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Baker v. Gurfein

October 13, 2010


The opinion of the court was delivered by: Reggie B. Walton United States District Judge


Marla Baker, the plaintiff in this civil case, seeks, inter alia, compensatory and punitive damages from defendant Tobin, O'Connor and Ewing (the "Law Firm"), alleging that through one of its principals, Stephen O'Connor, it aided and abetted defendant Kathryn Gurfein in the wrongful conversion of certain family jewelry, and that it fraudulently misrepresented the location of this jewelry.*fn1 Complaint (the "Compl.") ¶¶ 19-33, 39-46. Currently before the Court is the Law Firm's motion to dismiss both claims brought against it under Federal Rule of Civil Procedure 12(b)(6). Defendant Tobin, O'Connor & Ewing's Motion to Dismiss at 1. After carefully considering the Law Firm's motion and accompanying memorandum of law (the "Def.'s Mem."), the plaintiff's memorandum in opposition to the Law Firm's motion to dismiss (the "Pl.'s Mem."), and all documents and exhibits attached thereto, the Court concludes for the following reasons that the motion to dismiss must be granted in part and denied in part.

I. Background

The following facts are alleged in the complaint and assumed to be true for the purposes of resolving the Law Firm's motion to dismiss. See infra p. 4-5. Baker and defendant Gurfein are sisters. Compl. ¶ 10. Following their mother's death in 1995, their father "stated that he was gifting" to the sisters jointly "jewelry (and other personal property)" that belonged to their mother. Id. ¶¶ 10-11. Consistent with their mother's specifications, their father "not[ed] that the jewelry was to be divided equally in value between them." Id. ¶ 11. "Neither sister," however, "was prepared to divide the... jewelry at that time," so their father "agreed" to maintain possession of the jewelry "until such time as they could reach a mutual agreement with respect to the disposition of such property." Id. ¶ 12. On November 3, 1997, their father died before the sisters could agree on an appropriate disposition of the jewelry. Id. ¶ 14. The sisters then placed the jewelry in a "dual safe deposit box" at First Union National Bank, Wachovia's predecessor, id. ¶ 15, which the sisters agreed in writing could only be accessed with the signature of both sisters, id. ¶¶ 16-17.

After years of litigation regarding the distribution of their father's estate, the sisters turned their attention to "the unresolved issue related to the disposition of the jewelry." Id. ¶¶ 18-19. In May 2008, the sisters entered into an "[e]scrow [a]greement" which contemplated that they would meet, inventory the jewelry, and then deliver them to an escrow agent, who would retain the jewelry until provided "written instructions by both [sisters]." Id. ¶¶ 19-21. The sisters agreed to meet on May 28, 2008, or, alternatively, June 18, 2008, "to make an inventory... of the contents [of the safe deposit box] and to deliver such contents to the escrow agent pending [their] distribution." Id. ¶ 22 (internal quotation marks omitted). Gurfein subsequently "refused to meet with [Baker] on" those dates and "the contents [of the safe deposit box] consisting of the subject jewelry[] were never transferred to the escrow agent." Id. ¶ 23 (internal quotation marks omitted).

O'Connor engaged in negotiations on behalf of Gurfein to determine how the "jewelry and family heirlooms could be distributed or liquidated." Id. ¶ 40. On August 22, 2008, id. ¶ 24, while the parties were "in the midst of these... negotiations," id. ¶ 41, Gurfein and O'Connor went to the Wachovia location where the jewelry was located, id. ¶ 24, and made "false and deceptive statements regarding [the plaintiff's] lack of interest in the jewelry and her rights of access or possession," convincing Wachovia to permit Gurfein unilateral access the jewelry, id. ¶ 25. Gurfein then took possession of the jewelry and left the bank, id. ¶ 25, thereby depriving the plaintiff of her rights in the property, id. ¶ 26, and violating the agreement by the sisters that neither could unilaterally access the jewelry, id. ¶¶ 34-38.

Following Gurfein's acquisition of the jewelry, O'Connor advised Baker's attorney on August 25, 2008, that "[t]he items ha[d] been placed in a safe deposit box at Wachovia for safe keeping." Id. ¶ 42. However, O'Connor, as well as defendants Gurfein and the Law Firm, knew that these representations were false and that "the jewelry had not been placed in another safe deposit box at Wachovia but instead" remained in the possession of Gurfein "for her own use and benefit." Id. ¶ 43 (emphasis omitted). Gurfein has retained possession of the jewelry and "refuses to restore the property to joint control, notwithstanding [a] demand [for the jewelry] having been made upon her" by Baker. Id. ¶ 27.

Baker then filed the complaint in this case on August 6, 2009, alleging that Gurfein wrongfully converted possession of the jewelry, id. ¶ 26 and that she committed fraud in doing so, id. ¶ 43. Furthermore, Baker asserts that O'Connor "aided and abetted" Gurfein's wrongful conversion of the jewelry, id. ¶ 30, that O'Connor knowingly and fraudulently represented that the jewelry remained in a safe deposit box in order "to induce [the p]laintiff's reliance... and to lull [the plaintiff] into a false sense of security with respect to safe keeping, security and location of the subject jewelry," id. ¶ 44, and that the Law Firm "ratified and approved" O'Connor's actions, id. ¶ 30-31. Because of O'Connor's purported actions, Baker alleges that she "relied upon the... fraudulent misrepresentation to her detriment and failed to take immediate action to protect her interests with respect to the jewelry, the whereabouts of which are presently unknown." Id. ¶ 46.

