Sloan v. Urban Title Services, LLC ( 2010 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
ANDREA SLOAN, as Guardian and
Conservator on behalf of Mary Juergens, an
Incapacitated Individual, in both Mary
Juergens’ individual capacity and as the sole
member of “1230 23rd Street, LLC,” Civil Action No. 06-1524 (CKK)
Plaintiff/Counter-Defendant,
v.
URBAN TITLE SERVICES, INC., et al.,
Defendants/Counter-Plaintiffs.
MEMORANDUM OPINION
(February 12, 2010)
The above-captioned lawsuit was filed by the original Plaintiff in this matter, Mary
Juergens,1 nearly three years ago to challenge the legality of two disparate loans extended to
Plaintiff, each of which was secured by a condominium located at 1230 23rd Street, N.W.,
Apartment 505, Washington, D.C. 20037 (the “Condo”). Plaintiff initially named as Defendants
in this action Urban Title Services, Inc. (“UTS”) as well as Dale Duncan, First Mount Vernon
Industrial Loan Association, Inc. (“FMVILA”), Arthur Bennett, and Brickshire Settlements, LLC
(“Brickshire”).2 According to Plaintiff, the first of the two loans at issue in this case was
1
Subsequent to filing the instant action, Ms. Juergens was found to be an “incapacitated
individual,” and Andrea Sloan was appointed as Guardian and Conservator on behalf of Ms.
Juergens and has been substituted as Plaintiff for Ms. Juergens, in both her individual capacity
and in her capacity as the sole member of 1230 23rd Street, LLC. See Docket No. [114] at 2; see
also Fourth Am. Compl., Docket No. [120]. For convenience, the Court shall refer to Ms.
Juergens and Ms. Sloan interchangeably as “Plaintiff.”
2
Plaintiff also originally named as Defendants in this matter First Mount Vernon
Mortgage, L.L.C. (“FMVLLC”), as well as individuals William Kenney, Robert William Carney,
extended by the Owen Living Trust with the assistance of UTS, while the second loan
(hereinafter “FMV Loan”) was extended by FMVILA with the assistance of Bennett, Duncan and
Brickshire (collectively with FMVILA, the “FMV Defendants”). Plaintiff has since voluntarily
dismissed with prejudice all of her claims against UTS. See Stip. of Dismissal, Docket No.
[243]. Accordingly, the only claims that remain at issue in this lawsuit relate to the second of
these two loans, the FMV Loan.
Plaintiff and the FMV Defendants have filed a series of cross-motions for partial
summary judgment. The Court previously ruled on several of the parties’ cross-motions —
specifically, those motions for partial summary judgment filed by Plaintiff with respect to
allegations in her Fourth Amended Complaint relating to the FMV Loan and those related cross-
motions for partial summary judgment by the FMV Defendants. See Juergens v, UTS, 652 F.
Supp. 2d 51 (D.D.C. 2009). Still outstanding, however, are Plaintiff’s motion for partial
summary judgment filed with respect to Defendant Duncan’s counterclaims as well as several
motions for partial summary judgment filed by Defendant Duncan and Defendant Brickshire with
respect to certain allegations and claims asserted against them in Plaintiff’s Fourth Amended
Complaint. This Memorandum Opinion addresses Plaintiff’s remaining motion for partial
summary judgment as to Defendant Duncan’s counterclaims as well as Duncan’s motion for
and Paul Erb. Plaintiff’s claims against Defendant FMVLLC were dismissed by this Court in a
Memorandum Opinion and Order dated February 4, 2008, Juergens v. Urban Title Servs., 533 F.
Supp. 2d 64, 75 (D.D.C. 2008), and Plaintiff’s claims against the individual Defendants Kenney,
Carney, and Erb.have been voluntarily dismissed by Plaintiff, see Jt. Stip. Regarding Dismissal
of Defendants William Kenney and Paul Erb, Docket No. [112] and Stip. of Dismissal, Docket
No. [113] (dismissing without prejudice any and all claims asserted against Defendants Kenney
and Erb individually); see also Notice and Stip. of Vol. Dismissal, Docket No. [116] (dismissing
any and all claims asserted against Defendant Carney).
2
partial summary judgment, specifically: Plaintiff’s [174] Motion for Summary Judgment on the
Issue of Dale Duncan’s Counterclaim and Defendant Duncan’s [185/186] Motion for Summary
Judgment Regarding Counts XVII-XXVI and XXX-XXXI and Claims for Punitive Damages.
Upon a searching review of the memoranda filed with respect to the pending motions, the
exhibits thereto, the relevant case law and statutes, and the entire record herein, the Court orders
as follows, for the reasons set forth below. First, Duncan’s [185/186] Motion for Partial
Summary Judgment is GRANTED-IN-PART, DENIED-IN-PART, and HELD IN ABEYANCE-
IN-PART. Specifically, the motion is GRANTED insofar as Duncan argues that no attorney-
client relationship existed between himself and Plaintiff, and it is also GRANTED with respect to
Count XVII (Breach of Contract) of Plaintiff’s Fourth Amended Complaint. It is denied,
however, with respect to Counts XXV (Fraud), XXVI (Civil Conspiracy), XXXI (CPPA), and
XXXII (CCSOA) of Plaintiff’s Fourth Amended Complaint. Finally, the motion is HELD IN
ABEYANCE insofar as Duncan urges that he is entitled to summary judgment on the underlying
claims and/or Plaintiff’s punitive damages requests set forth in Counts XVIII (Legal
Malpractice), XIX (Breach of Fiduciary Duty), XX (Negligence), XXI (Breach of Contract),
XXII (Breach of Fiduciary Duty), and XXIII (Negligence), pending further briefing by the
parties.
Second, Plaintiff’s [174] Motion for Summary Judgment on the Issue of Duncan’s
Counterclaim is GRANTED-IN-PART and HELD IN ABEYANCE-IN-PART. Specifically,
Plaintiff’s motion is GRANTED with respect to Count Two of Duncan’s Counterclaim but is
HELD IN ABEYANCE with respect to Count One, pending further briefing by the parties.
3
I. BACKGROUND
A. Factual Background
The Court assumes familiarity with the factual background of this case, which is set forth
in detail in this Court previous’ opinions, see Juergens v. UTS, 652 F. Supp. 2d 51 (D.D.C.
2009); Juergens v. UTS, 246 F.R.D. 4 (D.D.C. 2007); Juergens v, UTS, 533 F. Supp. 2d 64
(D.D.C. 2008); Juergens v, UTS, 652 F. Supp. 2d 40 (D.D.C. 2009); Juergens v, UTS, 652 F.
Supp. 2d 51 (D.D.C. 2009), and the Court therefore addresses herein only such facts as are
necessary for resolution of the motions currently before the Court.
Before doing so, however, the Court pauses briefly to comment upon the parties’ attempts
to incorporate by reference various factual statements set forth in separately-filed submissions.
The Court reminds both parties that “[LCvR 7(h)(1)] places the burden on the parties and their
counsel, who are most familiar with the litigation and the record, to crystallize for the district
court the material facts and relevant portions of the record.” Jackson v. Finnegan, Henderson,
Farabow, Garrett & Dunner, 101 F.3d 145, 151 (D.C. Cir. 1996) (citing Twist v. Meese, 854
F.2d 1421, 1425 (D.C. Cir. 1988). The parties’ attempts to broadly incorporate a multitude of
unspecified facts set forth in separate filings directly contradicts both the spirit and the text of
LCvR 7(h)(1), as it impermissibly shifts counsel’s burden to locate and identify the relevant facts
and leaves the Court to guess which of the many factual statements set forth in the separate
pleadings are purportedly of relevance to the instant motions. As the Court has repeatedly
advised the parties, it strictly adheres to the text of Local Civil Rule 7(h)(1) when resolving
motions for summary judgment. See, e.g., 1/30/09 Scheduling and Procedures Order, Docket
No. [155] at 2. Accordingly, the Court shall disregard the parties’ efforts to incorporate factual
4
statements by reference. The Court advises the parties once again that it is their obligation, and
not this Court’s, to locate and cite to the appropriate portions of the record that support their
arguments on summary judgment. In order to ensure clarity of argument, the parties may not
incorporate by reference factual statements made in other pleadings, but each motion must
independently contain all facts that the party believes are relevant to resolution of the issues
raised in that particular motion.3
For this same reason, the Court also disregards Plaintiff’s consolidated statement of
material facts, which purports to relate to all summary judgment motions and cross-motions filed
by the parties and which was filed in addition to the individual statements and response
statements she provided in her briefing now before the Court. See Pl.’s [199] Stmt. of Mat.
