EASTERN SAVINGS BANK, FSB, Plaintiff, v. George PAPAGEORGE, et al., Defendants.
Civil Action No. 13-1147 (BAH)
United States District Court, District of Columbia.
Signed March 10, 2014
BERYL A. HOWELL, United States District Judge
Laurence Allnutt Elgin, Washington, DC, for Defendants.
MEMORANDUM OPINION
BERYL A. HOWELL, United States District Judge
This tort action, seeking over $10 million, is the tenth lawsuit filed in a dispute between the plaintiff and one or more of the four defendants (or their relatives) over a townhouse in Southeast Washington, D.C., that has been ongoing for more than a decade. The plaintiff alleges nine causes of action: (1) violation of the civil RICO statute,
I. BACKGROUND
“This case has so many chapters it makes War and Peace look like a short story. And the saga continues.” Franklin-Mason v. Mabus, 742 F.3d 1051, 1052 (D.C.Cir.2014). The fact that a dispute over what appears to be a typical home mortgage refinancing for $168,000 in 1998 has required at least three published District of Columbia Court of Appeals opinions, see E. Sav. Bank, FSB v. Pappas, 829 A.2d 953 (D.C.2003), Pappas v. E. Sav. Bank, FSB, 911 A.2d 1230 (D.C.2006), Banks v. E. Sav. Bank, 8 A.3d 1239 (D.C. 2010); three actions in this Court, see Mitchell v. E. Sav. Bank, FSB, 890 F.Supp.2d 104 (D.D.C.2012), Papageorge v. Stuckey, No. 13-650 (D.D.C.2013), and the present matter; at least three landlord/tenant proceedings in D.C. Superior Court; and at least one administrative hearing before the D.C. Department of Housing and Community Development, Rental Accommodations Division, is stunning. The Court is astounded at the amount of judicial resources consumed by this matter, and “given the wearied and stale nature of this dispute,” the Court “is loath to extend its shelf life,” Franklin-Mason, 742 F.3d at 1058, particularly since the instant case does not present any colorable claims. Nevertheless, the Court will provide “a bare-bones procedural precis,” id. at 1053, to provide context for resolution of the pending motions.
The property in question is located at 2507 33rd St. SE in Washington, D.C. (the “Property“). Compl. ¶ 9.1 In 1980, the home‘s owner, Vasiliki Pappas (“Pappas“), acquired title to the property from Aphrodite Pappas (“Aphrodite“). Id. Aphrodite died shortly after Pappas acquired the Property, leaving a number of heirs, and Pappas was “named personal representative of” Aphrodite‘s estate. Id. Pappas was removed from this position in 1986 after a District of Columbia Probate Court found her to have “committed numerous improprieties in exercising her fiduciary responsibilities as estate administrator.” Id.
Twelve years later, in 1998, Pappas defaulted on a $159,000 loan made to her by Citibank Federal Savings Bank, for which she had executed a Deed of Trust on the Property. Id. ¶ 20. The same year, the plaintiff extended a new, $168,000 loan to Pappas to settle the Citibank debt, with the Property as collateral. Id. ¶ 21. The plaintiff alleges that it was “fraudulently induc[ed]” to grant this loan based, in part, on leases the plaintiff alleges were “generated for the sole purpose of artificially inflating” Pappas’ income. Id. ¶ 22. Pappas
Soon after the plaintiff‘s foreclosure action, the parties began suing each other. The initial suits, one initiated by the plaintiff and one initiated by Aphrodite‘s heirs—none of whom are named defendants in this action, but one of whom is the mother of Defendant Papageorge, id. ¶ 19—concerned whether the plaintiff‘s lien against the Property was superior to the judgment lien obtained by Aphrodite‘s heirs. See E. Sav. Bank, FSB v. Pappas, 829 A.2d at 956; Pappas v. E. Sav. Bank, FSB, 911 A.2d at 1233. The plaintiff eventually prevailed in two D.C. Court of Appeals rulings, see id. thus ending the saga‘s first chapter.
