Seibert v. Precision Contracting Solutions, Lp ( 2019 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
____________________________________
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MICHAEL SEIBERT, )
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Plaintiff, )
)
v. ) Civil Action No. 18-818 (RMC)
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PRECISION CONTRACTING )
SOLUTIONS, LP, et al., )
)
Defendants. )
____________________________________)
MEMORANDUM OPINION
Plaintiff Michael Seibert and his attorney, Timothy Hyland, move to dismiss
counterclaims brought by Precision Contracting Solutions, LP (PCS) and its sole owner and
partner, Derrick Sieber, against Messrs. Seibert and Hyland in connection with a construction
contract dispute. Mr. Seibert brought several tort and contract claims against PCS and Mr.
Sieber concerning a PCS construction project performed on Mr. Seibert’s residential property.
Defendants answered and counterclaimed, alleging breach of contract and fraud against Mr.
Sieber and defamation against Messrs. Seibert and Hyland. Both have moved to dismiss any
fraud and defamation counterclaims brought against them. Because the Court finds that
Defendants have failed to plead a fraud claim under D.C. law and have conceded their
defamation claims, the Court will grant Messrs. Seibert’s and Hyland’s motions to dismiss.
I. FACTS
Michael Seibert and PCS signed a contract on December 8, 2017, by which PCS
agreed to make certain upgrades to Mr. Seibert’s residential property in Washington, D.C. See
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Ex. 1, Compl., Precision Construction Contract (Contract) [Dkt. 1-1]. 1 Mr. Seibert paid for most
of the work but refused to make the last payment because the work was allegedly shoddy,
incomplete, and performed without the necessary permits. PCS initiated arbitration to collect the
unpaid balance of the Contract, and Mr. Seibert sued PCS, Derrick Sieber, and Stephen Sieber 2
on April 10, 2018, seeking a declaratory judgment that the arbitration clause is unenforceable
and raising claims of fraud in the inducement, reformation, breach of contract, and unlawful
trade practices. Mr. Seibert moved to stay the arbitration initiated by PCS and Defendants
separately moved to dismiss for lack of subject matter jurisdiction. On February 26, 2019, the
Court issued a Memorandum Opinion and Order granting Mr. Seibert’s Motion to Stay and
denying Defendants’ Motions to Dismiss. See Mem. Op. [Dkt. 35]; Order [Dkt. 36].
On March 19, 2019, PCS and Mr. Sieber filed their Answer and Counterclaim.
The Counterclaim advances three counts: Count I alleges breach of contract against Mr. Seibert;
Count II alleges common law fraud against Mr. Seibert; and Count III alleges defamation against
Mr. Seibert and Mr. Seibert’s counsel, Timothy Hyland. Mr. Seibert filed his Answer to Count I
and moved to dismiss Counts II and III on March 26, 2019. See Michael Seibert’s Corrected
Answer to Count I of the Countercl. [Dkt. 42]; Michael Seibert’s Partial Mot. to Dismiss the
Countercl. [Dkt. 41]. Mr. Hyland moved to dismiss Count III shortly thereafter. See Countercl.
Def. Timothy Hyland’s Mot. to Dismiss the Countercl. [Dkt. 43]. The matter is ripe for review. 3
1
The Contract was modified by email on January 15, 2018, to extend the completion date and
increase the contract amount. Compl. ¶ 6; see also Ex. 2, Compl., Email Regarding Contract
Modification (Modification) [Dkt. 1-2].
2
Stephen Sieber (also known as Stevie Marco) is no longer a defendant as the parties voluntarily
dismissed him on May 23, 2018. See Notice of Voluntary Dismissal [Dkt. 7].
3
See Partial Opp’n of Countercls. Precision Contracting Solutions, LP and Derrick Sieber,
Individually, to the Partial Mot. to Dismiss Their Countercl. Filed by Def. Michael Seibert
(Partial Opp’n of Countercls.) [Dkt. 44]; Reply Mem. in Supp. of Michael Seibert’s Partial Mot.
2
II. LEGAL STANDARD
A motion to dismiss for failure to state a claim pursuant to Federal Rule of Civil
Procedure 12(b)(6) challenges the adequacy of a complaint on its face. Fed. R. Civ. P. 12(b)(6).
