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Sloan v. Urban Title Services

February 12, 2010

ANDREA SLOAN, AS GUARDIAN AND CONSERVATOR ON BEHALF OF MARY JUERGENS, AN INCAPACITATED INDIVIDUAL, IN BOTH MARY JUERGENS' INDIVIDUAL CAPACITY AND AS THE SOLE MEMBER OF "1230 23RD STREET, LLC," PLAINTIFF/COUNTER-DEFENDANT,
v.
URBAN TITLE SERVICES, INC., ET AL., DEFENDANTS/COUNTER-PLAINTIFFS.



The opinion of the court was delivered by: Colleen Kollar-kotelly United States District Judge

MEMORANDUM OPINION

The above-captioned lawsuit was filed by the original Plaintiff in this matter, Mary Juergens,*fn1 nearly three years ago to challenge the legality of 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 initially named as Defendants in this action Urban Title Services, Inc. ("UTS") as well as Dale Duncan, First Mount Vernon Industrial Loan Association, Inc. ("FMVILA"), Arthur Bennett, and Brickshire Settlements, LLC ("Brickshire").*fn2 According to Plaintiff, the first of the two loans at issue in this case was extended by the Owen Living Trust with the assistance of UTS, while the second loan (hereinafter "FMV Loan") was extended by FMVILA with the assistance of Bennett, Duncan and Brickshire (collectively with FMVILA, the "FMV Defendants"). Plaintiff has since voluntarily dismissed with prejudice all of her claims against UTS. See Stip. of Dismissal, Docket No. [243]. Accordingly, the only claims that remain at issue in this lawsuit relate to the second of these two loans, the FMV Loan.

Plaintiff and the FMV Defendants have filed a series of cross-motions for partial summary judgment. The Court previously ruled on several of the parties' cross-motions - specifically, those motions for partial summary judgment filed by Plaintiff with respect to allegations in her Fourth Amended Complaint relating to the FMV Loan and those related cross-motions for partial summary judgment by the FMV Defendants. See Juergens v, UTS, 652 F. Supp. 2d 51 (D.D.C. 2009). Still outstanding, however, are Plaintiff's motion for partial summary judgment filed with respect to Defendant Duncan's counterclaims as well as several motions for partial summary judgment filed by Defendant Duncan and Defendant Brickshire with respect to certain allegations and claims asserted against them in Plaintiff's Fourth Amended Complaint. This Memorandum Opinion addresses Plaintiff's remaining motion for partial summary judgment as to Defendant Duncan's counterclaims as well as Duncan's motion for partial summary judgment, specifically: Plaintiff's [174] Motion for Summary Judgment on the Issue of Dale Duncan's Counterclaim and Defendant Duncan's [185/186] Motion for Summary Judgment Regarding Counts XVII-XXVI and XXX-XXXI and Claims for Punitive Damages.

Upon a searching review of the memoranda filed with respect to the pending motions, the exhibits thereto, the relevant case law and statutes, and the entire record herein, the Court orders as follows, for the reasons set forth below. First, Duncan's [185/186] Motion for Partial Summary Judgment is GRANTED-IN-PART, DENIED-IN-PART, and HELD IN ABEYANCE-IN-PART. Specifically, the motion is GRANTED insofar as Duncan argues that no attorney-client relationship existed between himself and Plaintiff, and it is also GRANTED with respect to Count XVII (Breach of Contract) of Plaintiff's Fourth Amended Complaint. It is denied, however, with respect to Counts XXV (Fraud), XXVI (Civil Conspiracy), XXXI (CPPA), and XXXII (CCSOA) of Plaintiff's Fourth Amended Complaint. Finally, the motion is HELD IN ABEYANCE insofar as Duncan urges that he is entitled to summary judgment on the underlying claims and/or Plaintiff's punitive damages requests set forth in Counts XVIII (Legal Malpractice), XIX (Breach of Fiduciary Duty), XX (Negligence), XXI (Breach of Contract), XXII (Breach of Fiduciary Duty), and XXIII (Negligence), pending further briefing by the parties.

Second, Plaintiff's [174] Motion for Summary Judgment on the Issue of Duncan's Counterclaim is GRANTED-IN-PART and HELD IN ABEYANCE-IN-PART. Specifically, Plaintiff's motion is GRANTED with respect to Count Two of Duncan's Counterclaim but is HELD IN ABEYANCE with respect to Count One, pending further briefing by the parties.