The saga‘s next chapter began with the plaintiff‘s attempt to evict Defendants Kebede and Banks from the Property. Contemporaneously with the first two D.C. Superior Court lawsuits, the plaintiff acquired the Property at a substitute trustees’ sale. Compl. ¶ 23. After obtaining title, the plaintiff sought to evict Pappas by initiating a landlord tenant proceeding in D.C. Superior Court. Compl ¶ 40. Defendants Kebede and Banks intervened claiming right of possession to portions of the property under leases they entered into with Pappas. Id. ¶¶ 41-42. The plaintiff alleges that this legal intervention was the beginning of the defendants’ alleged RICO scheme, since the plaintiff asserts that Defendants Kebede and Banks never actually lived at the Property. See id.
The landlord/tenant court granted the plaintiff possession of the Property with carve-outs for defendants Banks and Kebede, pursuant to their leases. Compl. ¶ 44. In 2002, the plaintiff alleges that Defendants Banks and Kebede sent a letter to the plaintiff offering to vacate the property in return for a $100,000 settlement and ninety days in which to find another place to live. Id. ¶ 80. After the plaintiff apparently rejected this settlement offer, Defendant Banks sent a letter to the plaintiff demanding that the plaintiff pay Defendant Banks’ utility bill, pursuant to the terms of Defendant Banks’ lease. Id. ¶ 88.
In 2004, the landlord/tenant court ordered that Defendants Kebede and Banks were to remain undisturbed in possession of the portions of the Property described in their leases. Id. ¶ 44. Shortly after that judgment, Defendants Banks and Kebede sent the plaintiff a letter demanding that it undertake certain repairs based on the terms of their leases. Id. ¶ 89. Not satisfied with the landlord/tenant court‘s decision, the plaintiff filed a Writ of Restitution against Defendants Kebede and Banks, which was subsequently denied. Id. ¶ 146. So ended the saga‘s second chapter.
The third chapter began in 2006 when the plaintiff returned to landlord/tenant court by filing two cases against Defendants Kebede and Banks. See Compl. ¶¶ 47, 57. Meanwhile, Defendant Mitchell, a former tenant at the Property, brought the plaintiff before an administrative tribunal in the D.C. Department of Housing and Community Development‘s Rental Accommodations Divisions, claiming retaliatory eviction and improper registration of a rental property, amongst other claims. Id. ¶ 71. These three actions resulted in numerous depositions which, the plaintiff claims, furthered the defendants’ RICO scheme, since the deponents allegedly provided false and/or evasive answers. See id. ¶¶ 52, 59. The plaintiff eventually obtained
Shortly thereafter, in 2012, Defendant Mitchell instituted another legal proceeding against the plaintiff claiming, inter alia, unlawful eviction and breach of the implied covenant of quiet enjoyment in D.C. Superior Court, an action the plaintiff subsequently removed to this Court. Id. ¶ 75. After having its motion to dismiss partially denied in that suit, see Mitchell v. E. Sav. Bank, 890 F.Supp.2d at 105, the plaintiff settled all outstanding claims with Defendant Mitchell on February 4, 2013, Compl. ¶ 77. It was during this litigation that the plaintiff alleges it learned that “Mitchell was never a tenant” at the Property and that Papageorge was allegedly the moving force behind the litigation. Id. ¶ 78. The plaintiff does not explain how or when it came to know this information. See id.
Chapter four of this saga revolves around the plaintiff‘s attempts to sell the Property to Boyle and Afomia Stuckey in a transaction that closed on January 2, 2013. Id. ¶ 92. Immediately after the sale, and just before the plaintiff settled with Defendant Mitchell, Defendants Mitchell and Papageorge, the latter exercising statutory rights purportedly assigned by Defendant Banks, sought to assert their right to purchase the Property under D.C. tenant law by sending letters requesting information to the plaintiff. Id. ¶¶ 84-86. After receiving no response, Defendant Papageorge sued the plaintiff and the new owners of the Property in District of Columbia Superior Court in March 2013, alleging violations of his statutory rights and that the new owners had committed waste to the property. Id. ¶ 93. The plaintiff removed that action to this Court, but the case was subsequently dismissed against the instant plaintiff for lack of proper service, after which the case was remanded to D.C. Superior Court, where it remains pending. See Papageorge v. Stuckey, No. 13-650, Order at 1, ECF No. 8.
