OPINION
PAUL
L. FRIEDMAN UNITED STATES DISTRICT JUDGE.
This
matter comes before the Court on plaintiff CUMIS Insurance
Society, Inc.'s motion for summary judgment, originally
filed on November 8, 2007, and supplemented on May 26, 2017,
and defendant Reginald Clark's motion to dismiss,
originally filed on September 18, 2009, and supplemented on
May 30, 2017. For the following reasons, the Court will deny
both motions.[1] The Court will deny the motion for summary
judgment without prejudice.
I.
FACTUAL AND PROCEDURAL BACKGROUND
This
case has a long history, with two lengthy stays in the
litigation due to related criminal proceedings. As a result,
the Court is only now tasked with resolving the parties'
first substantive dispositive motions in the case. Because it
has not had prior occasion to do so, the Court briefly
summarizes here the factual and procedural background.
Between
April 2001 and July 2003, defendant Reginald Clark was
employed as an accountant for Hoya Federal Credit Union
(“Hoya”) at its Georgetown University branch in
Washington, D.C. See Am. Compl. at ¶¶ 8-9;
Answer at ¶¶ 8-9.[2] CUMIS alleges that during the
course of Mr. Clark's employment, he engaged in
fraudulent conduct that caused financial damages to Hoya. As
Hoya's insurer, CUMIS seeks to recover the funds it
disbursed to Hoya pursuant to its fidelity bond.
More
specifically, CUMIS alleges that Mr. Clark engaged in several
types of fraudulent conduct or schemes. First, CUMIS alleges
that Mr. Clark “often volunteered” to bring the
daily deposits to Hoya's bank, but then “took the
deposit bag to his residence, removed the cash from the
deposits, created new deposit slips without a reference to a
cash deposit, and then deposited the checks the following
business day.” See Am. Compl. at ¶ 12.
Second, CUMIS alleges that Mr. Clark participated in
“stop payment” schemes with checks written from
his own account and the accounts of other Hoya members.
See id. at ¶¶ 13-14. Essentially, by
placing “stop payment” s on checks written from
these accounts and subsequently deleting the records of the
“stop payment” orders, as well as the drafts
themselves, Hoya's bank would pay out the check amounts,
but the funds would not be debited from the accounts. See
id. Finally, CUMIS alleges that Mr. Clark arranged
fraudulent wire transfers on at least three occasions,
processing the largest two “when Hoya's manager was
out of the office” and asserting to another employee
that he “had instructions from Hoya's manager to
carry out the transactions, ” thereby “cloaking
himself in false authority.” See id. at
¶¶ 15-16, 23. CUMIS alleges that this conduct
caused Hoya to suffer losses “in excess of $540,
196.14.” See id. at ¶ 17. And as
Hoya's insurer, CUMIS compensated Hoya in the amount of
$540, 196.14 and now is subrogated to Hoya's rights in
that same amount. See id. at ¶ 18.
On June
28, 2005, CUMIS brought suit against Mr. Clark alleging
fraud, breach of fiduciary duty, and unjust enrichment.
See Am. Compl. at ¶¶ 19-34.[3] Mr. Clark filed
his answer on February 13, 2006, denying liability on all
counts and including his demand for a jury
trial.[4] On July 14, 2006, Mr. Clark moved to stay
the case, invoking his Fifth Amendment privilege against
self-incrimination in light of a parallel criminal
investigation and grand jury proceedings. See Mot.
to Stay at 1-2. In his motion to stay, Mr. Clark also
asserted that the criminal investigation was interfering with
his discovery rights in the instant case. See id. at
4; Reply to Mot. to Stay at 1-2. CUMIS opposed the motion to
stay. See Opp'n to Mot. to Stay. On August 22,
2006, the Court granted Mr. Clark's motion and entered
the first of two stays in the case. See Order [Dkt.
No. 44] (Aug. 22, 2006). On June 27, 2007, CUMIS moved to
lift the stay in light of the fact that no criminal charges
had been brought and all requested discovery materials had
been made available to Mr. Clark. See Mot. to Lift;
Reply to Mot. to Lift. On July 18, 2007, the Court issued a
minute order granting this motion and lifting the stay.
Thereafter, on November 8, 2007, CUMIS filed a motion for
summary judgment, and on September 18, 2009, Mr. Clark filed
a motion to dismiss.[5] The parties thereafter filed responsive
briefs opposing and supporting their respective motions.
