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District Title v. Warren

United States District Court, District of Columbia

November 13, 2015

DISTRICT TITLE, Plaintiff,
v.
ANITA K. WARREN, et al., Defendants.

MEMORANDUM OPINION

AMY BERMAN JACKSON JUDGE

Plaintiff District Title, a real estate settlement company, was handling the sale of a property formerly owned by defendant Anita K. Warren when it erroneously transferred $293, 514.44 to Warren instead of to the mortgage lender, non-party Wells Fargo Bank, N.A. Am. Compl. [Dkt. # 5] ¶ 15. Warren promptly transferred the funds to her son, who immediately purchased property, and now the two refuse to give the money back. See Pl.’s Statement of Material Facts Not In Genuine Dispute [Dkt. # 76-2] (“Pl.’s SOF”) ¶¶ 14-30.

Plaintiff filed this action against Warren and her son, defendant Timothy Day, and on September 28, 2015, it moved for summary judgment. Pl.’s Mot. for Summ. J. [Dkt. # 76] (“Pl.’s Mot.”); Mem. of P. & A. in Supp. of Mot. for Summ. J. [Dkt. # 76-1] (“Pl.’s Mem.”). Defendants opposed the motion, but solely on legal grounds. Defs.’ Opp. to Mot. for Summ. J. [Dkt. # 77] (“Defs.’ Opp.”). Plaintiff accompanied its motion with the necessary statement of undisputed material facts. Pl.’s SOF. But defendants did not file “a separate concise statement of genuine issues setting forth all material facts as to which it is contended there exists a genuine issue necessary to be litigated, ” as required by Local Civil Rule 7(h)(1). Since defendants have failed to controvert any of the facts stated by plaintiff, the Court will deem those facts to be admitted. LCvR 7(h)(1) (“[T]he Court may assume that facts identified by the moving party in its statement of material facts are admitted, unless such a fact is controverted in the statement of genuine issues filed in opposition to the motion.”). Furthermore, defendants have admitted the salient facts in their responses to plaintiff’s Requests for Admissions. See Exs. 3-4 to Pl.’s Mot. [Dkt. # 76-5, 75-6]. For those reasons and for the additional reasons stated below, the Court will grant plaintiff’s motion for summary judgment.

BACKGROUND

The Court has set forth the background of this case in numerous previous orders; see Order (Dec. 15, 2014) [Dkt. # 21] (granting plaintiff’s motion for preliminary injunction); Order (Jan. 9, 2015) [Dkt. # 29] (denying defendants’ motion to stay preliminary injunction); Mem. Op. & Order (June 1, 2015) [Dkt. # 40] (denying defendants’ motions to dismiss and defendant Warren’s motion to compel arbitration and stay proceedings); Mem. Op. & Order (June 15, 2015) [Dkt. # 46] (denying defendants’ motion to stay discovery), but the facts supporting summary judgment will be summarized again here.

Plaintiff is a real estate settlement company that, on July 11, 2014, handled the sale of a property formerly owned by defendant Warren. Pl.’s SOF ¶¶ 1, 7. At the time of the sale, plaintiff mistakenly wired $293, 514.44 that was owed to Wells Fargo, the mortgage lender, to defendant Warren. Id. ¶ 12. Defendant Warren’s adult son, Day, assisted his mother with the settlement process and was present at the closing. Id. ¶ 7. Since that time, defendant Warren has transferred those funds to Day and others, see Exs. 11-13 to Pl.’s Mot. [Dkt. # 76-13, 76-14, 76-15] (cashier’s checks that evidence transfers from Warren to Day totaling $99, 450.00); Ex. 2 to Am. Compl. [Dkt. # 5-6] ($100, 000 transferred from Anita Warren to Timothy Day and Anthony Silva and Suzanne Silva, relatives of Warren and Day, deposited into an account owned by Silva); and the money has been spent on real estate, vehicles, and other personal expenses. Exs. 3-4 to Am. Compl. [Dkt. # 5-3, 5-4] (transfer of $60, 600 by the Silvas to purchase a home); Exs. 14-16 to Pl.’s Mot. ($27, 185.14 in cashier’s checks from Warren to Fitzgerald Auto Mall that Warren testified Day used to purchase a Jeep on July 14, 2014); Ex. 5 to Am. Compl. [Dkt. # 5-5] ($189, 028.98 transferred from Day to a title company to purchase a house on August 20, 2014).[1]Defendants have repeatedly refused to return the funds. Id. ¶¶ 29-30.