This brief summary of the last thirteen years of litigation between the parties to the instant matter reveals that the plaintiff has sued the defendants, individually or in some combination thereof, five times—including the instant matter—while the defendants, individually or in some combination thereof, have sued the plaintiff four 2 times—including the pending suit in D.C. Superior Court. See generally Compl. The plaintiff has settled with Defendants Banks and Mitchell, but now asks this Court to unwind those settlements because the plaintiff alleges it was fraudulently induced into making those agreements. See id. All of the plaintiff‘s causes of action are based on actions that took place in the course of, or associated with, these nine legal proceedings. Id. The defendants have moved to dismiss under
The Federal Rules of Civil Procedure require that a complaint contain “‘a short and plain statement of the claim showing that the pleader is entitled to relief,’ in order to ‘give the defendant fair notice of what the ... claim is and the grounds upon which it rests[.]‘” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957));
III. DISCUSSION
The plaintiff‘s frustration with the ongoing litigation over the Property is palpable in its complaint, but none of the causes of action raised, which are entirely based on the past thirteen years of litigation, present a cognizable claim. Each claim is considered, and dismissed, below.
A. RICO (Counts 1 and 2)
“RICO authorizes civil suits by any person injured in his business or property by reason of a violation of
A “pattern of racketeering” activity requires the commission, within a 10-year period, of at least two related predicate acts punishable under certain enumerated criminal statutes.
Here, the RICO claim fails because the plaintiff has not plead sufficiently a pattern of racketeering activity nor individual predicate acts, and cannot establish the requisite causation between the predicate acts alleged and the plaintiff‘s asserted injury.
The complaint alleges that the defendants committed the predicate acts of extortion,
At the outset, even assuming the acts pleaded by the plaintiff constitute the requisite predicate acts for RICO purposes—which they do not, see infra—the plaintiffs have failed to plead that the defendants have engaged in a “pattern of racketeering activity.” In Edmondson, the D.C. Circuit noted that among the factors courts should consider when evaluating whether the plaintiff has established such a pattern are “the number of unlawful acts, the length of time over which the acts were committed, the similarity of the acts, the number of victims, the number of perpetrators, and the character of the unlawful activity.” 48 F.3d 1260, 1265 (quoting Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1411-13 (3d Cir.1991)). The Edmondson court noted that when defendants are accused of engaging in “a single scheme, single injury, and few victims,” then it is “virtually impossible for plaintiffs to state a RICO claim.” Id.
The plaintiff in the instant matter has pleaded a “pattern” consisting of a single scheme (to wrest control of the Property from the plaintiff); a single injury
In addition, the plaintiff‘s factual allegations in support of the claimed predicate criminal acts are insufficient. With respect to the predicate acts of extortion, the plaintiff appears to contend that the defendants’ litigation strategies have “created a reasonable fear of harm on the part of [the plaintiff], including fear of economic loss.” Compl. ¶ 115. Abusive or sham litigation does not constitute a RICO predicate act. Bixler v. Foster, 596 F.3d 751, 758 (10th Cir.2010); Deck v. Engineered Laminates, 349 F.3d 1253, 1257-58 (10th Cir.2003); United States v. Pendergraft, 297 F.3d 1198, 1208 (11th Cir.2002); Vemco, Inc. v. Camardella, 23 F.3d 129, 134 (6th Cir.1994); First Pac. Bancorp v. Bro, 847 F.2d 542, 547 (9th Cir.1988); I.S. Joseph Co., Inc. v. J Lauritzen A/S, 751 F.2d 265, 267-68 (8th Cir.1984); Dias v. Bogins, 134 F.3d 361, 1998 WL 13089, at * 1 (1st Cir.1998); G-I Holdings, Inc. v. Baron & Budd, 179 F.Supp.2d 233, 259 (S.D.N.Y.2001); Grauberger v. St. Francis Hosp., 169 F.Supp.2d 1172, 1178 (N.D.Cal. 2001). But see Hall Am. Ctr. Assocs. Ltd. P‘ship v. Dick (“Hall“), 726 F.Supp. 1083, 1093-97 (E.D.Mich.1989).