Facts. Plaintiff did not seek prior leave of the Court to file her consolidated factual statement
and, as the Court has previously observed, the document was filed in violation of both this
Court’s orders and the local rules of this Court. See Juergens v. UTS, 652 F. Supp. 2d 51, 55-56
(D.D.C. 2009). Moreover, the consolidated statement, which appears to have been intended
principally as a means of supplementing Plaintiff’s own cross-motions for summary judgment,
does not directly respond to Duncan’s statement of material facts not in issue filed with his
motion for partial summary judgment and is therefore of no help to the Court in identifying what,
if any, material facts are purportedly in dispute with respect to that motion. Accordingly, the
Court shall — once again — disregard Plaintiff’s consolidated [199] Statement of Material Facts
3
The same is true for legal arguments. The parties may not incorporate legal arguments
made in other pleadings by reference, but must provide all relevant legal authority and argument
in the operative motion.
5
and any factual assertions set forth therein in ruling on the pending cross-motions, as well as the
Defendants’ [223] Joint Response. Cf. Juergens v. UTS, 652 F. Supp. 2d 51, 55-56 (D.D.C.
2009). As a consequence, the Court is left with only the individual statements of material fact
and response statements of genuine issues in dispute that were filed with the parties’ briefing.
Given that these statements are narrowly tailored to each individual motion, the Court at this
point provides only a short introduction to the facts of this case, with a more detailed discussion
to follow below as is necessary for evaluation of a particular claim.
The heart of Plaintiff’s lawsuit against the FMV Defendants, including Duncan, is her
allegation that the FMV Loan was intended to be, or should properly be construed as, a personal
mortgage loan — not a commercial loan. As the parties appear to agree, the relevant documents
relating to the FMV Loan, when taken at face value, purport to characterize the loan as a
$250,000 commercial loan extended by FMVILA to 1220 23rd Street, LLC (hereinafter, “LLC”),
a limited liability corporation of which Plaintiff is the sole shareholder. Plaintiff nonetheless
contends that the loan is, or should properly be construed as, a personal residential loan, based
upon two alternative theories: (1) Plaintiff claims that the FMV Defendants offered her a
personal mortgage loan, not a commercial loan, and that she signed only documents related to a
residential loan; thus, although the FMV Loan documents on their face purportedly describe the
FMV Loan as commercial in nature, such documents were fraudulently obtained by forgery, such
that the entire transaction is fraudulent, Pl.’s Fourth Am. Compl. ¶¶ 89-91; (2) alternatively,
Plaintiff alleges that, even assuming she did in fact sign the relevant loan documents purporting
to describe the FMV Loan as commercial in nature, the loan is nonetheless unlawful as it is an
illegal consumer residential loan impermissibly disguised as a commercial loan in order to avoid
6
fair lending laws and disclosure requirements, id. ¶ 92.
Not unsurprisingly, the FMV Defendants deny Plaintiff’s allegations and assert that the
FMV Loan is a valid commercial loan extended to Plaintiff’s LLC. See id. ¶¶ 94-96. The
Defendants contend that they assisted Plaintiff, at her request, in establishing the LLC; title to the
Condo was then transferred from Plaintiff to the LLC, and FMVILA extended a lawful
commercial loan for $250,000 to the LLC, which was secured by the Condo. See id. ¶ 96.
As presented by the parties, then, the key question underlying this case is whether the
FMV Loan is a legitimate commercial loan lawfully extended to the LLC or whether it is an
unlawful loan — either because the underlying documents were fraudulently forged by the FMV
Defendants or because it was unlawfully disguised by the FMV Defendants as a commercial loan
in order to avoid fair lending laws and disclosure requirements. As the Court has previously
observed, this ultimate question appears unlikely to be suitable for resolution on summary
judgment based on the record before the Court at this time. See Juergens v. UTS, 652 F. Supp.
2d 51, 58 (D.D.C. 2009). At present, the Court is presented with two very different stories
regarding the formation of the LLC and the issuance of the FMV Loan. Nonetheless, to the
extent the parties’ arguments in the instant motions do not depend upon or turn on this key
factual dispute, summary judgment on such discrete issues may be appropriate.
B. Procedural Background
Plaintiff filed her Fourth Amended Complaint in the above-captioned civil action on
October 7, 2008. See Fourth Am. Compl., Docket No. [120]. Plaintiff sets forth 25 causes of
action against the FMV Defendants in this matter stemming from the issuance of the FMV Loan.
See generally id. The FMV Defendants have each filed an Answer in response and, as is relevant
7
to the instant Memorandum Opinion, Defendant Duncan filed a Counterclaim against Plaintiff
for fraud, fraud in the inducement, misrepresentation, and negligent misrepresentation (Count I)
and abuse of process or malicious prosecution (Count II). See generally Duncan’s Ans. &
Counterclaim, Docket No. [119].
Discovery in this case is now closed, and the parties have each filed a series of motions
for partial summary judgment. The Court previously issued a Memorandum Opinion ruling on
those motions for partial summary judgment that were filed by Plaintiff with respect to
allegations in her Fourth Amended Complaint relating to the FMV Loan and those related cross-
motions for partial summary judgment by the FMV Defendants. See Juergens v. UTS, 652 F.
Supp. 2d 51 (D.D.C. 2009). As indicated above, the instant Memorandum Opinion addresses
Plaintiff’s [174] Motion for Summary Judgment on the Issue of Dale Duncan’s Counterclaim and
Defendant Duncan’s [185/186] Motion for Summary Judgment Regarding Counts XVII-XXVI
and XXX-XXXI and Claims for Punitive Damages.
Finally, the Court notes that after the parties’ cross-motions for summary judgment had
been fully briefed, Plaintiff advised the Court that she had executed a special warranty deed
selling the Condo at issue in this litigation to a third-party purchaser, and that Defendant
FMVILA had agreed to release its lien on the Condo in exchange for receiving $319,229.18 in
compensation from the sale proceeds. See [242] Status Report.
II. LEGAL STANDARD
Pursuant to Federal Rule of Civil Procedure 56, a party is entitled to summary judgment
“if the pleadings, the discovery and disclosure materials on file, and any affidavits show that
there is no genuine issue as to any material fact and that the movant is entitled to judgment as a
8
matter of law.” Fed. R. Civ. P. 56(c); see also Tao v. Freeh, 27 F.3d 635, 638 (D.C. Cir. 1994).
Under the summary judgment standard, the moving party bears the “initial responsibility of
informing the district court of the basis for [its] motion, and identifying those portions of the
pleadings, depositions, answers to interrogatories, and admissions on file, together with the
affidavits which [it] believe[s] demonstrate the absence of a genuine issue of material fact.”
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). In response, the non-moving party must “go
beyond the pleadings and by [its] own affidavits, or depositions, answers to interrogatories, and
admissions on file, ‘designate’ specific facts showing that there is a genuine issue for trial.” Id.
at 324 (internal citations omitted).
Although a court should draw all inferences from the supporting records submitted by the
nonmoving party, the mere existence of a factual dispute, by itself, is insufficient to bar summary
judgment. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). To be material, the
factual assertion must be capable of affecting the substantive outcome of the litigation; to be
genuine, the issue must be supported by sufficient admissible evidence that a reasonable trier-of-
fact could find for the nonmoving party. Laningham v. U.S. Navy, 813 F.2d 1236, 1242-43 (D.C.