II. Standard of Review

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests whether a complaint has properly stated a claim upon which relief may be granted. Woodruff v. DiMario, 197 F.R.D. 191, 193 (D.D.C. 2000) (Urbina, J.). For a complaint to survive a Rule 12(b)(6) motion, Federal Rule of Civil Procedure 8(a) requires that it contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Although Rule 8(a) does not require "detailed factual allegations," a plaintiff is required to provide "more than an unadorned, the-defendant-unlawfully-harmed-me accusation," Ashcroft v. Iqbal, ___ U.S. ___, ___, 129 S.Ct. 1937, 1949 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-57 (2007)), in order to "'give the defendant fair notice of what the... claim is and the grounds upon which it rests,'" Twombly, 550 U.S. at 555 (quoting Conley v. Gibson, 355 U.S. 41, 77 (1957)). In other words, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Iqbal, ___ U.S. at ___, 129 S.Ct. at 1949 (quoting Twombly, 550 U.S. at 570). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw [a] reasonable inference that the defendant is liable for the misconduct alleged." Id. (quoting Twombly, 550 U.S. at 556). A complaint alleging facts which are "'merely consistent with a defendant's liability... stops short of the line between possibility and plausibility of 'entitlement to relief.'" Id. (quoting Twombly 550 U.S. at 557) (internal quotation marks omitted).

In evaluating a Rule 12(b)(6) motion under this framework, "[t]he 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," Schuler v. United States, 617 F.2d 605, 608 (D.C. Cir. 1979) (internal quotation marks and citations omitted), and the Court "may consider only the facts alleged in the complaint, any documents either attached to or incorporated in the complaint[,] and matters of which [the Court] may take judicial notice," E.E.O.C. v. St. Francis Xavier Parochial Sch., 117 F.3d 621, 624 (D.C. Cir. 1997) (footnote omitted). Although the Court must accept the plaintiff's factual allegations as true, any conclusory allegations are not entitled to an assumption of truth, and even those allegations pled with factual support need only be accepted to the extent that "they plausibly give rise to an entitlement to relief." Iqbal, ___ U.S. at ___, 129 S.Ct. at 1950. If "the [C]court finds that the plaintiffs have failed to allege all the material elements of their cause of action," then the Court may dismiss the complaint without prejudice, Taylor v. FDIC, 132 F.3d 753, 761 (D.C. Cir. 1997), or with prejudice, provided that the Court "determines that the allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency," Firestone v. Firestone, 76 F.3d 1205, 1209 (D.C. Cir. 1996) (internal quotation marks and citations omitted).

Additionally, because here the plaintiff is seeking recovery for an allegedly fraudulent misrepresentation, she must meet the heightened pleading standards required under Federal Rule of Civil Procedure 9(b). Rule 9(b) requires a plaintiff to "state with particularity the circumstances constituting fraud or mistake." Rule 9(b) is not an antithesis of Rule 8(a)'s "short and plain statement" requirement, but rather a supplement to it. U.S. ex rel. Williams v. Martin-Baker Aircraft Co., 389 F.3d 1251, 1256 (D.C. Cir. 2004). To survive a motion to dismiss a fraud claim, therefore, the plaintiff must state the "time, place[,] and content of the false misrepresentations, the fact misrepresented and what was retained or given up as a consequence of the fraud." Acosta Orellana v. CorpLife Intern, ___ F. Supp. 2d ___, ___, 2010 WL 1931689, at *9 (D.D.C. May 13, 2010) (Walton, J.) (quotation marks deleted); see also Stevens v. InPhonic, Inc., 662 F. Supp. 2d 105, 114 (D.D.C. 2009) (Walton, J.) ("The complaint must... provide a defendant with notice of the who, what, when, where, and how with respect to the circumstances of the fraud in order to meet this enhanced pleading standard." (internal quotation marks omitted)).

III. Legal Analysis

The Law Firm presents several arguments in support of its motion to dismiss. First, the Law Firm asserts that Baker has failed to plead a valid conversion claim because she "does not allege that [the Law Firm] ever possessed the jewels that she seeks to recover," and that in any event, the Law Firm "has no liability to third parties for advice it provides [to] its own client." Defs.' Mem. at 1. As for the fraudulent misrepresentation claim, the Law Firm asserts that this claim fails because Baker has not demonstrated that the purported misrepresentation was material, or that there was "any reasonable reliance or damages resulting therefrom." Id. at 2. In considering the arguments raised by the defendants, the Court is mindful of the fact that this matter falls under its "diversity jurisdiction," 28 U.S.C. § 1332 (2006), and thus under the doctrine established in Erie Railroad Co. v. Tompkins, 304 U.S. 64, 78 (1938), the Court must "look to [District of Columbia] law for rules of decision with respect to substantive matters," Davis v. Grant Park Nursing Home, L.P., 639 F. Supp. 2d 60, 64 (D.D.C. 2009) (Friedman, J.); see also Williams v. U.S. Elevator Corp., 920 F.2d 1019, 1022 (D.C. Cir. 1990) ("Although the Rules of Decision Act... do not strictly apply with respect to [District of Columbia] law, we apply [the District's] substantive law analogously for reasons of uniformity and respect for the [District of Colmbia] Court of Appeals" (internal quotation marks and citation omitted)). Furthermore, where "there is no District law on point, [the Court] should look ...

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