In the civil context, recognizing litigation as a form of extortion would “transform[] a state common-law action into a federal crime.” Pendergraft, 297 F.3d at 1207-08; see also J. Lauritzen A/S, 751 F.2d at 267 (holding that groundless, bad-faith threats to sue “may be tortious under state law” but “declin[ing] to expand the federal extortion statute to make it a crime“). Carried to its logical conclusion, recognition of litigation related activity as a predicate for RICO violations “would subject almost any unsuccessful lawsuit to a colorable extortion (and often a RICO) claim.” Deck, 349 F.3d at 1258. Thus, the vast majority of the plaintiff‘s litany of woes delineated in the complaint cannot, as a matter of law, form the basis of a RICO complaint, since they are all directly related to ongoing, non-frivolous
The plaintiff supports it claim that the defendants’ engaged in predicate acts of mail and bank fraud by describing various letters sent by some of the defendants seeking repairs of the Property.5 See generally Compl. ¶¶ 79-90, 121-123. Considering the high bar for plaintiffs to plead RICO violations in this Circuit and the explicit caution by the D.C. Circuit in Western Associates that “RICO claims premised on mail or wire fraud,” as is the case here, “must be particularly scrutinized because of the relative ease with which a plaintiff may mold a RICO pattern from allegations that, upon closer scrutiny, do not support it,” 235 F.3d at 637, the plaintiff has fallen far short of establishing a RICO claim. The plaintiff has not stated, nor even implied, that the claims made in the letters regarding the lack of toilets, heat, lights, or water in certain areas of the Property were untrue or how those letters meet the standard for mail fraud. See Compl. ¶ 69. The plaintiff has offered no details at all as to what actions were taken by the defendants to constitute bank fraud. See generally Compl.
The plaintiff‘s RICO claim based on bribery also must fail. First, the plaintiff cites
The plaintiff‘s claims pertaining to the alleged agreement, dated December 10, 2010, between Defendants Papageorge, Banks, and Mitchell similarly fail, since that agreement does not, on its face, include or imply the content of any testimony Defendants Banks or Mitchell might give, nor how the alleged agreement constitutes “corruptly giv[ing] ... anything of value.” Id. (emphasis added); see Compl.