Cir. 1987); Liberty Lobby, 477 U.S. at 251 (the court must determine “whether the evidence
presents a sufficient disagreement to require submission to a jury or whether it is so one-sided
that one party must prevail as a matter of law”). “If the evidence is merely colorable, or is not
sufficiently probative, summary judgment may be granted.” Liberty Lobby, 477 U.S. at 249-50
(internal citations omitted). “Mere allegations or denials in the adverse party’s pleadings are
insufficient to defeat an otherwise proper motion for summary judgment.” Williams v.
Callaghan, 938 F. Supp. 46, 49 (D.D.C. 1996). The adverse party must do more than simply
9
“show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus.
Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Instead, while the movant bears the initial
responsibility of identifying those portions of the record that demonstrate the absence of a
genuine issue of material fact, the burden shifts to the non-movant to “come forward with
‘specific facts showing that there is a genuine issue for trial.’” Id. at 587 (citing Fed. R. Civ. P.
56(e)) (emphasis in original).
III. DISCUSSION
A. Defendant Duncan’s Motion for Partial Summary Regarding Counts XVII-XXVI
and XXX-XXXI, and Claims for Punitive Damages
The Court turns first to consider Defendant Duncan’s [185/186] Motion for Summary
Judgment.4 Duncan has moved for summary judgment with respect to the following claims
4
As an initial matter, Duncan’s [185/186] motion is captioned and described throughout
the briefing as a “Motion for Summary Judgment Regarding Counts XVII-XXVI and XXX-
XXXI, and Claims for Punitive Damages.” Such a description, however, is inaccurate in several
ways. First, Duncan has not moved for summary judgment on Count XXIV of the Fourth
Amended Complaint, as that count asserts a claim for Conversion and is asserted against
FMVILA only. Second, Duncan has not moved for summary judgment with respect to Count
XXX, which is alleged only against Defendants FMVILA and Bennet and is based upon alleged
violations of the D.C. Mortgage Lender and Broker Act. Third, while not included in the
motion’s caption, Duncan has moved for summary judgment with respect to Count XXXII,
which alleges that Duncan and others violated the D.C. Consumer Credit Service Organization
Act. See Duncan’s [186-1] Mem. of Law in support of MSJ at 20-21. Fourth, Duncan has not
moved for summary judgment with respect to the merits of Count XXI of the Fourth Amended
Complaint, which alleges a claim for breach of contract against Defendant Duncan, as well as
Defendant Bennett, based upon alleged conduct related to the FMV Loan closing; Duncan’s
argument regarding Plaintiff’s breach of contract claim is explicitly limited to allegations
asserted in Count XVII of Plaintiff’s Fourth Amended Complaint, and he makes no similar
argument with respect to Count XXI. See id. at 13-14 (arguing only that “Count XVII claim for
breach of contract fails”). The Court therefore proceeds on the understanding that Duncan has
moved for summary judgment on the merits of Count XVII only and not with respect to Count
XXI as well.
In addition, the Court notes that Duncan has, throughout his motion, consistently
10
and/or allegations asserted against him in Plaintiff’s Fourth Amended Complaint:
• Counts XVII (Breach of Contract), XVIII (Legal Malpractice), XIX (Breach
of Fiduciary Duty), and XX (Negligence), which are each based upon the
same factual allegations relating to the establishment of the LLC;
• Counts XXII (Breach of Fiduciary Duty)5 and XXIII (Negligence), which are
each based upon Duncan’s alleged conduct with respect to the FMV Loan
closing;
• Count XXV (Fraud), which alleges that Duncan prepared false documents
with respect to the FMV Loan in an effort to fraudulently disguise the
transaction as a commercial loan rather than a personal consumer residential
loan;
• Count XXVI (Civil Conspiracy), which alleges that Duncan conspired with
Defendant Bennet to fraudulently disguise the FMV Loan as a commercial
loan rather than a personal consumer residential loan;
• Count XXXI (Violation of D.C. Consumer Protection Procedures Act), which
principally alleges that Duncan misrepresented and/or omitted a material fact
by fraudulently disguising the FMV Loan as a commercial loan rather than
a personal consumer residential loan and by providing a false, incomplete and
misnumbered the relevant counts of Plaintiff’s Fourth Amended Complaint. Where the error is
readily apparent, the Court has corrected such oversights. The Court nonetheless admonishes the
parties that the need for accuracy in their briefing — although always of great import — takes on
added significance in the present case, given the sheer number of claims and defendants
involved. The Court expects future briefing to maintain the required level of accuracy.
5
It is apparent from review of Duncan’s motion that he intended to move for summary
judgment with respect to both of Plaintiff’s breach of fiduciary duty claims asserted against him,
as alleged in Counts XIX (breach of fiduciary duty based on establishment of LLC) and XXII
(breach of fiduciary duty based on FMV Loan closing). See Duncan’s [186-1] Mem. of Law in
support of MSJ at 10-13 (moving for summary judgment with respect to “Juergen’s [sic] claims
for alleged breaches of fiduciary duty relat[ing] to Duncan’s alleged drafting of documents,
formation of the LLC, allegedly not providing additional legal services to Juergens, and his
activities at Settlement.”). Accordingly, although Duncan omits any direct reference to Count
XXII by number, Plaintiff had adequate notice that Duncan intended to move for summary
judgment on both breach of fiduciary counts and indeed, Plaintiff’s opposition is based on that
assumption. See Pl.’s [196] Opp’n at 17 (addressing both Plaintiff’s claims for fiduciary duty).
The Court shall therefore proceed on the understanding that Duncan has moved for summary
judgment with respect to Count XXII as well.
11
deceptive HUD-1;
• Count XXXII (Violation of D.C. Consumer Credit Service Organization Act),
which alleges that Duncan made and used false and misleading
representations, failed to disclose material facts, and directly or indirectly
engaged in acts to defraud or deceive Plaintiff by fraudulently disguising the
FMV Loan as a commercial loan rather than a personal consumer residential
loan; and
• Plaintiff’s request for punitive damages as set forth in Counts XVII (Breach
of Contract), XVIII (Legal Malpractice), XIX (Breach of Fiduciary Duty), XX
(Negligence), XXI (Breach of Contract), XXII (Breach of Fiduciary
Duty),and XXIII (Negligence).
Duncan’s motion therefore focuses principally on Plaintiff’s claims with respect to his
alleged role in the formation of the LLC and the issuance of the FMV Loan. Given the existence
of a material dispute over the correct nature of the FMV Loan, Duncan is entitled to summary
judgment only to the extent his arguments do not turn on this key dispute.
At the outset, the Court notes that its resolution of Duncan’s motion for partial summary
judgment is significantly hindered by the generally deficient quality of the parties’ briefing. As is
discussed in more detail below, the parties’ briefing is often at cross-purposes and unresponsive
to the arguments advanced by the other side’s papers. In addition, the parties have provided only
a bare outline of the facts relevant to Duncan’s motion and his role in forming the LLC and
extending the FMV Loan. The specific details regarding Duncan’s exact conduct in those
transactions therefore remain unclear to a large degree. Nonetheless, the following background
emerges from the parties’ briefing and attachments.
As the parties agree, Duncan acted as FMVILA’s attorney with respect to the FMV Loan
transaction. See Duncan’s [186-3] Stmt. ¶¶ 2, 9 Pl.’s [196] Resp. Stmt. ¶¶ 2, 9. Plaintiff
admitted as much at deposition, testifying that she knew Duncan was counsel for FMVILA and
12
that he had neither agreed to be nor was acting as her attorney with respect to the FMV Loan.
See Duncan’s [186-3] Stmt. ¶ 9; Pl.’s [196] Resp. Stmt. ¶ 9; see also Duncan’s [186] MSJ, Att. 5
(Excerpts of Plaintiff’s May 28, 2008 Deposition) (hereinafter, “Juergens Dep.”) at 819:18-820:6
(“Q. And you knew [Duncan] only as the lawyer for [FMVILA]? A. Correct. Correct. Q. And
did he agree to be your lawyer? A. No, he did not . . . he told me he was not acting as my lawyer
. . . [h]e made that clear.”).
The details of the FMV Loan closing itself are largely absent from the parties’ briefing.
The parties agree, however, that Duncan was present at the FMV Loan closing and that he
discussed the FMV Loan papers with Plaintiff. Duncan’s [186-3] Stmt. ¶ 6; Pl.’s [196] Resp.
