against all three Defendants -- FMVILA, FMVLLC, and Defendant Duncan. In Count XX, Plaintiff alleges Breach of Contract, specifically that the FMV Defendants agreed to provide the FMV Loan in order for Plaintiff to pay off the UTS Loan and for Plaintiff to take the remainder of the FMV Loan proceeds as cash, but that the FMV Defendants paid off only some of the UTS Loan and provided Plaintiff with only $95,000 in cash. In Count XXI, Plaintiff alleges that the FMV Defendants' refusal to provide Plaintiff with the full proceeds of the FMV Loan constituted Conversion. In Count XXII, Plaintiff alleges Fraud, claiming that the FMV Defendants made numerous false representations to Plaintiff, including that she would receive $190,000, less reasonable settlement costs, in cash at the closing of the FMV Loan, and further claiming that the FMV Defendants knowingly directed Plaintiff to falsely state that she would move out of the Condo and rent it to a third party, and to falsely state that she lived or worked in the Commonwealth of Virginia. Count XXIII alleges Civil Conspiracy, based on Plaintiff's allegations of Fraud.
Plaintiff asserts the same statutory claims against the FMV Defendants as she does against the UTS Defendants: Violation of the District of Columbia Loan Shark Act, D.C. Code § 26-901, et seq. (Count XXIV); Violation of the District of Columbia Mortgage Lender and Broker Act, D.C. Code § 26-1101, et seq. (Count XXV); Violation of the District of Columbia Mortgage Loan Protection Act, D.C. Code § 26-1151.01, et seq. (Count XXVI); Violation of the District of Columbia Unlawful Trade Practice Act, D.C. Code § 28-3904 (Count XXVII); and Violation of the District of Columbia Consumer Credit Service Organization Act, D.C. Code § 28-4601, et seq. (Count XXVIII). In addition, in Count XXIX, Plaintiff includes a claim for Respondeat Superior, asserting that FMVILA and FMVLLC are responsible for Defendant Duncan's allegedly tortious behavior. Furthermore, in Count XXX, Plaintiff requests that the Court declare the loan documents associated with the FMV Loan void ab initio, declare that the Condo is free and clear of any mortgage or other encumbrance, and quiet title to the Condo in Plaintiff's name. In Count XXXI, Plaintiff asks the Court to enter an Order enjoining the FMV Defendants and anyone who received any legal or equitable interest in the Condo from the FMV Defendants from further encumbering the Condo or instituting any foreclosure or eviction proceedings with respect to the Condo. Finally, in Count XXXII, Plaintiff demands an accounting of all funds disbursed or received with regard to the FMV Loan.
On November 7, 2006, FMVILA filed a Motion to Dismiss Plaintiff's Amended Complaint, and Defendants FMVLLC and Duncan also filed a joint Motion to Dismiss. In its motion, FMVILA argues that Plaintiff's claims are contradicted by the documents executed in connection with the FMV Loan. Specifically, FMVILA argues that Plaintiff is precluded from seeking relief under the various District of Columbia statutes pursuant to which she brings claims because the FMV Loan is a commercial, rather than residential, loan, and further argues that the loan documents demonstrate that Plaintiff's other claims fail as a matter of law. See generally FMVILA Mot. to Dismiss. In their motion, FMVLLC and Defendant Duncan incorporate by reference the FMVILA Motion to Dismiss, see FMVLLC Mot. to Dismiss at 3, and further argue that Plaintiff's claims against FMVLLC and Defendant Duncan fail as a matter of law because neither was a party to the FMV Loan transaction. See generally FMVLLC Mot. to Dismiss.
Plaintiff responded to the FMV Defendants' motions to dismiss in two ways. First, on November 17, 2006, Plaintiff filed a Motion for Partial Summary Judgment, requesting that the Court grant summary judgment on the issue of whether Plaintiff transferred legal ownership to the Condo via a properly executed and acknowledged deed in accordance with District of Columbia law. See generally Pl.'s Mot. for PSJ. Plaintiff also filed an Opposition to the FMV Defendants' motions to dismiss on November 20, 2006, in which she argues that the FMV Defendants' inclusion of the various loan documents as exhibits to their motions to dismiss converts those motions into motions for summary judgment. See generally Pl.'s Opp'n. Plaintiff further argues that she has sufficiently alleged the various claims included in her Amended Complaint. Id. On November 28, 2006, Defendants FMVILA and FMVLLC/Duncan filed each filed an Opposition to Plaintiff's Motion for Partial Summary Judgment, as well as a Reply in support of their own motion to dismiss. Plaintiff filed her Reply in support of her Motion for Partial Summary Judgment on December 1, 2006.
In evaluating a Rule 12(b)(6) motion to dismiss for failure to state a claim, the court must construe the complaint in a light most favorable to the plaintiff and must accept as true all reasonable factual inferences drawn from well-pleaded factual allegations. In re United Mine Workers of Am. Employee Benefit Plans Litig., 854 F. Supp. 914, 915 (D.D.C. 1994); see also Schuler v. United States, 617 F.2d 605, 608 (D.C. Cir. 1979) ("The complaint must be 'liberally construed in favor of the plaintiff,' who must be granted the benefit of all inferences that can be derived from the facts alleged."). While the court must construe the Complaint in the Plaintiff's favor, it "need not accept inferences drawn by the plaintiff if such inferences are unsupported by the facts set out in the complaint." Kowal ...