Plaintiff filed its original complaint in the Superior Court for the District of Columbia on September 2, 2014. Compl., Notice of Removal [Dkt. # 1-1]. Plaintiff filed a parallel action in the Circuit Court for Worcester County, Maryland on September 5, 2014. Maryland Judiciary Case Search, http://casesearch.courts.state.md.us/ (search for Worcester County Circuit Court case number 23-C-14-001158).

Defendants invoked this Court’s jurisdiction by removing the Superior Court action on October 29, 2014. Notice of Removal [Dkt. # 1]. Plaintiff filed an amended complaint on November 10, 2014, which contains four counts. Am. Compl. Count I, breach of contract, is brought solely against defendant Warren. Id. ¶¶ 26-32. The remaining counts - trover and conversion (Count II), unjust enrichment (Count III), and equitable and injunctive relief (Count IV) - are brought against both defendants. Id. ¶¶ 33-62. Plaintiff seeks: a judgment of at least $293, 514.44 with prejudgment and postjudgment interest; equitable relief; an order that defendants provide an accounting; an order enjoining defendants from dissipating assets; and attorneys’ fees and costs.

On November 19, 2014, plaintiff filed a motion for a preliminary injunction, seeking to prevent defendants from further dissipating any of the $293, 514.44 or from transferring any real property. Pl.’s Mot. for Prelim. Inj. [Dkt. # 6]. While that motion was pending, on December 4, 2014, defendants each filed separate motions to dismiss. Def. Day’s Mot. to Dismiss [Dkt. # 10] (“Day MTD”); Def. Warren’s Mot. to Dismiss [Dkt. # 11] (“Warren MTD”). Day moved to dismiss the entire complaint for what he characterized as a lack of subject matter jurisdiction, but was actually a claim that the District of Columbia courts lacked personal jurisdiction over him. Day MTD at 5-9; Mem. Op. & Order (June 1, 2015) (denying defendants’ motions to dismiss). He also moved to dismiss certain counts for failure to state a claim under Rule 12(b)(6). Day MTD at 1. Warren moved to dismiss the state common law claims under Rule 12(b)(6), but did not move to dismiss the breach of contract claim. Warren MTD at 1.

Also, during its review of the pleadings filed in this case, the Court discovered that the settlement contract signed by defendant Warren and plaintiff contained an Alternative Dispute Resolution Clause that required “mandatory, binding arbitration” of “[a]ll disputes, claims, or controversies of any kind and nature arising out of . . . the relationship among the parties and District Title.” See Ex. 10 to Am. Compl. [Dkt. # 5] ¶ F(1). On December 4, 2014, the Court ordered the parties to “file brief submissions addressing the impact of the arbitration clause . . . on the Court’s ability to hear this action” on or before December 9, 2014. Minute Order (Dec. 4, 2014). On December 9, 2014, defendant Warren filed a motion to compel arbitration and to stay all other proceedings. Def. Warren’s Mot. to Compel Arbitration & Stay Proceedings [Dkt. # 14] (“Mot. to Compel”); Mem. of P. & A. in Supp. of Mot. to Compel [Dkt. # 14] (“Mot. to Compel”). That same day, plaintiff filed a memorandum opposing arbitration in the case. Mem. of Pl. Regarding Arbitration Provision [Dkt. # 19].