The plaintiff does not plead any factual basis to support a witness bribery charge, since the plaintiff does not explain what testimony was obtained, what item of value was exchanged, or what promises were made. See generally Compl. For substantially the same reasons, the plaintiff‘s witness tampering claims must also fail, since the plaintiff has not alleged that any defendant killed, threatened, corruptly persuaded, intimidated, or intentionally harassed a witness. See
Additionally, the plaintiff has failed to plead a RICO injury because the injuries the plaintiff complains of were not directly caused by the predicate acts alleged. The Supreme Court has made clear that in order to plead a RICO injury, the injury alleged must involve a “direct causal connection between the predicate offense and the alleged harm.” Hemi Group, 559 U.S. at 10-11. Where the set of actions alleged to have caused the harm to the plaintiff was “entirely distinct from the alleged RICO violation,” the Court held that the injury was too attenuated to state a RICO claim. Id. at 10 (quoting Anza v. Ideal Steel Supply Corp., 547 U.S. 451, 458 (2006)). Here, the plaintiff‘s claimed injuries boil down to economic and reputational harm stemming from the allegedly baseless lawsuits between the instant parties. See Compl. ¶¶ 112-15. The reputational harm allegedly suffered by the plaintiff as a consequence of the defendants’ various lawsuits is not sufficiently tied to an ascertainable, calculable value or sufficiently tied to the defendants’ alleged predicate acts to satisfy the proximate causation standard. See State Farm Mut. Auto. Ins. Co. v. CPT Med. Servs., P.C., 375 F.Supp.2d 141, 152 (E.D.N.Y.2005) (“In other words, a plaintiff must show that its injury is to its property, and not, for example, physical, emotional or reputational harm, and that plaintiff‘s injury is proximately caused by the acts constituting the RICO violation.“) (internal quotation marks omitted). Furthermore, the alleged economic damages arose from the plaintiff‘s expenditure of funds in pursuing or defending litigation with the defendants. See Compl. ¶¶ 112-15. This is exactly the type of injury barred by Hemi and Anza, since the injury—expending funds on litigation—is wholly removed from the alleged predicate acts—extortion, witness tampering, and witness bribery. Thus, the lack of causation is another fatal flaw in the plaintiff‘s RICO claim.
The dismissal of Count 1 also results in dismissal of Count 2 alleging a conspiracy to violate RICO.
B. Fraud (Count 3)
The plaintiff‘s fraud claim in Count 3 is based on representations made in the course of the ongoing litigation between the parties. See Compl. ¶¶ 137-43. To withstand a motion to dismiss for failure to state a claim, a fraud claim must meet the standard set out in
The plaintiff must show the following elements for a viable fraud claim: “(1) a false representation, (2) in reference to a material fact, (3) made with knowledge of its falsity, (4) with the intent to deceive, and (5) action ... taken in reliance upon the representation.” Lee, 874 F.Supp.2d at 6 (quoting Bennett, 377 A.2d at 59); McCarthy v. Cahill, 249 F.Supp. 194, 196 (D.D.C.1966). Thus, a plaintiff “must allege with particularity matters such as the time, location and content of the alleged misrepresentations ... [and] misrepresented facts.” Id. It is simply not enough to allege that certain statements or actions were fraudulent without also providing specific information to support the conclusion. The plaintiff has failed to do so here because it has failed to allege with particularity the facts upon which its conclusory allegations of fraudulent misstatements are based.
The plaintiff‘s complaint is replete with the phrase “on information and belief” when describing the alleged misrepresentations made by the defendants. See, e.g., Compl. ¶¶ 22, 29, 31, 37. The D.C. Circuit has cautioned that