I. BACKGROUND

A. Factual Background

The Court assumes familiarity with the factual background of this case, which is set forth in detail in this Court previous' opinions, see Juergens v. UTS, 652 F. Supp. 2d 51 (D.D.C. 2009); Juergens v. UTS, 246 F.R.D. 4 (D.D.C. 2007); Juergens v, UTS, 533 F. Supp. 2d 64 (D.D.C. 2008); Juergens v, UTS, 652 F. Supp. 2d 40 (D.D.C. 2009); Juergens v, UTS, 652 F. Supp. 2d 51 (D.D.C. 2009), and the Court therefore addresses herein only such facts as are necessary for resolution of the motions currently before the Court.

Before doing so, however, the Court pauses briefly to comment upon the parties' attempts to incorporate by reference various factual statements set forth in separately-filed submissions. The Court reminds both parties that "[LCvR 7(h)(1)] places the burden on the parties and their counsel, who are most familiar with the litigation and the record, to crystallize for the district court the material facts and relevant portions of the record." Jackson v. Finnegan, Henderson, Farabow, Garrett & Dunner, 101 F.3d 145, 151 (D.C. Cir. 1996) (citing Twist v. Meese, 854 F.2d 1421, 1425 (D.C. Cir. 1988). The parties' attempts to broadly incorporate a multitude of unspecified facts set forth in separate filings directly contradicts both the spirit and the text of LCvR 7(h)(1), as it impermissibly shifts counsel's burden to locate and identify the relevant facts and leaves the Court to guess which of the many factual statements set forth in the separate pleadings are purportedly of relevance to the instant motions. As the Court has repeatedly advised the parties, it strictly adheres to the text of Local Civil Rule 7(h)(1) when resolving motions for summary judgment. See, e.g., 1/30/09 Scheduling and Procedures Order, Docket No. [155] at 2. Accordingly, the Court shall disregard the parties' efforts to incorporate factual statements by reference. The Court advises the parties once again that it is their obligation, and not this Court's, to locate and cite to the appropriate portions of the record that support their arguments on summary judgment. In order to ensure clarity of argument, the parties may not incorporate by reference factual statements made in other pleadings, but each motion must independently contain all facts that the party believes are relevant to resolution of the issues raised in that particular motion.*fn3

For this same reason, the Court also disregards Plaintiff's consolidated statement of material facts, which purports to relate to all summary judgment motions and cross-motions filed by the parties and which was filed in addition to the individual statements and response statements she provided in her briefing now before the Court. See Pl.'s [199] Stmt. of Mat. Facts. Plaintiff did not seek prior leave of the Court to file her consolidated factual statement and, as the Court has previously observed, the document was filed in violation of both this Court's orders and the local rules of this Court. See Juergens v. UTS, 652 F. Supp. 2d 51, 55-56 (D.D.C. 2009). Moreover, the consolidated statement, which appears to have been intended principally as a means of supplementing Plaintiff's own cross-motions for summary judgment, does not directly respond to Duncan's statement of material facts not in issue filed with his motion for partial summary judgment and is therefore of no help to the Court in identifying what, if any, material facts are purportedly in dispute with respect to that motion. Accordingly, the Court shall - once again - disregard Plaintiff's consolidated [199] Statement of Material Facts and any factual assertions set forth therein in ruling on the pending cross-motions, as well as the Defendants' [223] Joint Response. Cf. Juergens v. UTS, 652 F. Supp. 2d 51, 55-56 (D.D.C. 2009). As a consequence, the Court is left with only the individual statements of material fact and response statements of genuine issues in dispute that were filed with the parties' briefing. Given that these statements are narrowly tailored to each individual motion, the Court at this point provides only a short introduction to the facts of this case, with a more detailed discussion to follow below as is necessary for evaluation of a particular claim.

