United States District Court, District of Columbia
C. Lamberth, United States District Judge
before the Court is the partial motion to dismiss [ECF No. 9]
by Defendants Close It! Title Services, Inc ("Close
It!") d/b/a Federal Title & Escrow Company
("Federal Title"), Todd Ewing, and Melina
Schifflett (collectively "Federal Title
Defendants") and the plaintiffs' Motion for
Extension of Time to Serve Certain Defendants [ECF No. 16].
Upon consideration, the Federal Title Defendants' motion
is GRANTED IN PART and DENIED IN
PART and the plaintiffs' motion is
DENIED AS MOOT. For additional reasons
outlined below, the Court dismisses the case in toto
Sean Smith and Erin Wrona ("Plaintiffs") are
married residents of the District of Columbia. ECF No. 1, at
¶ 5. In May of 2017, the couple entered into a sales
contract to purchase a home located at 3673 Upton Street,
N.W., Washington, D.C. 20008 for $1, 738, 750.00.
Id. at ¶ 15. To assist with closing, they
contracted with Federal Title, a title company organized
under the laws of Washington, D.C. with its principal place
of business also located in Washington, D.C. Id. at
¶¶ 7, 15.
4, 2017, Melina Schifflett, a settlement coordinator with
Federal Title, reached out to Plaintiffs instructing the
couple to wire $200, 000 to Federal Title as an earnest money
deposit. Id. at ¶¶ 17, 18. The couple
complied and received an email confirmation from Federal
Title confirming the money was received. Id. at
¶¶ 18-19. Several days later, Plaintiffs received
an email forwarding a request from Schifflett with
instructions for wiring the remaining balance (shown in the
email as $1, 572, 097.70) to a Chase bank account in the name
of Federal Title with further credit to JMZ Equities, LLC, a
Florida limited liability company owned by Jeff
Zorbo. Id. at ¶¶ 21-22. Prior
to completing the transaction, Smith reached out to
Schifflett to ask why the bank account number was different
from the account where he wired the deposit. Id. at
¶ 24. Schifflett explained that Federal Title used
different accounts for different amounts and Smith moved
forward with the wire transfer. Id. at ¶ 26.
The following day, Plaintiffs received an email from
Schifflet confirming that their funds had been received.
Id. at ¶ 27.
19, 2017, Plaintiffs reported to Federal Title's offices
to close the transaction. Id. at ¶ 31. The
closing would be conducted by Todd Ewing, founder of Federal
Title and a licensed attorney. Id. at ¶¶
8, 32. Midway through closing, Ewing inquired about
Plaintiffs wiring the remaining balance on the total purchase
price. Id. at ¶ 34. When Plaintiffs told Ewing
that the funds had already been wired, Ewing left the room to
confer with other Federal Title personnel. Id. at
¶ 35. At first, Ewing told the Plaintiffs that their
email had been hacked and that the only way to close the
transaction would be to come up with an additional $1.57
million. Id. at ¶¶ 36- 37. Distraught and
yet determined to close the deal, Plaintiffs and their family
wired the additional funds. Id.
was contacted immediately, and it was determined that the
money the Plaintiffs previously wired had been wired out of
the Chase bank account to which they sent the money.
Id. at ¶ 38. Several days later, Ewing
contacted Smith and stated that it was Federal Title's
email, not that of the Plaintiffs, that was hacked.
Id. at ¶ 39. Someone had commandeered Federal
Title's computer services, learned about Plaintiffs'
transaction, and sent, from Schifflett's email account,
the wiring instructions that led to the theft of
Plaintiffs' funds. Id.
have yet to recover the $1.57 million that was wired for the
home and seek relief in this Court. Id. at ¶
40. Specifically, Plaintiffs allege: (i) violations of the
Racketeering Influenced and Corrupt Organizations Act
("RICO") against all defendants; (ii) conversion
against all defendants; (iii) civil conspiracy against all
defendants; (iv) negligence against the Federal Title
Defendants; (v) breach of contract against Federal Title and
Close It!; (vi) breach of implied covenant of good faith and
fair dealing against Federal Title and Close It!; (vii)
breach of fiduciary duty against Federal Title, Close It!,
and Ewing; and (viii) legal malpractice against Ewing.
Defendants' Partial Motion to Dismiss
Federal Title Defendants move, pursuant to Federal Rule of
Civil Procedure Rule 12(b)(6), to partially dismiss
Plaintiffs' complaint for failure to state a claim as to
certain causes of action against certain parties.
Specifically, the Federal Title Defendants seek to dismiss
the causes of action related to RICO, conversion, civil
conspiracy, and legal malpractice. For the reasons outlined
below, the Court need only address the motion as it relates
to the RICO claim.
survive a Rule 12(b)(6) motion to dismiss, "a complaint
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, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct.
1955, 167 L.Ed.2d 929 (2007)). When considering a motion to
dismiss under Rule 12(b)(6), "the court must assume
'all the allegations in the complaint are true (even if
doubtful in fact), ' and the court must give the
plaintiff the benefit of all reasonable inferences derived
from the facts alleged.'" Aktieselskabet AF 21.
Nov. 2001 v. Fame Jeans Inc., 525 F.3d 8, 17 (D.C. Cir.
2008) (internal citations omitted).
The RICO Claim
violation of § 1962(a) of the RICO Act consists of four
elements: "(1) conduct (2) of an enterprise (3) through
a pattern (4) of racketeering activity." W. Assocs.
Ltd. P'ship v. Mkt Square Assocs.,235 F.3d 629, 633
(D.C. Cir. 2000) (citing Sedima, S.P.R.L. v. Imrex
Co.,473 U.S. 479, 496, 105 S.Ct. 3275, 87 L.Ed.2d 346
(1985)). Because Plaintiffs fail to allege sufficient facts
to plausibly plead ...