Moreover, the plaintiff‘s claims are at odds with the plaintiff‘s arguments made in other actions before the courts of the District of Columbia and this Court. In Mitchell v. Eastern Savings Bank, FSB, Defendant Mitchell claimed, and the plaintiff did not apparently dispute, that the plaintiff “evicted Mitchell by removing his personal belongings from the Property and changing the locks on the doors to permanently bar [Mitchell‘s] entry.” 890 F.Supp.2d at 105-06. Although the plaintiff pleads in this case that Defendant Mitchell falsely asserted that he had “been living at [the Property] since 1999,” Compl. ¶ 72, in Mitchell the plaintiff argued that Defendant Mitchell was living at the Property, became an at-will tenant when the plaintiff foreclosed on the Property, unlawfully assigned his lease to Defendant Banks when he switched rooms with Defendant Banks, and “thereby became a squatter with no right to any form of notice regarding the eviction,” Mitchell, 890 F.Supp.2d at 106. These arguments, and the District Court‘s findings in Mitchell, are, at best, difficult to reconcile with the plaintiff‘s current arguments that neither Defendant Banks nor Defendant Mitchell ever “were legitimate occupants of the Property.” See Compl. ¶ 39.6
Indeed, the plaintiff‘s complaint boils down to a list of statements made by the defendants over the last thirteen years that the plaintiff believes—for some reason that is not set forth in the complaint or in its briefing—are untrue. Without any factual basis for why the plaintiff so believes, the plaintiff has failed to plead fraud with the requisite specificity. Instead, this complaint appears to be the type of claim specifically warned against in Kowal, namely, one that is a “pretext for the discovery of unknown wrongs.” Kowal, 16 F.3d at 1279 n. 3. Although a court must take the facts in a complaint as true for the purposes of a motion to dismiss, it need not take conclusory allegations totally divorced from the factual basis for those allegations as true, especially in the context of the heightened pleading standard for fraud under
Moreover, the plaintiff has failed to plead the necessary element of
The only action the plaintiff asserts it took in reliance on the allegedly fraudulent statements made by the defendants was to expend money on litigation. See Compl. ¶ 141 (stating plaintiff expended “attorneys’ fees and costs to defend itself“). “[I]t is far from clear that the cost of legal services can constitute detrimental reliance for purposes for fraud, given the American Rule against fee shifting.” Busby, 772 F.Supp.2d at 276; see also Sloan v. Urban Title Servs., Inc., 689 F.Supp.2d 94, 121 (D.D.C.2010) (holding party asserting fraud “must provide legal authority in support of his apparent claim that he is entitled to attorneys’ fees and costs and that this alone is sufficient proof of damages to sustain his claim for fraud and misrepresentation.“). This is particularly true where, as here, the plaintiff has had thirteen years in which to use the discovery tools and other safeguards in the adversarial process to uncover any fraud by the defendants. The plaintiff‘s attempt now to recover those funds based on “fraud” is not a valid claim for detrimental reliance and is independently fatal to the plaintiff‘s fraud claim.
Since the plaintiff has failed to plead fraud with the requisite particularity, Count 3 is dismissed.
C. Intentional Interference with Contract (Counts 4 and 5) and Abuse of Process (Count 8)
Under D.C. law, to prove tortious interference with contract, the plaintiff must establish (1) the existence of a contract, (2) defendant‘s knowledge of the contract, (3) defendant‘s intentional procurement of the contract‘s breach, and (4) damages resulting from the breach. Patton Boggs LLP v. Chevron Corp., 683 F.3d 397, 403 (D.C.Cir.2012); Modis, Inc. v. InfoTran Systems, Inc., 893 F.Supp.2d 237, 241 (D.D.C.2012). Moreover, a defendant‘s interference “must be improper.” Bowhead Info. Tech. Serv. LLC v. Catapult Tech. Ltd., 377 F.Supp.2d 166, 174 (D.D.C.2005). In the instant matter, the improper means the plaintiff alleges were used by the defendants pertained to the conduct of litigation. See Compl. ¶¶ 144-59. Although “litigation and the threat of litigation are powerful weapons,” the filing of litigation is only “wrongful if the actor has no belief in the merit of the litigation or if, though having some belief in its merit, he nevertheless institutes or threatens to institute the litigation in bad faith.” RESTATEMENT (SECOND) OF TORTS § 767 cmt. c; see Armstrong v. Thompson, 80 A.3d 177, 191 (D.C.2013) (noting § 767 has been adopted in the District of Columbia); Onyeoziri v. Spivok, 44 A.3d 279, 291 (D.C.2012) (same).