The heart of Plaintiff's lawsuit against the FMV Defendants, including Duncan, is her allegation that the FMV Loan was intended to be, or should properly be construed as, a personal mortgage loan - not a commercial loan. As the parties appear to agree, the relevant documents relating to the FMV Loan, when taken at face value, purport to characterize the loan as a $250,000 commercial loan extended by FMVILA to 1220 23rd Street, LLC (hereinafter, "LLC"), a limited liability corporation of which Plaintiff is the sole shareholder. Plaintiff nonetheless contends that the loan is, or should properly be construed as, a personal residential loan, based upon two alternative theories: (1) Plaintiff claims that the FMV Defendants offered her a personal mortgage loan, not a commercial loan, and that she signed only documents related to a residential loan; thus, although the FMV Loan documents on their face purportedly describe the FMV Loan as commercial in nature, such documents were fraudulently obtained by forgery, such that the entire transaction is fraudulent, Pl.'s Fourth Am. Compl. ¶¶ 89-91; (2) alternatively, Plaintiff alleges that, even assuming she did in fact sign the relevant loan documents purporting to describe the FMV Loan as commercial in nature, the loan is nonetheless unlawful as it is an illegal consumer residential loan impermissibly disguised as a commercial loan in order to avoid fair lending laws and disclosure requirements, id. ¶ 92.

Not unsurprisingly, the FMV Defendants deny Plaintiff's allegations and assert that the FMV Loan is a valid commercial loan extended to Plaintiff's LLC. See id. ¶¶ 94-96. The Defendants contend that they assisted Plaintiff, at her request, in establishing the LLC; title to the Condo was then transferred from Plaintiff to the LLC, and FMVILA extended a lawful commercial loan for $250,000 to the LLC, which was secured by the Condo. See id. ¶ 96.

As presented by the parties, then, the key question underlying this case is whether the FMV Loan is a legitimate commercial loan lawfully extended to the LLC or whether it is an unlawful loan - either because the underlying documents were fraudulently forged by the FMV Defendants or because it was unlawfully disguised by the FMV Defendants as a commercial loan in order to avoid fair lending laws and disclosure requirements. As the Court has previously observed, this ultimate question appears unlikely to be suitable for resolution on summary judgment based on the record before the Court at this time. See Juergens v. UTS, 652 F. Supp. 2d 51, 58 (D.D.C. 2009). At present, the Court is presented with two very different stories regarding the formation of the LLC and the issuance of the FMV Loan. Nonetheless, to the extent the parties' arguments in the instant motions do not depend upon or turn on this key factual dispute, summary judgment on such discrete issues may be appropriate.

B. Procedural Background

Plaintiff filed her Fourth Amended Complaint in the above-captioned civil action on October 7, 2008. See Fourth Am. Compl., Docket No. [120]. Plaintiff sets forth 25 causes of action against the FMV Defendants in this matter stemming from the issuance of the FMV Loan. See generally id. The FMV Defendants have each filed an Answer in response and, as is relevant to the instant Memorandum Opinion, Defendant Duncan filed a Counterclaim against Plaintiff for fraud, fraud in the inducement, misrepresentation, and negligent misrepresentation (Count I) and abuse of process or malicious prosecution (Count II). See generally Duncan's Ans. & Counterclaim, Docket No. [119].

Discovery in this case is now closed, and the parties have each filed a series of motions for partial summary judgment. The Court previously issued a Memorandum Opinion ruling on those motions for partial summary judgment that were filed by Plaintiff with respect to allegations in her Fourth Amended Complaint relating to the FMV Loan and those related cross-motions for partial summary judgment by the FMV Defendants. See Juergens v. UTS, 652 F. Supp. 2d 51 (D.D.C. 2009). As indicated above, the instant Memorandum Opinion addresses Plaintiff's [174] Motion for Summary Judgment on the Issue of Dale Duncan's Counterclaim and Defendant Duncan's [185/186] Motion for Summary Judgment Regarding Counts XVII-XXVI and XXX-XXXI and Claims for Punitive Damages.

Finally, the Court notes that after the parties' cross-motions for summary judgment had been fully briefed, Plaintiff advised the Court that she had executed a special warranty deed selling the Condo at issue in this litigation to a third-party purchaser, and that Defendant FMVILA had agreed to release its lien on the Condo in exchange for receiving $319,229.18 in compensation from the sale proceeds. See [242] Status Report.

II. LEGAL STANDARD

Pursuant to Federal Rule of Civil Procedure 56, a party is entitled to summary judgment "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); see also Tao v. Freeh, 27 F.3d 635, 638 (D.C. Cir. 1994). Under the summary judgment standard, the moving party bears the "initial responsibility of informing the district court of the basis for [its] motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits which [it] believe[s] demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). In response, the non-moving party must "go beyond the pleadings and by [its] own affidavits, or depositions, answers to interrogatories, and admissions on file, 'designate' specific facts showing that there is a genuine issue for trial." Id. at 324 (internal citations omitted).