On
December 15, 2009, Mr. Clark again moved to stay the
proceedings. In light of an ongoing grand jury investigation,
the Court issued a minute order on January 25, 2010, granting
the motion to stay. Mr. Clark was subsequently indicted and
then convicted of three counts of bank fraud (in violation of
18 U.S.C. § 1344), two counts of wire fraud (in
violation of 18 U.S.C. § 1343), and two counts of
creating a false entry in federal credit institution records
(in violation of 18 U.S.C. § 1006). See Suppl.
Mot. for Summ. J. Ex. E; Suppl. Mot. for Summ. J. Ex. F.
Following Mr. Clark's conviction, Judge Reggie B. Walton
sentenced him to sixty-three months of imprisonment, to be
followed by a term of supervised release, and required him to
pay restitution in the amounts of $140, 000 to Hoya and $79,
286.41 to CUMIS, a total of $219, 286.41. See Suppl.
Mot. for Summ. J. Ex. F. Mr. Clark appealed his conviction
and sentence, and the United States Court of Appeals for the
District of Columbia Circuit affirmed his conviction and
restitution obligation, but remanded the case for
resentencing. See United States v. Clark, 747 F.3d
890, 897 (D.C. Cir. 2014). On remand, Judge Walton reduced
Mr. Clark's term of imprisonment, but the restitution
amounts remained unchanged. See Suppl. Mot. for
Summ. J. Ex. G. There are no longer any pending appeals in
the criminal case, and that judgment is final.
On
February 1, 2017, CUMIS filed a motion to lift the stay.
After a status conference, the Court issued a minute order on
April 3, 2017, granting CUMIS's motion to lift the stay.
The Court also issued a separate order permitting the parties
to supplement their unresolved dispositive motions.
See Order [Dkt. No. 162] (Mar. 23, 2017). On May 26,
2017, CUMIS filed a revised memorandum in support of its
motion for summary judgment, and on May 30, 2017, Mr. Clark
filed a supplemental motion to dismiss. The parties
thereafter filed responsive briefs opposing and supporting
their respective motions.
II.
MOTION TO DISMISS
In his
motion to dismiss, Mr. Clark asks the Court to dismiss
CUMIS's complaint on grounds that the Court lacks subject
matter jurisdiction under Rule 12(b)(1) of the Federal Rules
of Civil Procedure. He also asserts that CUMIS has failed to
state a claim upon which relief can be granted and failed to
plead fraud with the requisite particularity, warranting
dismissal under Rule 12(b)(6) of the Federal Rules of Civil
Procedure. Finally, Mr. Clark requests dismissal as a
discovery sanction.
A.
Dismissal for Lack of Subject Matter Jurisdiction Under Rule
12(b)(1)
1.
Legal Standard
Federal
courts are courts of limited jurisdiction, possessing only
those powers authorized by the Constitution and an act of
Congress. See, e.g., Janko v.
Gates, 741 F.3d 136, 139 (D.C. Cir. 2014);
Beethoven.com LLC v. Librarian of Cong., 394 F.3d
939, 945 (D.C. Cir. 2005); Abulhawa v. U.S. Dep't of
the Treasury, 239 F.Supp.3d 24, 30 (D.D.C. 2017). On a
motion to dismiss for lack of subject matter jurisdiction,
the plaintiff bears the burden of establishing that the Court
has jurisdiction. See Walen v. United States, 246
F.Supp.3d 449, 452 (D.D.C. 2017); Tabman v. FBI, 718
F.Supp.2d 98, 100 (D.D.C. 2010). In determining whether to
grant a motion to dismiss, however, the Court must construe
the complaint in the plaintiff's favor and treat all
well-pleaded factual allegations as true. See Attias v.
Carefirst, Inc., 865 F.3d 620, 627 (D.C. Cir. 2017);
Walen v. United States, 246 F.Supp.3d at 452-53. And
in determining whether a plaintiff has met the burden of
establishing jurisdiction, this Court may consider materials
beyond the pleadings where appropriate. See Walen v.
United States, 246 F.Supp.3d at 453 (citing Am.
Nat'l Ins. Co. v. FDIC, 642 F.3d 1137, 1139 (D.C.
Cir. 2011)); Tabman v. FBI, 718 F.Supp.2d at 100
(citing Scolaro v. D.C. Bd. of Elections &
Ethics, 104 F.Supp.2d 18, 22 (D.D.C. 2000)).
Under
28 U.S.C. § 1332, this Court has subject matter
jurisdiction over a dispute between citizens of different
states where the amount in controversy exceeds $75, 000,
computed without regard to any setoff or counterclaim to
which the defendant may be adjudged to be entitled and
exclusive of interest and costs. When the court considers
whether a claim exceeds the $75, 000 amount-in-controversy
requirement, “the plaintiff's amount-in-controversy
allegation is accepted if made in good faith.” See
Dart Cherokee Basin Operating Co. v. Owens, 135 S.Ct.