“To establish abuse of process, a plaintiff must show a perversion of the judicial process and achievement of some
Under the Noerr-Pennington doctrine, the First Amendment generally immunizes the filing of good-faith lawsuits from liability. Whelan v. Abell (Whelan II), 48 F.3d 1247, 1253 (D.C.Cir.1995); Nader, 555 F.Supp.2d at 156-57. The exception to this general rule is if the litigation in question is “sham litigation.” Whelan II, 48 F.3d at 1253 (citing Prof‘l Real Estate Investors v. Columbia Pictures Indus., Inc. (“Columbia Pictures“), 508 U.S. 49 (1993)); Nader, 555 F.Supp.2d at 157. Litigation is a “sham” if it meets a two-pronged test set out by the Supreme Court: First, “the lawsuit must be objectively baseless in the sense that no reasonable litigant could realistically expect success on the merits;” and second, the litigant‘s subjective motivation must “conceal[] an attempt to interfere directly with the business relationships of a competitor ... through the use [of] the governmental process—as opposed to the outcome of that process—as an anticompetitive weapon.” Columbia Pictures, 508 U.S. at 60-61 (emphasis in original). Thus, to fall within the exception to the Noerr-Pennington doctrine, a lawsuit “must be a sham both objectively and subjectively.” BE & K Constr. Co. v. NLRB, 536 U.S. 516, 526 (2002) (emphasis in original). The second prong of this test need only be considered if the challenged litigation is found to be objectively meritless under the first prong. Columbia Pictures, 508 U.S. at 60. The plaintiff bears the burden of establishing that the sham exception applies. Nader, 555 F.Supp.2d at 157 (citing Fed. Prescription Serv., Inc. v. Am. Pharm. Ass‘n, 663 F.2d 253, 262-63 (D.C.Cir.1981)). This Circuit has extended Noerr-Pennington immunity from its original antitrust context to common law torts, including intentional interference with contract and abuse of process. Nader, 555 F.Supp.2d at 157; Whelan II, 48 F.3d at 1254 (discussing the limits imposed by the First Amendment on common law claims). Other circuits have followed suit. See Braintree Lab., Inc. v. Schwarz Pharm., Inc., 568 F.Supp.2d 487, 494-95 (D.Del.2008) (citing Third and Fourth Circuit cases).
Here, the plaintiff‘s claims for intentional interference with contract and for abuse of process are predicated upon an assertion that the defendants’ litigation against the plaintiff which led to the settlements constitutes “sham litigation.” See Compl. ¶¶ 144-59, 174-80. The plaintiff‘s claims must fail, since the plaintiff has not established that the defendants’ suits were “objectively baseless.” Indeed, Defendant Banks succeeded in obtaining a D.C. Court of Appeals decision overturning a judgment
The counts predicated on these allegations of sham litigation, for intentional interference with contract and abuse of process, must fail.
D. Trespass to Chattels (Count 6)
A defendant commits a trespass to a chattel by “intentionally (a) dispossessing another of the chattel, or (b) using or intermeddling with a chattel in the possession of another.” Hornbeck Offshore Transp., LLC v. United States, 563 F.Supp.2d 205, 212 n. 8 (D.D.C.2008) (citing Pearson v. Dodd, 410 F.2d 701, 707 n. 30 (D.C.Cir.1969)). The definition of chattel includes real or personal property; money is excluded. See BLACK‘S LAW DICTIONARY (9th ed.2009) (defining “chattel” as movable or transferable property and noting “[t]hat money is not to be accounted Goods, or Chattels, because it is not of itself valuable ... Chattels are either personal or real.” (quoting THOMAS BLOUNT, NOMO-LEXICON: A LAW-DICTIONARY (1670))). The plaintiff‘s claim for trespass to chattels is based on the allegation that the defendants “interfered and intermeddled with [the plaintiff‘s] use and enjoyment of its funds that were intended for [the plaintiff‘s] business purposes and with [the plaintiff‘s] business reputation and goodwill.” Compl. ¶ 161 (emphasis added). In other words, the plaintiff grounds this claim on interference with the use of its funds or its intangible reputation, neither of which are “chattels.” Since the plaintiff has not identified a “chattel” that was trespassed upon,8 this cause of action fails.
