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Andrea Sloan, As Guardian and Conservator On Behalf of Mary Juergens v. Urban Title Services

March 21, 2011

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

Mary Juergens ("Juergens") commenced this action on August 29, 2006, challenging the legality of two loans extended to her, each of which was secured on a condominium located at 1230 23rd Street, N.W., Apartment 505, Washington, D.C. 20037 (the "Condo"). Subsequently, Juergens was found to be an "incapacitated individual" and Andrea Sloan ("Sloan"), who was appointed as Juergens' Guardian and Conservator, was substituted for Juergens as the plaintiff in this action.*fn1 Over the years, the claims and defendants in this action have been successively winnowed down by orders of this Court and by the agreement of the parties. Today, the defendants include Brickshire Settlements, LLC ("Brickshire"), First Mountain Vernon Industrial Loan Association, Inc. ("FMVILA"), Dale Duncan ("Duncan"), and Arthur G. Bennett (collectively, "Defendants"). Presently before the Court is Brickshire's [267] Supplemental Motion for Summary Judgment on Counts XXI, XXII, and XXIII ("Motion for Summary Judgment"), pursuant to which Brickshire argues that the law of the case doctrine warrants summary judgment in its favor on Plaintiff's claims for breach of contract, breach of fiduciary duty, and negligence (Counts XXI, XXII, and XXIII). Based upon the parties' submissions, the relevant authorities, and the record as a whole, the Court shall GRANT-IN-PART and DENY-IN-PART Brickshire's [267] Motion for Summary Judgment.

I. BACKGROUND

The Court assumes familiarity with its prior opinions in this action, which set forth in detail the history of this case, and shall therefore only address the factual and procedural background necessary to address the discrete issues currently before the Court.

The only loan that remains at issue in this action was extended by or with the assistance of Defendants (the "Loan"). The heart of Plaintiff's lawsuit is her allegation that the Loan was intended to be, or should be construed as, a personal residential loan-not a commercial loan. See Sloan v. Urban Title Servs., Inc., 689 F. Supp. 2d 123, 127 (D.D.C. 2010) (hereinafter, "Sloan I"). The relevant documents, taken at face value, characterize the Loan as a $250,000 commercial loan extended by FMVILA to 1220 23rd Street, LLC (the "LLC"), a limited liability company of which Plaintiff is the sole member. Id. at 127-28. Plaintiff nevertheless maintains that the Loan is, or should be construed as, a personal residential loan because (a) the documents relating to the Loan were fraudulently obtained by forgery and (b) the Loan is an illegal consumer residential loan disguised as a commercial loan in order to evade fair lending and disclosure requirements. See 4th Am. Compl., Docket No. [120], ¶¶ 89-92. Unsurprisingly, Defendants deny Plaintiff's allegations and assert that the Loan is a valid commercial loan extended to Plaintiff's LLC. See id. ¶¶ 94-96. By their account, Defendants assisted Plaintiff, at her request, in establishing the LLC, the title to the Condo was transferred from Plaintiff to the LLC, and FMVILA extended a lawful commercial loan for $250,000, secured by the Condo, to the LLC. See id. ¶ 96. Therefore, as presented by the parties, the central question underlying this lawsuit is whether the Loan is or is not a legitimate commercial loan lawfully extended to the LLC.

As is relevant to the instant motion, the operative version of Plaintiff's Complaint includes the following causes of action against Brickshire: Count XXI (Breach of Contract); Count XXII (Breach of Fiduciary Duty); Count XXIII (Negligence); and Count XXXI (CPPA*fn2 Violation). See 4th Am. Compl. ¶¶ 375-398, 482-497.*fn3 The first three of these claims-breach of contract, breach of fiduciary duty, and negligence-are premised on identical factual allegations and essentially state alternative theories of recovery for the same conduct. Id. ¶¶ 375-398. As described below, some of those factual allegations have already been addressed by the Court, and others are the subject of the instant motion.

On March 6, 2009, Brickshire moved for partial summary judgment in connection with each of the four above-described claims. See Def.'s Mots. for Partial Summ. J., Docket Nos. [177]-[178]. Plaintiff filed a timely opposition. See Pl.'s Opp'n to Def.'s Mots. for Partial Summ. J., Docket Nos. [197]-[198]. Brickshire filed a reply. See Def.'s Reply in Supp. of Mots. for Partial Summ. J., Docket Nos. [216]-[217].

On February 12, 2010, this Court issued a Memorandum Opinion and Order addressing a series of motions and cross-motions raised by the parties, including Brickshire's motion for partial summary judgment. See generally Sloan v. Urban Title Servs., Inc., 689 F. Supp. 2d 123 (D.D.C. 2010) (hereinafter, "Sloan II"). In that decision, the Court addressed a discrete factual component common to Plaintiff's claims for breach of contract, breach of fiduciary duty, and negligence (Counts XXI, XXII, and XXIII)-namely, Plaintiff's allegation that Brickshire "fail[ed] to promptly fil[e] loan documents and loan releases" with the Recorder of Deeds. 4th Am. Compl. ¶¶ 377, 384, 392. While certain documents admittedly were not filed in a timely manner, Plaintiff suffered no damages from the delay and therefore the Court found that Brickshire was entitled to summary judgment on Plaintiff's claims for breach of contract, breach of fiduciary duty, and negligence insofar as those claims were predicated on the allegation that Brickshire failed to promptly file loan documents and loan releases. See Sloan II, 689 F. Supp. 2d at 133-35. Accordingly, that allegation is no longer at issue.

