Busby v. Capital One, N.A.
772 F. Supp. 2d 268
D.D.C.2011Background
- Busby, pro se, sues Capital One, N.A. and Prensky over a 1996 note and deed of trust secured by her D.C. home.
- Capital One allegedly acted as loan servicer and, via a Deed of Appointment, as trustee in foreclosure proceedings.
- Notice of foreclosure (April 12, 2010) claimed Capital One held the note and set a May 19, 2010 sale date.
- Amended complaint asserts fraud, breach of fiduciary duty (against Prensky), CPPA, usury, conversion, and RICO-related theories.
- Defendants move to dismiss under Rule 12(b)(6); district court grants dismissal of most counts, leaving only breach of fiduciary duty against Prensky pending.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Fraud claim viability | Busby alleges misrepresentations about note ownership and foreclosure authority. | Capital One and Prensky contend no detrimental reliance or plausible fraud claim. | Fraud claim dismissed for lack of detrimental reliance and plausible facts. |
| D.C. Usury Statute claim viability | Capital One acted as lender and violated usury by misrepresenting terms. | Statute applies to lenders, not servicers; plaintiff failed to show improper charges. | Dismissed; Capital One not a lender under the statute as applied. |
| CPPA claim viability | CPPA applies to consumer transactions; alleges misrepresentation by lender. | No consumer-merchant relationship; Capital One not a lender for CPPA purposes here. | Dismissed; no consumer-merchant relationship alleged. |
| Conversion claim viability | Defendants misappropriated the Deed of Trust and Note, harming her rights. | Plaintiff had no ownership in the Deed of Trust; no dispossession shown. | Dismissed; no conversion due to lack of dispossession and ownership in the instruments. |
| RICO pattern viability | Alleges pattern of mail/wire fraud and witness tampering to foreclose improperly. | No ongoing, related, predicate acts forming a RICO pattern; single scheme to foreclose on her property. | Dismissed for lack of a pattern of racketeering activity. |
Key Cases Cited
- Fort Lincoln Civic Ass'n, Inc. v. Fort Lincoln New Town Corp., 944 A.2d 1055 (D.C. 2008) (elements of common-law fraud; reliance required for injury)
- Ashcroft v. Iqbal, 129 S. Ct. 1937 (U.S. 2009) (plausibility standard for complaint sufficiency)
- Twombly, 550 U.S. 544 (U.S. 2007) (plausibility standard; rejects mere conclusory allegations)
- Aktieselskabet AF 21. Nov. 2001 v. Fame Jeans Inc., 525 F.3d 8 (D.C. Cir. 2008) (detrimental reliance required in fraud; reliance must be plaintiff's)
- Zernik v. United States, 630 F. Supp. 2d 24 (D.D.C. 2009) (RICO pattern requires related, ongoing predicate acts)
- W. Assocs. Ltd. P'ship v. Market Square Assocs., 235 F.3d 629 (D.C. Cir. 2001) (pattern requirement for RICO)
- Hill v. Medlantic Health Care Grp., 933 A.2d 314 (D.C. 2007) (civil conspiracy requires underlying tort; not independent)