Recovery for unjust enrichment requires a showing that “‘a person retains a benefit ... which in justice and equity belongs to another.‘” United States ex rel. Modern Elec., Inc. v. Ideal Elec. Sec. Co., Inc., 81 F.3d 240, 247 (D.C.Cir.1996) (quoting 4934, Inc. v. Dep‘t of Emp‘t Servs., 605 A.2d 50, 55 (D.C.1992)). The existence of a valid contract, however, including a settlement agreement, precludes a plaintiff from pleading a cause of action for unjust enrichment. See Millennium Square Residential Assoc. v. 2200 M St. LLC, 952 F.Supp.2d 234, 251 (D.D.C.2013); Sununu v. Philippine Airlines, Inc., 638 F.Supp.2d 35, 40 (D.D.C.2009); Bloomgarden v. Coyer, 479 F.2d 201, 210 (D.C.Cir.1973); see also Emerine v. Yancey, 680 A.2d 1380, 1384 (D.C.1996) (holding that “where the parties have a contract governing an aspect of the relation between themselves, a court will not displace the terms of that contract and impose some other duty not chosen by the parties“).
Here, the unjust enrichment to the defendants identified by the plaintiff consists of the “settlement agreements reached as a result of the stream of spurious and baseless lawsuits comprising the Property Litigation.” Compl. ¶ 170. Putting aside the plaintiff‘s characterization of the defendants’ lawsuits as “spurious and baseless,” since they enjoyed some success, see Part III.C supra, the undisputed fact is that the plaintiff voluntarily entered into the settlement agreements with both Defendant Banks and Defendant Mitchell. Compl. ¶¶ 70, 77. Indeed, the plaintiff asserts that it allegedly learned that Defendant “Mitchell was never a tenant of [Pappas]” in the course of “the Mitchell District Court Litigation,” id. ¶ 78, yet the plaintiff still settled with Defendant Mitchell after the district court partially denied the plaintiff‘s motion to dismiss in that suit, see id. ¶¶ 75-77.
As for the settlement with Defendant Banks, as stated supra, the plaintiff has not adequately pleaded the factual basis for its assertion that Defendant Banks was not a tenant at the Property and, in any event, such a pleading would fly in the face of the District of Columbia Court of Appeals’ explicit finding that “Banks became a tenant of the basement unit of [the Property] on January 1, 1999.” Banks v. E. Sav. Bank, 8 A.3d at 1241. Since the plaintiff has not pleaded with the requisite specificity that Defendants Banks or Mitchell engaged in fraud or other tortious conduct and, regarding Defendant Mitchell, apparently settled with Defendant Mitchell after learning of these alleged falsehoods, the plaintiff‘s unjust enrichment claim must fail.
F. Conspiracy to Defraud (Count 9)
The plaintiff‘s conspiracy to defraud claim is based on the allegation that the “Defendants have committed torts against [the plaintiff], including acts of racketeering giving rise to violations of RICO, fraud, interference with contract, trespass to chattels, abuse of process, and unjust enrichment.” Compl. ¶ 182. As noted supra, all of those claims are dismissed. The conspiracy to defraud claim therefore must also fail, because a civil conspiracy must involve “an agreement—together with an overt act—to do an unlawful act, or a lawful act in an unlawful manner.” Int‘l Underwriters, Inc. v. Boyle, 365 A.2d 779, 784 (D.C.1976) (quoting Edwards v. James Stewart & Co., 160 F.2d 935, 937 (D.C.Cir.1947)); see also Venture Holdings Ltd. v. Carr, 673 A.2d 686, 692 n. 11 (D.C.1996); Furash & Co. v. McClave, 130 F.Supp.2d 48, 54 (D.D.C.2001). Since the plaintiff has not sufficiently pleaded any unlawful act by the defendants, nor any lawful act committed by the defendants in an unlawful manner, Count 9 is dismissed.
G. Dismissal With Prejudice
In this Circuit, dismissals with prejudice under
IV. CONCLUSION
Despite today‘s Memorandum Opinion, litigation among at least some of these parties will continue, since there remains a pending case before D.C. Superior Court. See Compl. ¶ 94. Nevertheless, the chapter of the saga before this Court ends today. The defendants’ motions to dismiss under
An appropriate Order accompanies this Memorandum Opinion.
BERYL A. HOWELL
UNITED STATES DISTRICT JUDGE