Stmt. ¶ 6. Although Plaintiff was aware that Duncan was acting as FMVILA’s attorney at the
closing, she testified that she “trust[ed]” him because he was a lawyer who was “there to be on
your side and not take advantage.” See Pl.’s [196] Resp. Stmt. ¶ 9 (quoting Juergens Dep. at
109:19-110:3).
In addition, the parties appear to agree that Duncan assisted with the preparation and
filing of the articles of organization necessary for the formation of Plaintiff’s LLC. See Compl.,
Ex. 4 (Articles of Organization). A material dispute exists, however, as to whether Duncan did
so at Plaintiff’s request. As to this point, the parties present contradictory stories. According to
Duncan, Plaintiff requested that Duncan assist with the formation of a limited liability
corporation. Duncan’s [186-3] Stmt. ¶ 4; see also Duncan’s [186] MSJ, Att. 4 (Excerpts of
Duncan’s July 9, 2008 Deposition) (hereinafter, “Duncan Dep.”) at 7:2-8:13; 9:13-15 (testifying
that Defendant Bennett and Plaintiff approached him at the FMVILA office and informed him
that Plaintiff was going to be borrowing money from FMVILA and that she wanted to establish a
13
corporation in order to do so). Duncan agreed to the request, but he maintains that in so doing,
he made it clear to Plaintiff that he was not acting as her attorney. Duncan’s [186-3] Stmt. ¶ 4;
see also Duncan Dep. at 14:6-9 (stating that he “made it very clear to [Plaintiff] that [he] was not
representing her at any point; that, in fact, [his] client was [FMVILA]”).
Plaintiff for her part denies that she ever requested Duncan to assist with the formation of
the LLC. Specifically, Plaintiff testified at deposition that she never signed any document
containing the words “1230 23rd Street, LLC” and that she only learned of the existence of the
LLC during the course of the pending litigation. Pl.’s [196] Resp. Stmt. ¶ 4. The implication, of
course, is that she never requested that Duncan establish an LLC and that the decision to form a
limited liability company was made by Duncan, FMVILA, or one of the other FMV Defendants
without her knowledge or consent.
Finally, the parties agree that “[a]ll of Duncan’s activities with regard to the FMV Loan
occurred solely in Virginia at the offices of FMV,” and that he is not now, nor has he been at any
time relevant to this lawsuit, a licensed member of the District of Columbia Bar. Duncan’s [186-
3] Stmt. ¶¶ 7, 8; Pl.’s [196] Resp. Stmt. ¶¶ 7, 8. With that background in mind, the Court now
turns to the merits of the parties’ arguments as set forth in Duncan’s [185/186] Motion for
Summary Judgment, Plaintiff’s [195] Opposition, and Duncan’s [224] Reply.
1. Choice of Law
Because this is a diversity case, the Court must first determine which state law to apply.
In resolving this question, the Court applies the District of Columbia’s choice of law rules.
Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941). Under the District of
Columbia’s rules, the Court first determines whether a “true conflict” exists between the laws of
14
competing jurisdictions. GEICO v. Fetisoff, 958 F.2d 1137, 1141 (D.C. Cir. 1992). Where no
true conflict exists, a court applies the law of the District of Columbia by default. Id. If,
however, a true conflict exists, District of Columbia courts apply a “constructive blending” of the
“governmental interests” and the “most significant relationship” test. Hercules & Co., Ltd v.
Sharma Restaurant Co., 566 A.2d 31, 41 n. 18 (D.C. 1989); see also Drs. Groover, Christie &
Merritt, P.C. v. Burke, 917 A.2d 1110, 1117 (D.C. 2007). Under that test, courts must “‘evaluate
the governmental policies underlying the applicable laws and determine which jurisdiction’s
policy would be more advanced by the application of its law to the facts of the case under
review.’” Burke, 917 A.2d at 1117 (quoting District of Columbia v. Coleman, 667 A.2d 811, 816
(D.C. 1995)). In so doing, courts also consider certain relevant factors enumerated in the
Restatement (Second) of Conflict of Laws as part of that analysis, which factors “help to identify
the jurisdiction with the ‘most significant relationship to the dispute,’ that presumptively being
the jurisdiction whose policy would be more advanced by application of its law.”6 Id. (quoting
Hercules, 566 A.2d at 41 & n.18)). Dependent upon the facts and legal claims at issue in a
particular case, “‘[d]ifferent law may apply to different issues in a lawsuit.’” Jaffe v. Pallotta
TeamWorks, 374 F.3d 1223, 1228 (D.C. Cir. 2004) (quoting Logan v. Providence Hosp., 778
6
Specifically, for tort claims, District of Columbia courts consider the following four
factors as set forth in the Restatement (Second) of Conflict of Laws § 145: (1) the place where
the injury occurred; (2) the place where the conduct causing the injury occurred; (3) the domicile,
residence, nationality, place of incorporation and place of business of the parties; and (4) the
place where the relationship is centered. Burke, 917 A.2d at 1117 (quoting Coleman, 667 A.2d
816)). For contract claims, District of Columbia courts consider the following five similar
factors set forth in the Restatement (Second) of Conflict of Laws § 188: (1) the place of
contracting; (2) the place of negotiation; (3) the place of performance; (4) the location of the
contract’s subject matter; and (5) the domicile, residence, nationality, place of incorporation and
place of business of the parties. Stephen A. Goldberg Co. v. Remsen Partners, Ltd., 170 F.3d
191, 194 (D.C. Cir. 1999).
15
A.2d 275, 280 (D.C. 2001)).
Applying District of Columbia’s choice of law rules to this case, Duncan argues that
Virginia law applies to Plaintiff’s common law claims sounding in tort.7 See Duncan’s [186-1]
Mem. of Law in support of MSJ at 3-4. As support for this assertion, Duncan notes that “he
engaged in no activities or actions outside of Virginia;” that all relevant actions and services
“occurred in Virginia;” and that, to the extent Plaintiff’s claims against him stem from his role as
a licensed Virginia attorney, “Virginia has a paramount interest in regulating its attorneys.” Id. at
4. Duncan therefore concludes that under the District’s choice of law analysis, Virginia state law
should apply. See id. at 4-5.
Plaintiff makes no effort to address the choice of law inquiry and fails to provide any
response whatsoever to Duncan’s argument that Virginia law applies. See generally Pl.’s [196]
Opp’n. Her failure to do so is particularly egregious given that the Court has previously made
clear that choice of law concerns are implicated in this diversity action and that it is the parties’
obligation to sufficiently brief the issue. See Juergens v. UTS, 533 F. Supp. 2d 64, 77 (D.D.C.
2008). Nonetheless, while Plaintiff has not explicitly addressed the issue, the Court notes that
she agrees with Duncan that “[a]ll of [his] activities with regard to the FMV Loan occurred solely
7
Although at first glance Duncan’s choice of law analysis purports to apply to all of
Plaintiff’s claims against him, it is apparent upon closer review that Duncan’s substantive
discussion is directed solely at Plaintiff’s common law claims sounding in tort. See Duncan’s
[186-1] Mem. of Law in support of MSJ at 3-4 (citing to case law discussing choice of law rules
for tort-based claims). He does not specifically address either Plaintiff’s contract-based claims or
her statutory claims. See id. As noted above, “‘[d]ifferent law may apply to different issues in a
lawsuit,’” Jaffe, 374 F.3d at 1228 (quoting Logan, 778 A.2d at 280)), and Duncan’s choice of
law analysis with respect to Plaintiff’s common law tort claims may not apply with equal weight
to Plaintiff’s remaining claims. Accordingly, the Court understands Duncan’s choice of law
analysis to apply only to Plaintiff’s common law claims sounding in tort.
