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Friends Christian High Sch. v. Geneva Fin. Consultants

United States District Court, D. Columbia.

April 24, 2014

FRIENDS CHRISTIAN HIGH SCHOOL, Plaintiff,
v.
GENEVA FINANCIAL CONSULTANTS, et al., Defendants

Page 59

For FRIENDS CHRISTIAN HIGH SCHOOL, Plaintiff: James Dygert Skeen, SKEEN & KAUFMAN, LLP, Baltimore, MD.

For MARK LEZELL, Defendant: Peter L. Goldman, LEAD ATTORNEY, O'REILLY & MARK, P.C., Alexandria, VA.

Page 60

MEMORANDUM OPINION AND ORDER

ELLEN SEGAL HUVELLE, United States District Judge.

Plaintiff Friends Christian High School (" FCHS" ) brings this diversity [1] action against Geneva Financial Consultants, LLC (" Geneva" ), Isam Ghosh, and Mark Lezell, seeking compensatory and punitive damages for breach of contract, civil conspiracy, breach of fiduciary duty, negligence and fraud/intentional misrepresentation. ( See Compl., Sept. 20, 2013 [ECF No. 1].) Lezell has filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6).[2](Def. Mark Lezell's Mot. to Dismiss the Pl.'s Compl., Feb. 14, 2014 [ECF No. 14].) For the reasons stated herein, Lezell's motion to dismiss is granted in part and denied in part.

BACKGROUND

The facts as alleged in the complaint are as follows. On September 14, 2010, FCHS entered into a contract with Geneva and Ghosh, Geneva's managing member, pursuant to which Geneva was to obtain funding for a thirty million dollar construction loan in exchange for three million dollars in fees, reduced by an initial escrow deposit of $250,000 (" Financing Agreement" ).

Page 61

(¶ ¶ 9, 10, 24.) FCHS simultaneously entered into an escrow agreement with Lezell (" Escrow Agreement" ), pursuant to which FCHS deposited $250,000 in an escrow account, with Lezell as the escrow agent. (¶ ¶ 10, 13, 16, 29.) The Escrow Agreement provided that the $250,000 was to be returned to FCHS if financing was not obtained by October 31, 2010. (¶ ¶ 14, 28.) At that time, Lezell was a practicing attorney in the District of Columbia, who advertised himself as " assisting businesses in obtaining funding for a variety of projects." [3](¶ ¶ 6, 8.)

Geneva failed to obtain funding by October 31, 2010. (¶ ¶ 19, 30.) On February 1, 2011, FCHS made an initial request for the return of the escrow funds. (¶ 19.) On September 8, 2011, FCHS made another request for return of the funds. (¶ 20.) On March 21, 2012, Ghosh " acknowledged liability for the escrow funds and acknowledged that the escrow funds were to be returned to [FCHS]." (¶ 21.) On August 3, 2012, FCHS sent a final request for payment to Lezell and Ghosh. (¶ 22.) To date, no money has been returned to FCHS nor has any accounting been provided. (¶ 30.)

According to FCHS, defendants induced it to enter into the Financing Agreement and the Escrow Agreement by misrepresenting Geneva's ability to obtain construction financing and misleading FCHS about their backgrounds and qualifications. (¶ ¶ 32, 34, 41, 45, 46, 48.) FCHS further alleges that defendants had an agreement or plan to defraud FCHS of the escrow funds (¶ 35) and ultimately did withdraw the escrow funds and distribute them to themselves. (¶ ¶ 34, 39.)

Based on these allegations, FCHS asserts claims against all of the defendants for breach of contract, civil conspiracy, breach of fiduciary duty, negligence, and fraud/intentional misrepresentation. ( See Compl. ¶ ¶ 23-49.) It seeks $250,000 in compensatory damages and $1,000,000 in punitive damages. (Compl., Prayer for Relief.) Only ...


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