United States District Court, District of Columbia
OPINION GRANTING DEFENDANTS' MOTION FOR LEAVE TO LATE
FILE OPPOSITION TO PLAINTIFF'S MOTION TO PARTIALLY
DISMISS; GRANTING IN PART AND DENYING IN PART PLAINTIFF'S
MOTION TO PARTIALLY DISMISS DEFENDANTS' COUNTERCLAIM;
DENYING AS MOOT DEFENDANTS' MOTION FOR LEAVE TO LATE FILE
OPPOSITION CONCERNING LIS PENDENS
RUDOLPH CONTRERAS UNITED STATES DISTRICT JUDGE.
Presidential Bank, FSB, loaned money to Defendant and secured
the loans with real property owned by Defendants and rented
to others. After Defendants defaulted on the loans, the
parties entered into several loan modification agreements.
One of these agreements gave Plaintiff significant control
over Defendants' rental income. The modifications were
unavailing in restoring harmony to the lending relationship,
however, and Plaintiff subsequently brought suit alleging
that Defendants had converted some rental income rather than
turning it over to Plaintiff. In response, Defendants lobbed
a salvo of affirmative defenses and counterclaimed that
Plaintiff's execution of the modification agreements had,
in fact, been wrongful and caused Defendants' financial
difficulties. Plaintiff now moves for this Court to dismiss
Counts I, II, III, V, VI, VII and IX of Defendants'
counterclaim. Plaintiff does not move to dismiss Count IV or
VIII of the counterclaim. For the reasons stated below, the
Court will grant Plaintiff's motion.
resolving Plaintiff's motion to dismiss, the Court
“assume[s] the truth of the factual allegations of the
counterclaim and liberally construe[s] them in favor of
[counter-claimants].” Barnstead Broad. Corp. v.
Offshore Broad. Corp., 886 F.Supp. 874, 878 (D.D.C.
1995). Defendants (and counter-claimants) are six District of
Columbia limited liability companies and Kevin Green. Defs.'
Affirmative Defenses, Answers & Counter-Claims
(Defs.' Answer) at 19- 20, ECF No. 12. Mr. Green is an
individual and “sole management-member of the
counter-plaintiff Limited Liability Companies.”
Defs.' Answer at 20.
made various loans to each of the Defendant-LLCs, secured by
various deeds of trust. ECF No. 20-23. Each Defendant-LLC
owned associated real property which served as collateral on
the loans. Compl. ¶¶ 24-34, ECF No. 1-1, Ex. A;
see also Compl. ¶ 5, ECF No. 1-1, Ex. A.
Defendants subsequently defaulted on the loans, and entered
into a “Global Loan Modification Agreement” in
October of 2014. Defs.' Answer at 23; see also
Compl. ¶ 9. Pursuant to the Global Loan Modification
Agreement, Defendants assert that Presidential later obtained
a confessed judgment against Defendants in Maryland state
court, which is currently pending appeal at the Maryland
Court of Special Appeals. Defs.' Answer at 24. Problems
between Plaintiff and Defendants persisted, and in 2015 the
parties entered into a second modification agreement, the
Forbearance Agreement. Defs.' Answer at 25; see also
Compl. ¶ 12; Forbearance Agreement, ECF No. 17-2.
According to Defendants, the Forbearance Agreement
“gave Presidential total control over Borrowers'
business, ” including “control of . . . rental
payments” made to Defendants by their tenants.
Defs.' Answer at 25; see also Compl.
to the Forbearance Agreement, problems with paying the loans
continued, and Presidential eventually foreclosed on the
properties. Defs.' Answer at 29. However, Defendants
claim that the income received by the properties should have
been sufficient or nearly sufficient to pay their mortgages.
See generally Defs.' Answer at 26-27; see
also Defs.' Answer at 27 (stating that, based on
“mortgage payments owed by Borrowers to
Presidential” and “Borrowers' Net Operating
Income, ” “Borrowers would have a negative cash
flow of only $3, 080.00”); Defs.' Answer at 27
(“For the better course of 2015 and early 2016,
Presidential's motive operandi [sic], based upon its
perceived authority under the [Forbearance] Agreement, was to
block Borrowers' access to their funds; via their control
of the Borrower's [sic] income, to impede Borrowers from
making timely mortgage payments; similarly delay or reverse
timely loan payments; apply payments retroactively to cover
those payments they delayed or reversed . . . .”). In
2016, Mr. Green also filed one or more complaints with the
Office of the Comptroller of Currency, alleging that
Plaintiff had discriminated against Defendants on the basis
of race in violation of the ECOA. Defs.' Answer at 28;
see generally ECF No. 12, Ex. C.
matter began in D.C. Superior Court, where Plaintiffs
asserted that Defendants had wrongfully kept some of the rent
paid by their tenants, and sought money damages and the
appointment of a receiver. See generally Compl., ECF
No. 1-1, Ex. A. Defendants removed the case to this Court.
Errata to Notice of Removal, ECF No. 4. Subsequently,
Defendants unsuccessfully sought either that the case be
stayed or that a temporary restraining order issue.