16
in Virginia at the offices of [FMVILA].” Pl.’s [196] Resp. Stmt. ¶ 7. Plaintiff also relies heavily
on Virginia case law in opposing Duncan’s motion. See Pl.’s [196] Opp’n at 15-18. The Court
therefore understands Plaintiff to have conceded Duncan’s arguments that Virginia law applies
and finds that she has waived any objections to application of Virginia state law to her common
law claims sounding in tort as alleged against Duncan. See CSX Transp., Inc. v. Commercial
Union Ins. Co., 82 F.3d 478, 482-83 (D.C. Cir. 1996) (parties may waive choice-of-law
arguments); C&E Servs., Inc. v. Ashland, Inc., 498 F. Supp. 2d 242, 255 n. 5 (D.D.C. 2007)
(same); cf. In re Korean Air Lines Disaster of Sept. 1, 1983, 932 F.2d 1475, 1495 (D.C. Cir.
1991) (courts need not address choice of law questions sua sponte ). Accordingly, the Court
shall apply Virginia substantive law to Plaintiff’s common law claims sounding in tort — i.e.,
Plaintiff’s legal malpractice, negligence, breach of fiduciary duty, fraud and civil conspiracy
claims.
Neither party, however, has addressed the choice of law analysis with respect to
Plaintiff’s remaining contract-based and statutory claims. As indicated above, Plaintiff has failed
to provide any choice of law analysis, and Duncan has addressed the application of the District’s
choice of law rules only to Plaintiff’s tort-based claims. Nonetheless, both parties have assumed
that Virginia law governs Plaintiff’s breach of contract claim and have each applied Virginia
substantive law in evaluating the merits of that claim. See Duncan’s [186-1] Mem. of Law in
support of MSJ at 13-14; Pl.’s [196] Opp’n at 17-18. “The Court need not and does not question
the parties’ assumptions on that point.” Davis v. Grant Park Nursing Home LP, 639 F. Supp. 2d
60, 65 (D.D.C. 2009) (citing CSX Transp., 82 F.3d at 482-83 and In re Korean Air Lines
Disaster, 932 F.2d at 1495).
17
The only remaining issue, then, for purposes of the instant Memorandum Opinion is the
choice of law question with respect to Plaintiff’s statutory claims. For the reasons set forth
below, the Court shall address the choice of law analysis specific to these claims in the context of
discussing the parties’ substantive arguments regarding the application of the District of
Columbia’s consumer protection statute.
2. Plaintiff’s Legal Malpractice, Negligence, and Breach of Fiduciary Duty
Claims Relating to Duncan’s Role in the FMV Loan Transaction
The Court first moves to consider Duncan’s motion with respect to Plaintiff’s legal
malpractice, negligence, and breach of fiduciary duty claims asserted against him based upon his
alleged role in the establishment of the LLC and the FMV Loan closing — i.e., Counts XVIII
(Legal Malpractice), XIX (Breach of Fiduciary Duty), XX (Negligence), Count XXII (Breach of
Fiduciary Duty), and XXIII (Negligence). The first three of these claims (Counts XVII, XIX, and
XX) are each premised on an identical set of allegations relating to the establishment of the LLC
and essentially assert alternative theories of recovery for the same conduct. See Fourth Am.
Compl. ¶¶ 351-374. Specifically, Plaintiff alleges that, “[b]y claiming to have prepared
documents [establishing the LLC] on [Plaintiff’s] behalf and receiving a fee for doing so, . . . and
filing these documents with the Virginia State Corporation Commission,” Duncan: (a) “entered
into an attorney client-relationship with [Plaintiff]’” (Count XVIII); (b) owed “a fiduciary duty to
[Plaintiff],” (Count XIX); and/or (c) “owed a duty of care to [Plaintiff],” (Count XX). Id. ¶¶ 352,
360, 368. Plaintiff further alleges that Duncan committed legal malpractice, breached his
fiduciary duty and/or breached his duty of care to Plaintiff by establishing the LLC.8 See id. ¶¶
8
In particular, as set forth in Plaintiff’s Fourth Amended Complaint, she asserts that
Duncan breached his duties to her and/or committed legal practice by establishing the LLC
18
353-56, 361-64, 369-72. By contrast, the latter two claims — for breach of fiduciary duty (Count
XXII) and negligence (Count XXIII), respectively — are based upon Duncan’s alleged conduct at
the actual FMV Loan closing. See id. ¶¶ 383-98. Plaintiff alleges that Duncan owed a duty of
care and/or fiduciary duty “to [Plaintiff] to perform the closing on the [FMV Loan], including
using a proper and accurate accounting statement, ensuring the all loan documents comply with
all relevant laws and statutes, notarizing and authenticating loan documents by a licensed notary,
promptly disbursing funds associated with this loan, promptly filing loan documents and loan
releases and conducting the settlement in a manner in accordance with all relevant laws and
statutes.” Id. ¶¶ 384, 392. According to Plaintiff, Duncan was negligent and/or breached his
fiduciary duty in a multitude of ways and that she suffered damages as a direct and proximate
result of such breaches. See id. ¶¶ 385-89, 393-98.9
because: (a) “there was no benefit to [Plaintiff] from entering into such a complicated
transaction;” (b) Plaintiff was “actually harmed” by the transaction “as she was forced to pay
significant ‘transfer’ and ‘recordation’ taxes to the District of Columbia Record of Deeds and lost
her homestead tax deduction;” (c) Duncan “failed to file any request with the District of
Columbia Department of Consumer and Regulatory Affairs for authorization for the [LLC] to
conduct business as a foreign Limited Liability Company or register the property as a rental
property with the District of Columbia Department of Consumer and Regulatory Affairs or
obtain a business license for the [LLC];” and (d) the transaction actually “benefitted Defendant
Duncan’s principal client, Defendant [FMVILA], and allowed [FMVILA] to fraudulently
disguise the loan to [Plaintiff] as a commercial loan rather than, what was in reality, a personal
consumer residential loan.” Fourth Am. Compl.¶¶ 353-56, 361-64, 369-72.
9
Specifically, Plaintiff alleges that Duncan breached his duty to her by: (a) “by failing to
use a proper and accurate accounting statement;” (b) “by failing to ensure that the all loan
documents comply with all relevant laws and statutes;” (c) “by failing to notarize and
authenticate loan documents by a licensed notary;” (d) “by failing to promptly disburse funds
associated with this loan;” (e) “by failing to promptly filing loan documents and loan releases;”
(f) “by failing to conduct the settlement in a manner in accordance with all relevant laws and
statutes;” (g) “by using a HUD-1 settlement statement that did not accurately reflect the nature of
the transaction;” and (h) “by paying ‘transfer’ and ‘recordation’ taxes to the District of Columbia
Recorder of Deeds.” Fourth Am. Compl. ¶¶ 385-87, 393-95.
19
Duncan has moved for summary judgment with respect to each of the claims enumerated
above. As set forth in his opening motion, Duncan principally argues that Plaintiff cannot
succeed on any of her claims against him that are based on his role in the formation of the LLC
and the FMV Loan settlement because there is no evidence that he entered into an attorney-client
relationship with Plaintiff. As characterized by Duncan, Plaintiff’s claims for legal malpractice,
breach of fiduciary duty and negligence are each predicated upon a finding that he entered into an
attorney-client relationship with Plaintiff, such that absent proof that an attorney-client
relationship existed, Plaintiff cannot succeed on her claims against Duncan based on his role in
forming the LLC and closing the FMV Loan. See Duncan’s [186-1] Mem. of Law in support of
MSJ at 4-8.10
Plaintiff concedes in her opposition briefing that she did not enter in an attorney-client
relationship with Duncan with respect to the FMV Loan closing, but argues that an attorney-
client relationship nonetheless existed at least with respect to the formation of the LLC ,and that
regardless, even absent an attorney-client relationship, Plaintiff’s claims survive. See Pl.’s [196]
Opp’n at 9-16. Specifically, Plaintiff argues that her legal malpractice claim remains viable
because Virginia law permits third-parties to bring a legal malpractice action against an attorney
in certain “special circumstances” where the third-party’s reliance was both reasonable and
foreseeable. See id. at 15. Plaintiff also argues that, notwithstanding the absence of an attorney-
10
Duncan also argues in the alternative that even if the Court were to find that an
attorney-client relationship existed, such that Plaintiff’s claim for legal malpractice survives
summary judgment, he is nonetheless entitled to summary judgment with respect to Plaintiff’s
negligence and breach of fiduciary claims. See Duncan’s [186-1] Mem. of Law in support of
MSJ at 8-13. Because the Court finds below that no attorney-client relationship existed between
Plaintiff and Duncan, the Court need not consider this argument in the alternative.