Although a court should draw all inferences from the supporting records submitted by the nonmoving party, the mere existence of a factual dispute, by itself, is insufficient to bar summary judgment. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). To be material, the factual assertion must be capable of affecting the substantive outcome of the litigation; to be genuine, the issue must be supported by sufficient admissible evidence that a reasonable trier-of-fact could find for the nonmoving party. Laningham v. U.S. Navy, 813 F.2d 1236, 1242-43 (D.C. Cir. 1987); Liberty Lobby, 477 U.S. at 251 (the court must determine "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law"). "If the evidence is merely colorable, or is not sufficiently probative, summary judgment may be granted." Liberty Lobby, 477 U.S. at 249-50 (internal citations omitted). "Mere allegations or denials in the adverse party's pleadings are insufficient to defeat an otherwise proper motion for summary judgment." Williams v. Callaghan, 938 F. Supp. 46, 49 (D.D.C. 1996). The adverse party must do more than simply "show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Instead, while the movant bears the initial responsibility of identifying those portions of the record that demonstrate the absence of a genuine issue of material fact, the burden shifts to the non-movant to "come forward with 'specific facts showing that there is a genuine issue for trial.'" Id. at 587 (citing Fed. R. Civ. P. 56(e)) (emphasis in original).

III. DISCUSSION

A. Defendant Duncan's Motion for Partial Summary Regarding Counts XVII-XXVI and XXX-XXXI, and Claims for Punitive Damages

The Court turns first to consider Defendant Duncan's [185/186] Motion for Summary Judgment.*fn4 Duncan has moved for summary judgment with respect to the following claims and/or allegations asserted against him in Plaintiff's Fourth Amended Complaint:

* Counts XVII (Breach of Contract), XVIII (Legal Malpractice), XIX (Breach of Fiduciary Duty), and XX (Negligence), which are each based upon the same factual allegations relating to the establishment of the LLC;

* Counts XXII (Breach of Fiduciary Duty)*fn5 and XXIII (Negligence), which are each based upon Duncan's alleged conduct with respect to the FMV Loan closing;

* Count XXV (Fraud), which alleges that Duncan prepared false documents with respect to the FMV Loan in an effort to fraudulently disguise the transaction as a commercial loan rather than a personal consumer residential loan;

* Count XXVI (Civil Conspiracy), which alleges that Duncan conspired with Defendant Bennet to fraudulently disguise the FMV Loan as a commercial loan rather than a personal consumer residential loan;

* Count XXXI (Violation of D.C. Consumer Protection Procedures Act), which principally alleges that Duncan misrepresented and/or omitted a material fact by fraudulently disguising the FMV Loan as a commercial loan rather than a personal consumer residential loan and by providing a false, incomplete and deceptive HUD-1;

* Count XXXII (Violation of D.C. Consumer Credit Service Organization Act), which alleges that Duncan made and used false and misleading representations, failed to disclose material facts, and directly or indirectly engaged in acts to defraud or deceive Plaintiff by fraudulently disguising the FMV Loan as a commercial loan rather than a personal consumer residential loan; and

* Plaintiff's request for punitive damages as set forth in Counts XVII (Breach of Contract), XVIII (Legal Malpractice), XIX (Breach of Fiduciary Duty), XX (Negligence), XXI (Breach of Contract), XXII (Breach of Fiduciary Duty),and XXIII (Negligence).

Duncan's motion therefore focuses principally on Plaintiff's claims with respect to his alleged role in the formation of the LLC and the issuance of the FMV Loan. Given the existence of a material dispute over the correct nature of the FMV Loan, Duncan is entitled to summary judgment only to the extent his arguments do not turn on this key dispute.

At the outset, the Court notes that its resolution of Duncan's motion for partial summary judgment is significantly hindered by the generally deficient quality of the parties' briefing. As is discussed in more detail below, the parties' briefing is often at cross-purposes and unresponsive to the arguments advanced by the other side's papers. In addition, the parties have provided only a bare outline of the facts relevant to Duncan's motion and his role in forming the LLC and extending the FMV Loan. The specific details regarding Duncan's exact conduct in those ...


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