Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Griffith v. Barnes

June 11, 2008

LESLIE GRIFFITH, PLAINTIFF,
v.
PAUL BARNES, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Henry H. Kennedy, Jr. United States District Judge

MEMORANDUM

In this action, Plaintiff Leslie Griffith ("Griffith") asserts that Paul Barnes ("Barnes"), IREIS, L.L.C. ("IREIS"), and Michael J. Brown ("Brown") (collectively "Defendants") engaged in a predatory loan scheme whereby they fraudulently took title to Griffith's house and re-sold it without her knowledge. On June 13, 2007, Griffith's claims against Brown were dismissed pursuant to a settlement. On February 28, 2008, this court entered a default against Barnes and IREIS.*fn1 See Fed. R. Civ. P. 55(a) (authorizing entry of defaults). As a result of the entry of default, all of the well-pleaded allegations in Griffith's complaint are deemed admitted by Barnes and IREIS. Adkins v. Teseo, 180 F. Supp. 2d 15, 17 (D.D.C. 2001). Griffith now seeks entry of default judgment pursuant toFed. R. Civ. P. 55(b). The court held a hearing on damages on April 15, 2008, during which the court heard expert testimony with respect to the calculation of damages.*fn2 Based upon the evidence presented at that hearing and the well-pleaded allegations of the complaint, the court makes the following:

I. FINDINGS OF FACT

1. Griffith is an adult citizen of the District of Columbia who, upon commencement of this action, resided in a single family home that she inherited from her mother in 2001. Griffith's house (the "Residence") is located at 2619 Newton Street, N.E., Washington, D.C. 20018.

2. Barnes is an adult citizen of the state of Maryland. He resides at 12512 Woodsong Lane, Bowie, Maryland 20721. Barnes was the Resident Agent of IREIS, in the state of Maryland prior to the company's dissolution.

3. IREIS is a limited liability company that was formed under the laws of the state of Maryland. IREIS' principal place of business was located at 12512 Woodsong Lane, Bowie, Maryland 20721. According to its Articles of Organization, IREIS was a company formed, in part, to "buy, rehabilitate, own, and manage real estate property; to hold, acquire, invest, mortgage, lease and convey real and personal property in any part of the world, so far as necessary or expedient in conducting the business of the company; to engage in any and all business related to the real estate business." The company was voluntarily dissolved by Barnes on July 27, 2007.

4. At all relevant times, Barnes was the organizer and agent of IREIS and exercised dominion and control over IREIS. Barnes and IREIS held themselves out as professionals and persons or entities willing to assist individuals facing foreclosure to maintain ownership of their homes.

5. In March 2004, Griffith took out a mortgage on the Residence for $95,000 and paid off an earlier mortgage on the Residence. By September 2004, Griffith had fallen behind in her mortgage payment.

6. In September 2004, Kelly Profit, a friend of Griffith's, told Griffith that Barnes could help Griffith keep the Residence and offered to put Griffith in contact with Barnes. Griffith spoke to Barnes by telephone in September 2004.

7. During the telephone call, Barnes pressured Griffith to meet with him immediately, saying that it was imperative because the bank could foreclose at any time and that Barnes would not be able to help her after the bank started foreclosure proceedings. Griffith met Barnes at the Residence on September 20, 2004.

8. During the September 20, 2004, meeting Barnes told Griffith that she was a credit risk because she was unemployed, but that he and his company wanted to help her out.

9. Barnes offered Griffith a loan that he said was standard for his business. The terms of the loan were as follows: (1) Barnes and/or IREIS would pay off Griffith's $95,000 mortgage and in return give Griffith $25,000; (2) Griffith would pay Barnes and/or IREIS $850/month for two years; (3) at any time during the two years, Griffith had the right to repurchase the Residence for $170,000; (4) at any time during the two years, Griffith had the right to accept a lump sum payment of $35,000 to terminate the contract and "sell" the Residence to Barnes and/or IREIS; and (5) Barnes and/or IREIS were responsible for the upkeep of the property, including utilities.

10. During the September 20, 2004, meeting, Barnes induced Griffith to sign a number of documents to obtain the loan. These documents included: (1) an agreement setting forth the terms of the loan agreement as described supra ("the Agreement"); (2) an "Agreement to Sell Real Estate"; and (3) an "Authorization to Release Information/Limited Power of Attorney."

11. The Agreement had an effective interest rate in excess of the maximum 24% per annum rate permitted by law in the District of Columbia. This fact was never disclosed to Griffith. Griffith received no disclosure documents related to the loan nor a copy of the appraiser's report subsequently obtained by Barnes.

12. Barnes explained to Griffith that the purpose of the "Agreement to Sell Real Estate" was to transfer title of the Residence to IREIS, which would hold it in trust for two years or until Griffith repurchased the Residence.

13. Barnes also told Griffith that the "Authorization to Release Information/Limited Power of Attorney" was necessary to make the loan and pay off the existing mortgage. When Griffith questioned whether the Limited Power of Attorney would be in effect until she repurchased the Residence in two years, Barnes stated that it would only be in effect until title of the Residence was transferred to IREIS to be held in trust and Griffith received the $25,000.

14. The Limited Power of Attorney form that Griffith signed on September 20, 2004, lacked basic formalities for such a document as required in the District of Columbia and incorrectly listed Griffith's home address. Accordingly, Barnes induced Griffith ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.