20
client relationship, Duncan owed her “the duty of acting carefully” and a “duty to act with
fairness,” such that her claims for negligence and breach of fiduciary duty survive summary
judgment as well. See id. at 11-16. Pursuant to these broad duties, Plaintiff argues that Duncan
was required to, inter alia, “resolve the discrepancy involving where she was living before
executing [the FMV Loan documents];” “ensure the HUD-1 was complete and truthful;” and
ensure that Plaintiff was not “misle[d] . . . into believing that she was signing documents before a
valid notary public.” Id. at 13.
Duncan does not directly respond to Plaintiff’s argument in his reply briefing that her
claims survive even absent an attorney-client relationship. See generally Duncan’s [224] Opp’n.
Rather, Duncan argues for the first time that Plaintiff’s claims against him must fail because she
is required under Virginia law to proffer expert testimony to establish the appropriate standard of
care and to prove liability against him, but that she has failed to provide an expert qualified to
opine on these issues.11 Duncan’s [224] Reply at 4-8. According to Duncan, although Plaintiff
has designated two expert witnesses, neither expert is sufficiently qualified to provide the
necessary testimony regarding Duncan’s duties under Virginia law with respect to the FMV
Loan. Id. Plaintiff therefore cannot succeed on her legal malpractice, negligence or breach of
fiduciary claims against him. Id.
11
Although Duncan briefly noted the issue in a footnote in his opening memorandum, he
declined to provide any substantive discussion at that time in light of his arguments in the
alternative that Plaintiff’s claims based on Duncan’s alleged role in the FMV Loan closing failed
given the lack of any attorney-client relationship. See Duncan’s [186-1] Mem. of Law in support
of MSJ at 5, n. 1 (noting that expert legal testimony is normally required to demonstrate whether
an attorney has violated an applicable standard of care, but indicating that it “was premature to
consider the purported expert testimony of Plaintiff’s experts” given his argument that the claims
fail in the absence of any attorney-client relationship).
21
Upon consideration of the parties’ briefing and the positions set forth therein, the Court
ultimately agrees with Duncan that there is no evidence in the record from which a jury could
reasonably conclude that he and Plaintiff entered into an attorney-client relationship. The Court,
however, cannot agree on the present record that the absence of an attorney-client relationship
conclusively establishes that Duncan is also entitled to summary judgment with respect to
Plaintiff’s malpractice and common law tort claims. The parties have not adequately briefed this
question. As indicated above, Duncan’s opening brief in support of his motion focuses almost
entirely on the question of whether an attorney-client relationship existed, arguing that if no such
relationship existed, Plaintiff’s claims fail. He makes no effort in his pleadings to address the
distinct question of whether, even accepting that no attorney-client relationship existed,
Plaintiff’s claims nonetheless fail. Similarly, while Plaintiff urges the Court to find that Duncan
did in fact owe her certain duties as part the FMV Loan closing, even absent an attorney-client
relationship, her briefing on this issue is wholly inadequate. In addition, the Court declines to
make any ruling at this time regarding Duncan’s contention that he is entitled to summary
judgment because Plaintiff cannot proffer adequate expert testimony to demonstrate liability, as
the argument was advanced for the first time in reply. Nonetheless, because Duncan’s argument
on this latter point, if meritorious, appears to be dispositive of Plaintiff’s legal malpractice,
breach of fiduciary duty, and negligence claims, the Court concludes that the appropriate course
of action at this time is to hold Duncan’s motion in abeyance as to these counts and provide
Plaintiff an opportunity to respond to Duncan’s argument regarding the need for expert
testimony.
22
a. Duncan and Plaintiff did not enter into an attorney-client
relationship.
The record evidence demonstrates that Plaintiff did not enter into an attorney-client
relationship with Duncan at any time during the FMV Loan transaction. Indeed, as indicated
above, Plaintiff has conceded that no attorney-client relationship existed with respect to the FMV
Loan closing itself, see Pl.’s [196] Opp’n at 12, and for good reason. Plaintiff explicitly
acknowledged at her deposition that Duncan had neither agreed to be nor was acting as her
attorney with respect to the FMV Loan and that he had made it very clear to her that he was
acting as counsel for FMVILA with regard to the FMV Loan transaction. Nonetheless, in an
attempt to rescue her legal malpractice claim against Duncan based on his formation of the LLC,
Plaintiff argues that while an attorney-client relationship may not have existed with respect to the
loan closing itself, such a relationship existed with respect to the formation of the LLC.
The Court is not persuaded by Plaintiff’s attempts to carve the FMV Loan transaction into
two discrete events — i.e., the creation of the LLC and the actual loan settlement. It is readily
apparent from the record evidence that the establishment of the LLC was part and parcel of the
FMV Loan closing. That is, the LLC was formed in order to facilitate FMVILA’s extension of a
commercial loan to Plaintiff, and as Duncan asserts — and as Plaintiff does not dispute — an
attorney often prepares documents to facilitate a closing for both sides. See Duncan’s [186-1]
Mem. of Law in support of MSJ at 6-8. Although a dispute continues to exist as to the true
nature of that loan, there is no dispute that establishment of the LLC was an integral part of the
FMV Loan transaction as it was structured and Plaintiff has presented no argument to the
contrary.
23
Regardless, even if the Court were persuaded (which it is not) that Duncan’s role in the
formation of the LLC should be viewed as discrete from his larger role as counsel for FMVILA
with respect to the FMV Loan closing, Plaintiff’s argument on this point is insufficient to defeat
summary judgment for two principal reasons. First, Plaintiff has not directed the Court to any
record evidence or relevant legal authority supporting her claim that she entered into an attorney-
client relationship with Duncan to form the LLC. As a review of her opposition briefing
demonstrates, Plaintiff’s argument in favor of finding that an attorney-client relationship existed
with respect to the formation of the LLC consists solely of unsupported allegations copied almost
verbatim from her Fourth Amended Complaint. See Pl.’s [196] Opp’n at 9-11. She has not
directed the Court to any evidentiary or factual support for these allegations. See id. Discovery
is now closed, and Plaintiff cannot continue to rely solely on her own unfounded and
unsupported allegations. Rather, she “must ‘go beyond the pleadings and . . . ‘designate’ specific
facts showing that there is a genuine issue for trial.’” See Celotex Corp., 477 U.S. at 324
(internal citations omitted). This she has failed to do.
Second, Plaintiff has also failed to cite to any legal authority in support of her position
that an attorney-client relationship was formed with respect to the establishment of the LLC. By
contrast, citing to case law from both Virginia and elsewhere, Duncan argues in his opening
motion that the mere fact that he assisted in the preparation of documents to facilitate the loan
closing and that Plaintiff paid for these services does not create an attorney-client relationship.
See Duncan’s [186-1] Mem. of Law in support of MSJ at 6-7. Plaintiff has not responded to this
assertion and the related case law nor has she directed the Court to any case law in support of her
apparent contrary view that the preparation and filing of the LLC’s articles of organization as part
24
of the FMV Loan closing created an attorney-client relationship between herself and Duncan.
Third and finally, Plaintiff’s current litigation position that she and Duncan entered into
an attorney-client relationship with respect to the establishment of the LLC is wholly
inconsistent with Plaintiff’s own testimony. As set forth above, Plaintiff testified that she had
neither heard of the LLC prior to this lawsuit nor requested Duncan’s assistance in setting it up.
While a contract establishing an attorney-client relationship may, under Virginia law, be either
express or implied, there must be “some indication that the advise and assistance of the attorney
was sought and received.” Carstensen v. Chrisland Corp., 442 S.E.2d 660, 668 (Va. 1994). In
this case, Plaintiff maintains that she did not request the advice and assistance of Duncan with
respect to the establishment of a limited liability corporation. Having testified as such, her
present litigation position that she nonetheless entered into an attorney-client relationship in
order to have Duncan establish the LLC on her behalf is without merit. The Court shall
therefore GRANT Duncan’s [185/186] Motion for Partial Summary Judgment to the extent he
argues that no attorney-client relationship existed between himself and Plaintiff.
b. Duncan’s motion with respect to Plaintiff’s claims for legal
malpractice, negligence, and breach of fiduciary duty is otherwise
held in abeyance.
