United States District Court, D. Columbia.
JOHN COON, Plaintiff, Pro se, Charlestown, WV.
For EDWARD WOOD, BROOK MEYER, CITY HOUSES LLC, Defendants: Aaron L. Handleman, LEAD ATTORNEY, Borislav Kushnir, ECCLESTON & WOLF, P.C., Washington, DC.
BERYL A. HOWELL, United States District Judge.
The plaintiff, John Coon, proceeding pro se, brings numerous state law claims arising out of allegedly incorrect advice provided to him by his real estate agent regarding a sale of property in 2010. Pending before this Court is the defendants' Motion to Dismiss the Complaint,
ECF No. 5. For the reasons stated below, the defendants' motion is granted in part and denied in part.
In 2000, the plaintiff purchased a property " for investment purposes" in Washington D.C. (" the D.C. Property" ). See Compl., ECF No. 1, ¶ 9. The plaintiff was represented in this transaction by the defendant Edward Wood, who is an " associate broker" at defendant City Houses D.C., which is a licensed and registered real estate agency, with its principal place of business in the District of Columbia. Id. ¶ ¶ 3, 5, 9. Brooke Meyer, the third and final defendant, owns City Houses D.C. and is its " principal broker." Id. ¶ ¶ 1, 4.
In 2010, the plaintiff decided to sell the D.C. Property and use the proceeds to finance a new investment property consisting of farm land near Charles Town, West Virginia (" the Farm" ). Id. ¶ 10. To do so, the plaintiff once again retained Wood and City Houses, to assist him. Id. On June 17, 2010, the plaintiff and City Houses executed a Listing Agreement for Improved Real Property (the " Brokerage Agreement" ). See Defs.' Mem. Supp. Mot. Dismiss (" Defs.' Mem." ), Ex. A, ECF No. 5-2. The seven-page Brokerage Agreement provides, in part, that the " purpose" of the agreement is to " grant to [the defendants] the exclusive right to sell, exchange or convey the [D.C. Property.]" Id. ¶ 3. Additionally, under the Brokerage Agreement, the defendants earn their fee when the plaintiff " enters into a sales contract . . . with any buyer procured by seller . . . provided the buyer performs and settles on said contract." Id. ¶ 6(a).
Shortly after entering the Brokerage Agreement, the plaintiff executed a Regional Sales Contract (the " Sales Agreement" ), on June 30, 2010, with another person for the sale of the D.C. Property. See Defs' Mem., Ex. B, ECF No. 5-3. The Sales Agreement provides that City Houses was " retained solely as a real estate agent and not as an attorney, tax advisor, lender, appraiser, surveyor, structural engineer, mold or air quality expert, home inspector or other professional service provider." Id. ¶ 27(d). The Sales Agreement also advises that: " The Broker can counsel on real estate matters, but if legal advice is desired by either party, such party is advised to seek legal counsel. Purchaser and Seller are further advised to seek appropriate professional advice concerning the condition of the Property or tax and insurance matters." Id. ¶ 27.
During the course of Wood and City House's representation, the plaintiff asked Wood whether " the sale of the [D.C.] Property could be accomplished in a way to avoid any capital gains on the [D.C.]
Property." Compl. ¶ 11. Under 26 U.S.C. § 1031, " no gain or loss shall be recognized on the exchange of property held for . . . investment if such property is exchanged solely for property of like kind . . . ." This transaction is known as a " Starker Exchange." In response to the plaintiff's inquiry, Wood advised that the purchase of the D.C. Property in 2000 as a Starker Exchange--a transaction on which Wood had served as the plaintiff's real estate agent--meant the sale of the D.C. Property in 2010 could not be structured so as to avoid payment of capital gains. Compl. ¶ 11. As a result of Wood's representation, the plaintiff proceeded with the sale of the D.C. Property " without implementing the appropriate transaction to qualify" as a Starker Exchange under 26 U.S.C. § 1031. Compl. ¶ 13. The plaintiff alleges--and the defendants have not disputed--that this advice was incorrect. Compare Compl. ¶ 12 with Defs.' Mem.
On September 14, 2010, the plaintiff completed the sale of the D.C. Property and received a check for $545,000. Compl. ¶ 13. The plaintiff used the funds to purchase and make improvements to the Farm. Id. In 2011, the plaintiff " went to his accountant at H& R Block to file his taxes for 2010" and owed in excess of $75,000 in capital gains taxes as a result of the sale of the D.C. Property, which taxes remain outstanding. Id. ¶ ¶ 14, 15.
On September 13, 2013, the plaintiff, now residing in West Virginia, brought this diversity action against defendants Wood, Meyer, and City Houses alleging breach of contract, negligent misrepresentation, breach of fiduciary duty, and violations of D.C. Code § 42-1701, et seq., relating to the sale of the D.C. Property. The plaintiff seeks to recover damages and attorneys' fees. The defendants have moved to dismiss all counts for failure to state a claim. See generally Defs.' Mem.
II. LEGAL STANDARD
Federal Rule of Civil Procedure 8(a)(2) requires that a complaint contain " a short and plain statement of the claim showing that the pleader is entitled to relief," to encourage brevity and, at the same time, " give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (ellipses in original; internal quotations and citations omitted); Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 319, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007). To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the " complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Wood v. Moss, 134 S.Ct. 2056, 2067, 188 L.Ed.2d 1039 (2014) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)). A claim is facially plausible when the plaintiff pleads factual content that is more than " 'merely consistent with' a defendant's liability," but " allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556); see also Rudder v. Williams, 666 F.3d 790, 794, 399 U.S.App.D.C. 45 (D.C. Cir. 2012). Although " detailed factual allegations" are not required to withstand a Rule 12(b)(6) motion, a complaint must offer " more than labels and conclusions" or " formulaic recitation of the elements of a cause of action" to provide " grounds" of " entitle[ment] to relief," Twombly, 550 U.S. at 555 (alteration in original), and " nudge[ ] [the] claims across the line from conceivable to plausible," id. at 570. Thus, " a complaint [does not] suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557).
In considering a motion to dismiss for failure to plead a claim on which relief can be granted, the court must consider the complaint in its entirety, accepting all factual allegations in the complaint as true, even if doubtful in fact. Twombly at 555; Sissel v. U.S. Dep't of Health & Human Servs., No. 13-5202, 760 F.3d 1, 411 U.S.App.D.C. 301, (D.C. Cir. 2014) (in considering Rule 12(b)(6) motion, the " court assumes the truth of all well-pleaded factual allegations in the complaint and construes reasonable inferences from those allegations in the plaintiff's favor, but is not required to accept the plaintiff's legal conclusions as correct" (internal citations omitted)). In addition, courts may " ordinarily examine" other sources " when ruling on Rule 12(b)(6) motions to dismiss, in particular, documents incorporated the complaint by ...