To survive a motion to dismiss, the complaint must contain sufficient factual information,
accepted as true, to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A court
must assume the truth of all well-pleaded factual allegations and construe reasonable inferences
from those allegations in favor of the plaintiff. Sissel v. Dep’t of Health & Human Servs., 760
F.3d 1, 4 (D.C. Cir. 2014). A court need not accept inferences drawn by a plaintiff if such
inferences are not supported by facts set out in the complaint. Kowal v. MCI Commc’ns Corp.,
16 F.3d 1271, 1276 (D.C. Cir. 1994). Further, a court need not accept as true legal conclusions
set forth in a complaint. Iqbal, 556 U.S. at 678. In deciding a motion under Rule 12(b)(6), a
court may consider the facts alleged in the complaint, documents attached to the complaint as
exhibits or incorporated by reference, and matters about which the court may take judicial notice.
Abhe & Svoboda, Inc. v. Chao, 508 F.3d 1052, 1059 (D.C. Cir. 2007). The same standards
govern a motion to dismiss a counterclaim. Kevin S. Bennett Trust U/A Dated August 2, 1989 v.
Bennett, 561 F. Supp. 2d 22, 26 (D.D.C. 2008). 4
to Dismiss the Countercl. (M. Seibert’s Reply) [Dkt. 45]; Resp. of Defs. and Countercl. Pls.
Precision Contracting Solutions, LP and Derrick Sieber to the Mot. to Dismiss of Countercl. Def.
Timothy B. Hyland (Response to T. Hyland’s Mot. to Dismiss) [Dkt. 48]; Countercl. Def.
Attorney Timothy Hyland’s Reply in Supp. of Mot. to Dismiss the Countercl. (T. Hyland’s
Reply) [Dkt. 50].
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The Court has subject-matter jurisdiction over this matter under 28 U.S.C. § 1332, as the claim
arises between citizens of different states and the amount in controversy exceeds $75,000. 28
U.S.C. § 1332(a)(1). Mr. Seibert is a resident of the District of Columbia, and Derrick Sieber,
PCS’s sole partner, is a citizen of Maryland as is, therefore, PCS. See Carden v. Arkoma Assos.,
494 U.S. 185, 195-96 (1990) (finding a limited partnership is a citizen of the state or states of
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III. ANALYSIS
A. Fraud Claim
The essential elements of common law fraud under District of Columbia law are:
“(1) a false representation (2) in reference to material fact, (3) made with knowledge of its
falsity, (4) with the intent to deceive, and (5) action is taken in reliance upon the
representation.” 5 Va. Acad. of Clinical Psychologists v. Grp. Hospitalization & Med. Servs.,
Inc., 878 A.2d 1226, 1233 (D.C. 2005) (quoting Atraqchi v. GUMC Unified Billing Servs., 788
A.2d 559, 563 (D.C. 2002)).
Fraud claims are subject to a heightened pleading standard. See Fed. R. Civ. P.
9(b). “In alleging fraud . . . a party must state with particularity the circumstances constituting
fraud,” though “conditions of a person’s mind may be alleged generally.” Id. To satisfy Rule
9(b), a plaintiff must “set[ ] forth in sufficient detail the time, place, and manner” of the alleged
fraudulent scheme, so as “to guarantee all defendants sufficient information to allow for
preparation of a response.” United States ex rel. Heath v. AT&T, Inc., 791 F.3d 112, 123 (D.C.
Cir. 2015) (internal quotation marks and citation omitted). Such information often includes
“specific fraudulent statements, who made the statements, what was said, when or where these
statements were made, and how or why the alleged statements were fraudulent.” Brink v. Cont’l
Ins. Co., 787 F.3d 1120, 1127 (D.C. Cir. 2015) (citation omitted).
which its partners are citizens). Venue is proper in the District of Columbia because a
substantial part of the events at issue occurred in the District, as the home under renovation is
located in the District. See 28 U.S.C. § 1391(b)(2).