As indicated above, the Court is unable to resolve Duncan’s motion for partial summary
judgment with respect to Plaintiff’s malpractice and common law tort claims on the present
record. First, given the precursory nature of the parties’ briefing, the Court cannot determine
whether Duncan, who appears to have been the only attorney present at the FMV Loan closing
(albeit as FMVILA’s attorney), owed Plaintiff any duties — such as the duty of acting carefully
or the duty of fairness — or may be held liable for legal malpractice under Virginia law, and the
25
Court declines to advance arguments the parties themselves have not made. Although Plaintiff
raised the issue in her opposition briefing, Duncan chose not to directly respond in his briefing.
The general lack of details regarding Duncan’s exact role in the FMV Loan closing further
hampers any discussion of the potential duties, if any, that may have flowed from Duncan’s role
in the FMV Loan transaction. Duncan therefore has not shown that he is entitled to summary
judgment on Plaintiff’s claims for legal malpractice, negligence, and breach of fiduciary duty
based on the absence of an attorney-client relationship alone.
Second, the Court declines to consider at this time Duncan’s alternative argument, raised
for the first time in reply, that Plaintiff’s claims fail because she cannot proffer qualified expert
testimony establishing Duncan’s liability. The Court has previously indicated in these
proceedings that it is disinclined to consider arguments advanced for the first time in a reply. See
Juergens v. UTS, 652 F. Supp. 2d 40, 50, n. 8. (D.D.C. 2009) (declining to consider argument
raised for first time in reply) (citing Am. Wildlands v. Kempthorne, 530 F.3d 991, 1001 (D.C.
Cir.2008) (“We need not consider this argument because plaintiffs . . . raised it for the first time
in their reply brief.”)). As the D.C. Circuit has observed, “[c]onsidering an argument advanced
for the first time in a reply brief . . . is not only unfair to an appellee, but also entails the risk of an
improvident or ill-advised opinion on the legal issues tendered.” McBride v. Merrell Dow &
Pharm., 800 F.2d 1208, 1211 (D.C. Cir.1986) (internal citation omitted)). In this case, Duncan
did not substantively address this particular argument until his reply, and Plaintiff has not had a
full opportunity to respond.
Nonetheless, the Court notes that Duncan’s argument on this point, if meritorious,
appears to be dispositive of Plaintiff’s legal malpractice, breach of fiduciary duty, and negligence
26
claims. It therefore concludes that the appropriate course of action at this time is to hold
Duncan’s motion in abeyance as to these counts and provide Plaintiff an opportunity to respond
to Duncan’s argument regarding the need for expert testimony, pursuant to the schedule set forth
in the accompanying Order. Plaintiff is advised that her response is limited solely to addressing
Duncan’s assertions, made for the first time in reply, that (a) Virginia law requires Plaintiff to
present expert testimony in this case to establish the appropriate standard of care, whether
Duncan breached that standard of care, and whether his breach was the proximate cause of
Plaintiff’s damages, and (b) Plaintiff has failed to produce expert testimony sufficient to meet
that requirement. The Court shall also provide Duncan an opportunity to reply to Plaintiff’s
response. The parties are admonished that any future briefing must include accurate citations to
both evidentiary and legal support for their arguments. Accordingly, the Court shall HOLD IN
ABEYANCE Duncan’s [185/186] Motion for Summary Judgment with respect to Counts XVIII
(Legal Malpractice), XIX (Breach of Fiduciary Duty), XX (Negligence), XXII (Breach of
Fiduciary Duty), and XXIII (Negligence) of Plaintiff’s Fourth Amended Complaint in order to
provide Plaintiff an opportunity to file a targeted response to Duncan’s argument, raised for the
first time in reply, that her claims fail for lack of expert testimony. A schedule for further
briefing is set forth in the accompanying Order.
3. Plaintiff’s Breach of Contract Claim Relating to Duncan’s Role in the
Formation of the LLC
Duncan has also moved for summary judgment with respect to Count XVII of Plaintiff’s
Fourth Amended Complaint, which asserts a breach of contract claim premised on Duncan’s
preparation and filing of the LLC articles of organization. Specifically, Plaintiff alleges that
27
“[b]y claiming to have prepared documents [establishing the LLC] on [Plaintiff’s] behalf and
receiving a fee for doing so, . .. and filing these documents with the Virginia State Corporation
Commission, Defendant Duncan entered into [a] contract with [Plaintiff] to use a degree or
reasonable care and skill expected of lawyers acting under similar circumstances.” Fourth Am.
Compl. ¶ 344. Plaintiff further alleges that in establishing the LLC, Duncan breached his
contract with Plaintiff because: (a) “there was no benefit to [Plaintiff] from entering into such a
complicated transaction;” (b) Plaintiff was “actually harmed” by the transaction “as she was
forced to pay significant ‘transfer’ and ‘recordation’ taxes to the District of Columbia Record of
Deeds and lost her homestead tax deduction;” (c) Duncan “failed to file any request with the
District of Columbia Department of Consumer and Regulatory Affairs for authorization for the
[LLC] to conduct business as a foreign Limited Liability Company or register the property as a
rental property with the District of Columbia Department of Consumer and Regulatory Affairs or
obtain a business license for the [LLC];” and (d) the transaction actually “benefitted Defendant
Duncan’s principal client, Defendant [FMVILA], and allowed [FMVILA] to fraudulently
disguise the loan to [Plaintiff] as a commercial loan rather than, what was in reality, a personal
consumer residential loan.” Id. ¶¶ 344-349.
Duncan argues that he is entitled to summary judgment with respect to Plaintiff’s claim
for breach of contract because there is no evidence that a contract was ever formed. Specifically,
Duncan argues that there are no facts sufficient to establish that the requirements for a contract
under Virginia law have been met in this case or, alternatively, that any such contract is void for
28
vagueness. Duncan’s [186-1] Mem. of Law in support of MSJ at 13-14.12 Plaintiff appears to
agree. She does not dispute Duncan’s contention that no contract exists under Virginia law (or if
one exists, it is void for vagueness as a matter of law). See Pl.’s [196] at 17-18. Rather, she
contends that her breach of contract claim survives summary judgment — not because she and
Duncan agreed to enter into a contractual relationship — but because (a) “she has shown that
Defendant Duncan owed duties to [Plaintiff] in the establishment of the [LLC] and in the closing
of the [FMV Loan]” and (b) even “assuming there was no explicit contract between [Plaintiff]
and Defendant Duncan, [she] was an intended beneficiary of the contract between Defendant
Duncan and [FMVILA].” Pl.’s [196] Opp’n at 17-18. Such arguments are without merit.
First, Plaintiff’s assertion that Duncan owed a duty of care to Plaintiff is wholly irrelevant
to her breach of contract claim. While the Court cannot determine on the present record whether
Duncan in fact owed any duties to Plaintiff, as discussed above, Plaintiff’s contention, even if
true, does not support a claim for breach of contract. In order to establish a breach of contract
claim under Virginia law, a party must show: “(1) a legally enforceable obligation of a defendant
to a plaintiff; (2) the defendant’s violation or breach of that obligation; and (3) injury or damage
to the plaintiff caused by the breach of obligation.” Filak v. George, 594 S.E.2d 610, 614 (Va.
2004). In addition, for a contract to exist as a matter of law, there must be a “‘mutuality of assent
12
Duncan also argues that Plaintiff’s breach of contract claim must fail because “there are
no facts alleged to substantiate either Plaintiff’s claim of incurring special damages of
$5,000,000 in a $250,000 loan transaction, or how breach of the alleged contract may be the basis
of imposition fo punitive damages,” and that Plaintiff “asks for impossible relief against Duncan,
including declaring the [FMV Loan] void, the voiding of the loan documents, and rescinding the
transfer of title to the LLC.” Duncan’s [186-1] Mem. of Law in support of MSJ at 14. Given the
Court’s conclusion below that there is no evidence that a contract was ever entered into as
between Duncan and Plaintiff, the Court does not consider Duncan’s arguments in the
alternative.