547, 553 (2014). Dismissal is justified only if it
“appear[s] to a legal certainty that the claim is
really for less than the jurisdictional amount.”
See Bronner v. Duggan, 249 F.Supp.3d 27, 37 (D.D.C.
2017) (quoting St. Paul Mercury Indem. Co. v. Red Cab
Co., 303 U.S. 283, 289 (1938)). In short, “the
Supreme Court's yardstick demands that courts be very
confident that a party cannot recover the jurisdictional
amount before dismissing the case for want of
jurisdiction.” See Rosenboro v. Kim, 994 F.2d
13, 17 (D.C. Cir. 1993).
2.
Analysis
Mr.
Clark argues that CUMIS has failed to satisfy the requisite
$75, 000 amount in controversy to establish diversity
jurisdiction. See Suppl. Mot. to Dismiss at 4. Mr.
Clark acknowledges that the amount stated in the complaint
controls if made in good faith, but he asserts that this is
“[n]ot the case here.” See id. at 4.
Although Mr. Clark does not offer any evidence affirmatively
indicating bad faith, he argues that CUMIS has not provided
sufficient factual support for its asserted demand. See
id. at 2-3. And CUMIS is not entitled to recover the
amount claimed, Mr. Clark argues, because “CUMIS is now
seeking [what] has already been awarded to the plaintiff in a
criminal Restitution Order . . . .” See id. at
4.
It
appears to the Court that, although Mr. Clark challenges the
total damages amount alleged by CUMIS, he has not proffered
any reason to think the amount in controversy is less than
$75, 000. While it is not clear from the amended complaint
precisely how CUMIS calculated the exact amount of damages
now sought, this is a matter to be proven by a preponderance
of the evidence at trial. At the motion to dismiss stage,
even a “cursory” allegation of the amount in
controversy can be sufficient. See Bronner v.
Duggan, 249 F.Supp.3d at 37 (citations omitted). CUMIS
has alleged damages totaling $540, 196.14, an amount
well-above the jurisdictional amount of $75, 000. This total
amount, CUMIS asserts, encompasses those harms accounted for
in the criminal restitution order, as well as additional
harms stemming from Mr. Clark's fraudulent conduct.
See Opp'n to Suppl. Mot. to Dismiss at 2-3. And
the criminal restitution order does not categorically bar
CUMIS from seeking civil damages. See Kiwanuka v.
Bakilana, 844 F.Supp.2d 107, 116 (D.D.C. 2012)
(“It is well established that an order of restitution
does not bar subsequent civil suits; at most, it may offset
any future recovery of compensatory damages for the same
loss.”); cf. 18 U.S.C. § 3664(j)(2)
(“Any amount paid to a victim under an order of
restitution shall be reduced by any amount later recovered as
compensatory damages for the same loss by the
victim.”).
Although
CUMIS has not definitively demonstrated its entitlement to
the $540, 196.14 amount in civil damages it seeks, see
infra Part III, CUMIS is not required to do so in order
to survive a motion to dismiss. Because the amount in
controversy alleged by CUMIS is well above the jurisdictional
requirement and does not appear to have been asserted in bad
faith, the Court will deny Mr. Clark's motion to dismiss
the amended complaint for lack of subject matter jurisdiction
under Rule 12(b)(1). See Rosenboro v. Kim, 994 F.2d
at 17; Bronner v. Duggan, 249 F.Supp.3d at 38.
B.
Dismissal for Failure to State a Claim Under Rule
12(b)(6)
1.
Legal Standard
Rule
12(b)(6) of the Federal Rules of Civil Procedure allows
dismissal of a complaint if a plaintiff fails “to state
a claim upon which relief can be granted.” See
Fed.R.Civ.P. 12(b)(6). Generally, under Rule 8 of the Federal
Rules of Civil Procedure, a plaintiff need only provide
“a short and plain statement of the claim showing that
the pleader is entitled to relief” that “give[s]
the defendant fair notice of what the . . . claim is and the
grounds upon which it rests.” SeeBell
Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting
Conley v. Gibson, 355 U.S. 41, 47 (1957)). Although
“detailed factual allegations” are not necessary
to withstand a Rule 12(b)(6) motion to dismiss, the complaint
“must contain sufficient factual matter, accepted as
true, ‘to state a claim to relief that is plausible on
its face.'” SeeAshcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. at 555, 570); see also
Henok v. Kessler, 78 F.Supp.3d 452, 457 (D.D.C. 2015).
“A claim has facial plausibility ...