The Court heard argument on plaintiff’s motion for a preliminary injunction on December 12, 2014. Min. Entry (Dec. 12, 2014). The Court granted plaintiff’s motion for a preliminary injunction on December 15, 2014. Order (Dec. 15, 2014) [Dkt. # 21]. The Court of Appeals later affirmed the issuance of the preliminary injunction. Mandate of the U.S. Court of Appeals [Dkt. # 74] at 1.

On June 1, 2015, the Court denied defendants’ motions to dismiss and defendant Warren’s motion to stay and compel arbitration. Mem. Op. & Order (June 1, 2015) [Dkt. # 40]. As to the arbitration question, the Court found that defendant Warren forfeited her right to arbitration, in part because she “acted inconsistently with the arbitration right.” Id. at 23-24, citing Khan v. Parsons Global Servs., 521 F.3d 421, 425 (D.C. Cir. 2008) (alteration omitted). And the Court found ample grounds to support personal jurisdiction over defendant Day under the D.C. long arm statute. Id. at 13-18.

At that point, the Court entered a scheduling order authorizing plaintiff to initiate discovery. Order (June 4, 2015) [Dkt. # 41]. But, on June 8, 2015, defendants moved for summary judgment. Mot. for Summ. J. [Dkt. # 43]. They asserted that the Court lacked subject-matter jurisdiction over the case, but this time on the grounds that plaintiff did not have standing to pursue it. Id. at 1. On July 30, 2015, the Court denied defendants’ motion for summary judgment, finding that plaintiff had standing to pursue its case. Order (July 30, 2015) [Dkt. # 50]; Mem. Op. (July 30, 2015) [Dkt. # 51]. The Court later denied defendants’ motion for reconsideration of the denial of summary judgment, in which defendants’ continued to press the standing concerns. Order (Aug. 11, 2015) [Dkt. # 56]. On August 11, 2015, defendants filed a writ of prohibition in the D.C. Circuit, attempting to enjoin the Court from taking further action in this case on the ground that the Court lacked jurisdiction, given the absence of standing. The Court of Appeals rejected defendants’ arguments in a one-page per curiam order; the panel noted that defendants may challenge plaintiff’s standing on appeal after a final judgment. In re Warren, No. 15-5225 (D.C. Cir. Oct. 27, 2015).

On September 28, 2015, District Title moved for summary judgment. Pl.’s Mot. Defendants oppose the motion. Defs.’ Opp. Defendants devote the bulk of their memorandum to arguing - once again - that plaintiff lacks standing to bring this suit. Defs.’ Opp. at 2-14. Defendants also reiterate their argument that Warren is entitled to arbitrate the breach of contract claim. Id. at 18- 21. They have not identified any genuine disputes of fact that would preclude summary judgment. See generally Defs.’ Opp.

STANDARD OF REVIEW

Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The party seeking summary judgment “bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (internal quotation marks omitted). To defeat summary judgment, the non-moving party must “designate specific facts showing that there is a genuine issue for trial.” Id. at 324 (internal quotation marks omitted).

The mere existence of a factual dispute is insufficient to preclude summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). A dispute is “genuine” only if a reasonable fact-finder could find for the non-moving party; a fact is “material” only if it is capable of affecting the outcome of the litigation. Id. at 248; Laningham v. U.S. Navy, 813 F.2d 1236, 1241 (D.C. Cir. 1987). In assessing a party’s motion, the court must “view the facts and draw reasonable inferences ‘in the light most favorable to the party opposing the summary judgment motion.’” Scott v. Harris, 550 U.S. 372, 378 (2007) (alterations omitted), quoting United States v. Diebold, Inc., 369 U.S. 654, 655 (1962) (per curiam).

ANALYSIS

I. Plaintiff has constitutional standing

In opposing plaintiff’s motion for summary judgment, defendants, who removed the action to this Court in the first place, assert that plaintiff lacks Article III standing, and that the Court lacks subject matter jurisdiction, on the theory that plaintiff cannot sue to recover money that is owed to a third party. Defs.’ Opp. at 4. Defendants have made this same argument at least five times, and each time it has been rejected. This time defendants provide no new grounds for ...


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