As is particularly relevant to the instant motion, the Court's February 12, 2010 decision also addressed the merits of Plaintiff's CPPA claim against Brickshire (Count XXXI), a claim predicated on the twin allegations that Brickshire (a) "fraudulently disguis[ed] the loan to [] Juergens as a commercial loan rather than, what was in reality, a personal consumer residential loan," and (b) "provid[ed] [] Juergens with a false, incomplete and deceptive HUD-1*fn4 settlement statement." 4th Am. Compl. ¶¶ 487-88. The Court's decision in this regard focused on Brickshire's limited role in the underlying transaction, the extent of its knowledge, and the implications of these considerations for the viability of Plaintiff's CPPA claim.

While the motion was sharply disputed by the parties, there was little genuine disagreement about the underlying facts. The parties agreed that Brickshire had no role in the origination of the Loan or the creation of the LLC. See Sloan II, 689 F. Supp. 2d at 136. With the exception of the HUD-1 statement, Brickshire did not prepare any of the documents relating to the Loan; rather, Duncan drafted the documents and later provided them to Brickshire. Id. All the loan documents prepared by Duncan and provided to Brickshire referred to the Loan as a commercial loan; from the face of the documents, there was no indication that the Loan was consumer in nature. Id. at 138. Succinctly stated, "Brickshire's role was to order the title search, obtain the title insurance, prepare the [] release, disburse certain monies received after settlement and . . . prepare the HUD-1." Id. at 137. Even as to the HUD-1 statement, Brickshire relied on information provided by Duncan. Id. In its final form, it contained two purported inaccuracies, both of which Plaintiff's own expert essentially described as harmless. Id. at 137-38.

Based on the undisputed facts, the Court held in its February 12, 2010 decision that, even assuming that the Loan was actually a personal loan disguised as a commercial transaction, there was no evidence "suggest[ing] that Brickshire knew or had reason to know that the [] Loan was anything but a commercial loan." Sloan II, 689 F. Supp. 2d at 138. Therefore, the Court found that Plaintiff "ha[d] failed to proffer any fact from which a reasonable jury could conclude that Brickshire 'fraudulently disguis[ed]' the [] Loan as a commercial loan." Id. at 139. In addition, the Court held that no reasonable jury could find that the statements or omissions in the HUD-1 statement were "material with a tendency to mislead." Id. Based on these conclusions, the Court determined that Brickshire was entitled to summary judgment under two of the three CPPA subsections relied upon by Plaintiff. Id. at 140. Plaintiff subsequently withdrew her claim as it pertained to a third and final subsection. See Min. Order (Mar. 13, 2010). Accordingly, Plaintiff's CPPA claim is no longer at issue in this litigation. Nonetheless, in support of the instant motion, Brickshire essentially argues that the Court's reasoning as to the CPPA claim applies with equal force to Plaintiff's claims for breach of contract, breach of fiduciary duty, and negligence.

During the pendency of this litigation, Plaintiff sold the Condo to third-party purchasers, prompting the Court to request supplemental briefing from the parties as to whether the sale had rendered moot a further factual component of Plaintiff's claims for breach of contract, breach of fiduciary duty, and negligence (Counts XXI, XXII, and XXIII)-namely, Plaintiff's allegation that Brickshire "fail[ed] to notarize and authenticate loan documents by a licensed notary." 4th Am. Compl. ¶¶ 377, 384, 393. On April 7, 2010, based on Plaintiff's explicit concession that the defective notarization issue was moot, the Court dismissed Plaintiff's claims for breach of contract, breach of fiduciary duty, and negligence insofar as those claims were based on allegations that Brickshire failed to properly notarize and authenticate loan documents by a licensed notary. See Sloan v. Urban Title Servs., LLC, 702 F. Supp. 2d 1, 4-5 (D.D.C. 2010) (hereinafter, "Sloan III"). Accordingly, that allegation is no longer at issue.

On April 26, 2010, Brickshire moved to file a supplemental motion for summary judgment on the limited issue of whether the law of the case doctrine requires that judgment be entered in its favor on Plaintiff's claims for breach of contract, breach of fiduciary duty, and negligence (Counts XXI, XXII, and XXIII). See Def.'s Mot. for Leave to File a Suppl. Mot. for Summ. J., Docket No. [266]. As characterized by Brickshire, the anticipated motion would "merely ask[] the Court to grant summary judgment regarding claims which have already been addressed by this Court" in its prior decision. See Defs.' Mem. in Supp. of Mot. for Leave to File a Suppl. Mot. for Summ. J., Docket No. [266-1], at 2. Even though the motion was not contemplated by any scheduling order in the case, the Court granted Brickshire leave to file a motion for summary judgment on this discrete issue-specifically, the effect of the law of the case doctrine on Plaintiff's claims for breach of contract, breach of fiduciary duty, and negligence. See Min. Order (Apr. 23, 2010); Min. Order (Apr. 27, 2010).

On April 27, 2010, Brickshire filed its opening memorandum. See Def.'s Mem. in Supp. of Suppl. Mot. for Summ. J. ("Def.'s Mem."), Docket No. [267]. Plaintiff filed a timely opposition. See Pl.'s Opp'n to Def.'s Suppl. Mot. for Summ. J. ("Pl.'s Opp'n"), Docket No. [269]. Brickshire filed a reply. See Def.'s Reply in Supp. of Suppl. Mot. for Summ. J. ("Def.'s ...


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