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The parties do not dispute that D.C. substantive law governs this case. Cf. TargetSmart
Holdings, LLC v. GHP Advisors, LLC, No. 19-312 (RMC), 2019 WL 4540543, at *8-11 (D.D.C.
Sept. 19, 2019) (discussing choice of law for tort claims brought in a diversity case in D.C.).
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Further, “[u]nder D.C. law, for a plaintiff to recover in tort for conduct that also
constitutes a breach of contract, ‘the tort must exist in its own right independent of the contract,
and any duty upon which the tort is based must flow from considerations other than the
contractual relationship.’” Attias v. Carefirst, Inc., 365 F. Supp. 3d 1, 18 (D.D.C. 2019) (quoting
Choharis v. State Farm Fire & Cas. Co., 961 A.2d 1080, 1089 (D.C. 2008)). “[T]he injury to
the plaintiff must be an independent injury over and above the mere disappointment of plaintiff’s
hope to receive his contracted-for benefit.” Choharis, 961 A.2d at 1089 (internal quotation
marks omitted). Therefore, the viability of Defendants’ fraud counterclaim depends on whether
Defendants have plausibly alleged sufficient facts that Plaintiff owed them an independent duty
beyond the parties’ contractual obligations.
Defendants’ fraud claim is based on allegations that, “[i]n consummating the
Contract [between PCS and Plaintiff], Plaintiff represented to [Defendants that] Plaintiff bore
full responsibility for obtaining all required permits for PCS’s work under the Contract.”
Countercl. ¶ 8. Defendants note that neither the December 2017 Contract nor its January 2018
Modification addressed the issue of permitting; rather, Defendants claim that Plaintiff orally
committed to obtain permits. 6 Defendants assert that Plaintiff “had no intention of obtaining the
required permits,” id. ¶ 39, and “never obtained the required permits” as promised. Id. ¶ 12.
Defendants further allege that in early 2018, a PCS construction superintendent
observed a D.C. Department of Consumer and Regulatory Affairs (DCRA) vehicle “stopped in
front of Plaintiff’s domicile.” Id. ¶ 14. Defendants claim that the PCS superintendent informed
6
Defendants allege that Plaintiff made this representation “[i]n consummating the Contract.” Id.
¶ 8. In the briefing on this matter, Defendants add that Plaintiff “made the representation in
question . . . at the time when he was signing the Contract in the presence of [Derrick Sieber] and
Stephen Sieber.” Partial Opp’n of Countercls. at 2.
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Plaintiff that the construction required a permit, and Plaintiff asked PCS “to obtain a permit as
soon as possible on Plaintiff’s behalf” and at Plaintiff’s expense. Id. ¶¶ 15, 45. Defendants
allege that PCS acquired the construction permits at a cost of $520.44 but Plaintiff never repaid
PCS as promised.
Defendants assert that Plaintiff’s representation that he would obtain construction
permits “was consistent with the responsibility that D.C. municipal regulations assign to the
homeowner for obtaining all required permits prior to residential construction.” Id. ¶ 38. In
support, Defendants cite Title 12A of the D.C. Municipal Regulations (DCMR), Section 105,
which governs permits. Section 105.3 states as follows:
Application for Permit. To obtain a permit, the owner or the
authorized agent (herein referred to as the applicant) shall submit to
the code official an application for permit. Where a permit is
required, it shall be obtained by applicant prior to the
commencement of any work, except as provided in Section 105.1.8.
For trade permits, the applicant shall be the contractor responsible
for the work to be done.
12A DCMR § 105.3 (2017) (emphasis omitted). 7 Defendants argue that “[s]ince the
construction contract between PCS and Seibert did not designate PCS as Seibert’s ‘authorized
agent’ for purposes of obtaining the requisite permits . . . , Seibert himself was required to apply
for and obtain the permits in question.” Partial Opp’n of Countercls. at 3 n.8 (citing Contract).
Plaintiff relies, instead, on a D.C. regulation that appears to put the responsibility
for getting permits squarely on the shoulders of Defendants, working for Mr. Seibert as a “home
improvement contractor.” Title 16 of the DCMR, Section 812.1, states that:
7
This above analysis may be superfluous since Defendants cite Title 12A, Section 105.3, in their
Partial Opposition but the Counterclaim actually references Section 105.1.3, which speaks to
“After Hours Permits.” 12A DCMR § 105.1.3 is nowhere mentioned in Defendants’ brief.