Defs.' Emergency Mot. Stay or Temp. Restraining Order,
ECF No. 8; Minute Entry of January 6, 2017; Order, ECF No. 11
(denying Defendants' motion for a stay or temporary
restraining order). As an ancillary matter, Plaintiff filed
an emergency motion requesting that this Court cancel a
lis pendens recorded by Defendants, Pl.'s
Emergency Mot. Order Canceling Lis Pendens, ECF No.
15, and this Court granted the motion as conceded after
Defendants failed to oppose it. Order, ECF No. 23.
answered Plaintiff's complaint and asserted multiple
affirmative defenses and the nine-count counterclaim at issue
here. See generally Defs.' Answer. The nine
counts of the counterclaim argue, in various ways, that
Plaintiff wrongfully used the Forbearance Agreement to
“intentionally, deliberately and maliciously force
Borrowers' respective mortgage accounts into
delinquency.” Defs.' Answer at 25.
Court now addresses Plaintiffs motion to dismiss Counts I,
II, III, V, VI, VII, and IX of Defendants' counterclaim.
Pl.'s Mot. Dismiss Counts I, II, III, V, VI, VII, &
Defs.' Counterclaim, ECF No. 17; see also Mem.
P. & A. Supp. Pl.'s Mot. Dismiss (Pl.'s Partial
MTD), ECF No. 17-1. Defendants did not oppose this motion
within time, but now move to for leave to late file their
opposition, Defs.' Mot. Leave Late File Opp'n
Pl.'s Mot. Dismiss, ECF No. 29, a motion which Plaintiff
opposes, Pl.'s Opp'n Defs.' Mot. Late File
Opp'n (Pl.'s Opp'n Leave File), ECF No. 30.
Defendants' motion for leave to late file its opposition
contained as an attachment Defendants' substantive
opposition to Plaintiffs partial motion to dismiss, see
generally Defs.' Mot. Leave File, Defs.' Mem.
Opp'n Pl.'s Mot. Dismiss Counterclaim (Defs.'
Opp'n), ECF No. 29-1, and Plaintiffs opposition to
Defendants' motion for leave also contains
Plaintiffs' substantive responses to Defendants'
motion, see generally Pl.'s Opp'n Leave
File. Therefore, having determined that Defendants should be
granted leave to late file their opposition,  and having
considered the substantive arguments presented in
Defendants' opposition and Plaintiff's responses to
them, Plaintiff's motion to partially dismiss the
counterclaim is ripe for adjudication.
evaluating a motion to dismiss pursuant to Federal Rule of
Civil Procedure 12(b)(6) for failure to state a claim, a
court construes the complaint in the light most favorable to
the non-movant and accepts as true all reasonable factual
inferences that can be drawn from well-pleaded factual
allegations. In re United Mine Workers of Am. Employee
Benefit Plans Litig., 854 F.Supp. 914, 915 (D.D.C.
1994). The same standards are applicable when a plaintiff
moves to dismiss a defendants' counterclaims. Wharf,
Inc. v. District of Columbia, 232 F.Supp.3d 9, 15-16
(D.D.C. 2017). In deciding a Rule 12(b)(6) motion, a court
may consider “the facts alleged in the complaint,
documents attached as exhibits or incorporated by reference
in the complaint.” Ward v. D.C. Dep't of Youth
Rehab. Servs., 768 F.Supp.2d 117, 119 (D.D.C. 2011)
motion to dismiss under Federal Rule of Civil Procedure
12(b)(6) ‘tests the legal sufficiency of a complaint,
' or in this case, a counterclaim. The motion does not
test a plaintiff's ultimate likelihood of success on the
merits, but only forces the court to determine whether a
plaintiff has properly stated a claim.” Boland v.
Wasco, Inc., 50 F.Supp.3d 1, 4-5 (D.D.C. 2014) (quoting
Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir.
2002) and citing ACLU Found. of S. Cal. v. Barr, 952
F.2d 457, 467 (D.C. Cir. 1991)). In order to survive such a
motion, the counterclaim must “contain sufficient
factual matter, accepted as true, to state a claim to relief
that is plausible on its face.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (internal quotation
marks omitted); see also Bell Atl. Corp. v. Twombly,
550 U.S. 544, 562 (2007). “The plausibility standard is
not akin to a ‘probability requirement, ' but it
asks for more than a sheer possibility that a defendant has
acted unlawfully.” Iqbal, 556 U.S. at 678
(citing Twombly, 550 U.S. at 557). “The court
need not accept as true inferences unsupported by facts set
out in the complaint or legal conclusions cast as factual
allegations.” Boland, 50 F.Supp. at 5 (citing
Warren v. District of Columbia, 353 F.3d 36, 39-40
(D.C. Cir. 2004)). “Threadbare recitals of the elements
of a cause of action, supported by mere conclusory
statements, do not suffice.” Iqbal, 556 U.S.
at 678 (citing Twombly, 550 U.S. at 555).
moves to dismiss Counts I, II, III, V, VI, and IX of
Defendants' counterclaim. The Court addresses each in
of Defendants' counterclaim raises three claims under the
Equal Credit Opportunity Act (ECOA): race-based
discrimination, income-based discrimination, and retaliation.
Pl.'s Partial MTD at 3, ECF No. 17-1. Under the ECOA,
It shall be unlawful for any creditor to discriminate against
any applicant with respect to any aspect of a credit
(1) on the basis of race [or] color . . .
(2) because all or part of the applicant's income derives
from any public ...