June 6, 2013
from the Superior Court of the District of Columbia.
(CAR-6061-11). (Hon. John M. Mott, Trial Judge).
T. Spikes, Sr. was on the brief for appellants.
J. Kokolis was on the brief for appellee.
BLACKBURNE-RIGSBY and MCLEESE, Associate Judges, and NEBEKER,
McLeese, Associate Judge
Appellants Rufus and Delores Stancil brought this action
against appellee First Mount Vernon Industrial Loan
Association (" FMV" ). The Stancils initially
sought to prevent FMV from foreclosing on a commercial
property that the Stancils had purchased. After the trial
court declined to prevent a foreclosure sale, the Stancils
sought to recover damages, claiming among other things that
FMV had made fraudulent misrepresentations and had breached
an oral agreement to forbear from foreclosure. The trial
court granted FMV's motion to dismiss the amended
complaint for failure to state a claim, and the Stancils
appealed. We affirm in part and reverse in part.
Because we are reviewing an order granting a motion to
dismiss for failure to state a claim, we take the facts as
alleged in the complaint. Jordan Keys & Jessamy, LLP
v. St. Paul Fire & Marine Ins. Co., 870 A.2d 58, 62
(D.C. 2005). According to the complaint, the Stancils
borrowed $500,000 from FMV in April 2009 to purchase a
property in the District of Columbia. The note executed in
connection with the transaction provided for an annual
interest rate of 18% and a default annual interest rate of
concluding that the Stancils were in default, FMV took steps
to foreclose on the property. In June 2011, however, the
Stancils and FMV entered into an oral contract pursuant to
which the Stancils paid FMV $170,000 and FMV agreed to modify
the terms of the note and to forbear from foreclosing on the
property. The $170,000 payment reflected a $100,000 charge
for attorney's fees, a $20,000 fee to FMV, and $50,000
payment as consideration for the forbearance agreement. The
$100,000 charge for attorney's fees related to a
provision in the note making the Stancils responsible, in the
event of a default, for " all costs of collections,
including . . . attorney's fees of at least 20% of the
outstanding indebtedness . . . ." Before the Stancils
made the $170,000 payment, FMV promised to reduce the
forbearance agreement to writing, and the Stancils relied on
that promise in making the payment. Despite its promise, FMV
failed to reduce the forbearance agreement to writing. FMV
later foreclosed on the property, which was sold in January
pertinent part, the complaint raises the following claims:
(1) fraudulent misrepresentation with respect to the $100,000
charge for attorney's fees, because there was no evidence
that FMV incurred expenses for attorney's fees, and the
" fee was unnecessary, inappropriate, . . . not default
service related[,] and . . . clearly fraudulent . . . ."
; (2) fraudulent misrepresentation with respect to the
$50,000 payment for foreclosure forbearance, because FMV
refused to acknowledge receipt of the payment; (3) wrongful
the foreclosure violated various statutory requirements and
was a breach of the oral forbearance agreement; (4) breach of
the oral forbearance agreement; and (5) fraudulent
misrepresentation, because FMV never intended to honor the
oral forbearance agreement.
trial court granted FMV's motion to dismiss the complaint
for failure to state a claim. As to the claim of fraudulent
misrepresentation with respect to the $100,000 charge for
attorney's fees, the trial court concluded that the
Stancils had not identified any false statement upon which
they had relied. As to the claim for wrongful foreclosure,
the trial court rejected the Stancils' statutory claims,
which the Stancils have not renewed on appeal. The trial
court did not expressly address the Stancils' claim that
the foreclosure was wrongful because it violated the oral
forbearance agreement. As to the claim of breach of the oral
forbearance agreement, the trial court relied on the statute
of frauds, D.C. Code § 28-3502 (2012 Repl.) (action may
not be brought to enforce agreement concerning real estate
unless agreement is in writing). The trial court acknowledged
that oral agreements concerning real estate may in some
circumstances be enforceable on estoppel grounds, but saw no
basis for estoppel in this case. Finally, with respect to the
claims of fraudulent misrepresentation regarding the oral
forbearance agreement, the trial court relied on the
parol-evidence rule, which precludes introduction of "
extrinsic or parol evidence which tends to contradict, vary,
add to, or subtract from the terms of a written contract . .
. ." Segal Wholesale, Inc. v. United Drug
Serv., 933 A.2d 780, 783 (D.C. 2007) (internal quotation
court reviews de novo the trial court's decision to
dismiss a complaint for failure to state a claim.
See Jordan Keys & Jessamy, 870 A.2d at
62. We accept the allegations in the complaint as true and
view all facts and draw all reasonable inferences in favor of
the plaintiff. Id.
affirm the trial court's dismissal of the claim of
fraudulent misrepresentation as to the $100,000 charge for
attorney's fees (count II). " To prove a claim of
fraudulent misrepresentation, [plaintiffs] must prove (1) a
false representation, (2) in reference to a material fact,
(3) made with knowledge of its falsity, (4) with the intent
to deceive, and (5) action taken by [the plaintiffs] in
reliance upon the representation, (6) which consequently
resulted in provable damages." Railan v.
Katyal, 766 A.2d 998, 1009 (D.C. 2001) (internal
quotation marks omitted). With respect to the charge for
attorney's fees, the trial court correctly concluded that
the Stancils did not identify any fraudulent
misrepresentation upon which they detrimentally relied. To
the contrary, the $100,000 charge was based on the express
language of the note, which provides that, in the event of a
default, the ...