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Each home improvement contractor entering into a contract for the
performance of any home improvement work for which a permit is
required by applicable law of the District of Columbia shall be
responsible for taking such action as may be necessary to ensure that
the work is performed only under the authority of the required
permit and in accordance with all of its terms.
16 DCMR § 812.1. This regulation assigns contractors who perform home improvements the
responsibility for ensuring that the work they perform is conducted under the authority of
required permits. The Court does not opine on why D.C. has these two regulations, but it finds
that the D.C. regulation cited by Defendants does not impose an unqualified duty on
homeowners and is not “controlling” on the issue as Defendants suggest. If anything, the
specificity of 16 DCMR § 812.1 might override the more general regulation cited by Defendants.
Defendants’ historical account of the contract execution and their reliance on the
absence of language within the Contract indicate that “the duty of which [Defendants] essentially
complain[ ]”—the duty to obtain required construction permits— “necessarily arose from the[ir]
contractual relationship” with Plaintiff. See Nugent v. Unum Life Ins. Co. of Am., 752 F. Supp.
2d 46, 54 (D.D.C. 2010). Defendants do not identify, much less allege, an independent tort; they
combine the absence of language in the written agreements and an inapplicable D.C. regulation
to assert that Plaintiff had a duty to obtain permits. Because Defendants assert that any such duty
arose only from the parties’ respective contractual obligations—whether in writing or made
orally at the time of contracting—the Court will dismiss Count II of Defendants’ Counterclaim
without needing to address whether Defendants have adequately plead the other elements of
fraud.
B. Defamation Claim
In the briefing on this matter, PCS and Mr. Sieber have indicated their intention to
withdraw their defamation counterclaim against Mr. Seibert and Mr. Hyland. See Partial Opp’n
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of Countercls. at 5 (“Counterclaimants hereby withdraw Count III (Defamation) of their
Counterclaim [against Mr. Seibert.]”); Response to T. Hyland Mot. to Dismiss at 2
(“Counterclaim Plaintiffs now wish to decline the pursuit of [Count III] against Mr. Hyland in
this forum”). Defendants do not address any of the arguments presented in Messrs. Seibert’s or
Hyland’s motions to dismiss the defamation count. Defendants have therefore conceded these
motions. See Hopkins v. Women’s Div., Gen. Bd. Of Global Ministries, 284 F. Supp. 2d 15, 25
(D.D.C. 2003) (“It is well understood in this Circuit that when a plaintiff files an opposition to a
dispositive motion and addresses only certain arguments raised by the defendant, a court may
treat those arguments that the plaintiff failed to address as conceded.”). Therefore, the Court will
grant both Mr. Seibert’s and Mr. Hyland’s motions to dismiss the defamation count. 8 Because
defamation is the only claim brought against Mr. Hyland, the case against Mr. Hyland will be
dismissed in its entirety.
8
On April 18, 2019, Defendants filed a motion to modify their partial opposition to Mr. Seibert’s
motion to dismiss the defamation count. Mot. of Defs. and Countercl. Pls. Precision Contracting
Solutions, LP and Derrick Sieber, Individually, to Modify their Resp. to the Mot. to Dismiss of
Pl. and Countercl. Def. Michael Seibert [Dkt. 47]. Defendants seek to modify their partial
opposition to clearly state that they “consent[ ]” to Mr. Seibert’s motion to dismiss the
defamation count. Because Mr. Seibert’s motion to dismiss will be granted, Defendants’ motion
to modify their response will be denied as moot.
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IV. CONCLUSION
For the reasons stated, Plaintiff Michael Seibert’s Partial Motion to Dismiss
Counterclaim, Dkt. 41, will be granted, and Counterclaim Defendant Timothy Hyland’s Motion
to Dismiss, Dkt. 43, will be granted. Defendants’ Motion to Modify, Dkt. 47, will be denied as
moot. A separate Order accompanies this Memorandum Opinion.
Date: November 8, 2019
ROSEMARY M. COLLYER
United States District Judge
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