29
— the meeting of the minds of the parties . . . [u]ntil the parties have a distinct intention common
to both . . . there is a lack of mutual assent and, therefore, no contract.’” Moorman v. Blackstock,
Inc., 661 S.E.2d 404, 409 (Va. 2008) (quoting Phillips v. Mazyck, 643 S.E.2d 172, 175 (Va.
2007)). “Mutual assent is determined ‘exclusively from those expressions of [the parties’]
intentions which are communicated between them.’” Id. (quoting Lucy v. Zehmer, 84 S.E.2d
516, 522 (Va. 1954)). There is no evidence on the present record to support a finding that
Plaintiff and Duncan mutually agreed to enter into a contract regarding the establishment of the
LLC. Indeed, as discussed above, the record evidence demonstrates that the parties did not enter
into a contractual attorney-client relationship at any point. See supra at pp. 23-25. Moreover,
specific to the claim that a contract was entered into with respect to the LLC, Plaintiff herself has
explicitly denied that she ever requested Duncan to assist her with the establishment of a limited
liability corporation. Pl.’s [196] Resp. Stmt. ¶ 4. As such, Plaintiff’s present claim that she and
Duncan entered into a contract to form a limited liability company is not only unsupported by the
record but also stands in direct contradiction to Plaintiff’s own testimony that she did not request
Duncan assist her in establishing the LLC.
Second, Plaintiff may not pursue a breach of contract claim based on an “intended
beneficiary theory,” as such a theory is directly at odds with her Fourth Amended Complaint. As
set forth therein, Plaintiff’s breach of contract claim is premised solely on the allegation that
“Duncan entered into [a] contract with [Plaintiff].” Fourth Am. Compl. ¶ 344. There is no claim
that she can recover for breach of contract based on an “intended beneficiary” theory. See id.
Fourth Am. Compl. ¶¶ 343-50. Plaintiff has been repeatedly advised that she cannot amend her
complaint through her opposition briefing. See, e.g., Juergens v. UTS, 533 F. Supp. 2d 64, 75
30
(D.D.C. 2008).
Accordingly, as there are no facts on the present record from which a reasonable jury
could conclude that Duncan entered into a contract with Plaintiff and as Plaintiff may not pursue
a breach of contract claim based on an intended beneficiary theory, her breach of contract claim
is without merit. Duncan’s [185/186] Motion for Summary Judgment is therefore GRANTED
with respect to Count XVII (Breach of Contract) of Plaintiff’s Fourth Amended Complaint.
4. Plaintiff’s Fraud Claim
The Court next moves to consider Duncan’s motion for summary judgment with respect
to Count XXV (Fraud) of Plaintiff’s Fourth Amended Complaint, which alleges that Duncan
made false statements to Plaintiff and prepared false documents with respect to the FMV Loan in
an effort to fraudulently disguise the transaction as a commercial loan rather than a personal
consumer residential loan. See Fourth Am. Compl. ¶¶ 404-18. Duncan argues that he is entitled
to summary judgment because “there are no allegations that [he] did anything more than prepare
documents in the manner in which he was directed” by his client, Defendant FMVILA;
accordingly, Duncan contends that Plaintiff’s fraud claim must fail because he cannot be held
liable for any misrepresentations or inaccuracies that might be contained in the documents where
he was simply “paper[ing] the deal” at his client’s direction and had no reason to believe any of
the statements were untrue. Duncan’s [186-1] Mem. of Law in support of MSJ at 18-19.
Plaintiff responds that “Defendant Duncan did more than simply acting as a scribe,” and as such,
may be held liable for fraud. See Pl.’s [196] Opp’n at 19-20. Although Duncan filed a reply
generally in support of his motion for summary judgment, he chose not to include any
substantive response regarding Plaintiff’s fraud claim. See generally Duncan’s [224] Reply.
31
Upon review of the parties’ briefing and the operative complaint, the Court concludes that
Duncan has not demonstrated that he is entitled to summary judgment on Plaintiff’s fraud claim.
First, Duncan’s argument is premised on a mischaracterization of Plaintiff’s Fourth Amended
Complaint. While Duncan focuses only on Plaintiff’s allegations that he prepared loan
documents containing false statements, Plaintiff has also clearly alleged that Duncan made
certain false representations and statements directly to Plaintiff herself. See Fourth Am. Compl.
¶¶ 405-06. Duncan has not addressed these allegations, instead focusing only on the alleged false
statements contained in the loan documents. Moreover, Plaintiff’s fraud claim is not premised
solely “on the notion that if Duncan drafted documents that incorrectly stated the terms of what
Juergens believed she was getting, he was committing fraud,” as Duncan claims. Duncan’s [186-
1] Mem. of Law in support of MSJ at 18. Rather, Plaintiff has alleged that Duncan “made these
representations and prepared these documents with actual knowledge that representations made
and statements contained in the documents were false,” and that he did so “with the intent to
deceive [Plaintiff] into entering into the loan from Defendant [FMVILA].” Id. ¶¶ 411-12. Even
assuming, then, that Duncan is correct that an attorney cannot be held liable for fraud based
solely on allegations that he unknowingly prepared false documents at his client’s direction, that
is not Plaintiff’s claim in this case.
Second, Duncan urges the Court to find as matter of undisputed fact that his role in the
FMV Loan closing was limited to that of “preparing the documents to ‘paper the deal’ between
the parties,” such that any “representations [included in the documents] were not his own.”
Duncan’s [186-1] Mem. of Law in support of MSJ at 19. Duncan, however, has not directed the
Court to any factual support for these claims. See id. at 18-21. Similarly, Duncan asserts that he
32
“did not negotiate the terms of the loan . . . and fully disclosed the loan documents to [Plaintiff]
before execution,” but fails to proffer any supporting record citations. See id. at 19. As indicated
previously, Duncan’s motion and supporting briefing provide the Court with few details
regarding his precise role in the FMV Loan closing. See supra at pp. 12, 13. Admittedly,
Plaintiff has done no better, relying solely on unsupported allegations to oppose Duncan’s
motion. See Pl.’s [196] Opp’n at 19-20. But Duncan, as the moving party, bears the burden of
proving that his role in the FMV Loan transaction was limited to “papering the deal,” as he now
argues. Having failed to do so, he is not entitled to judgment as a matter of law. Accordingly,
Duncan’s [185/186] Motion for Summary Judgment is DENIED with respect to Count XXV
(Fraud) of Plaintiff’s Fourth Amended Complaint.
5. Plaintiff’s Claim for Civil Conspiracy
Duncan next moves for summary judgment with respect to Count XXVI of Plaintiff’s
Fourth Amended Complaint, which asserts a claim for civil conspiracy against Duncan based on
allegations that he conspired with Defendant Bennet to fraudulently disguise the FMV Loan as a
commercial loan rather than a personal consumer residential loan. See Fourth Am. Compl. ¶¶
419-25. Although unacknowledged by either Duncan or Plaintiff, Virginia recognizes both a
claim for common law civil conspiracy and a claim for statutory conspiracy pursuant to the
Virginia Business Conspiracy statute, Va. Code § 18.2-499(A) (precluding “two or more
persons” from combining together “for the purpose of (i) willfully and maliciously injuring
another in his reputation, trade, business or profession by any means whatever or (ii) willfully
and maliciously compelling another to do or perform any act against his will, or preventing or
hindering another from doing or performing any lawful act”). See Catercorp., Inc. v. Caterin
33
Concepts, Inc., 431 S.E.2d 277, 281-82 (Va. 1993) (discussing common law conspiracy cause of
action as well as statutory conspiracy cause of action under Virginia law); see also Va. Code §
18.2-500 (providing for civil relief for any person “injured in his reputation, trade, business or
profession by reason of a violation of § 18.2-499”). A fair reading of the Fourth Amended
Complaint indicates that Plaintiff has alleged only a claim for common law civil conspiracy; the
complaint itself does not reference Virginia statute § 18.2-500 nor is there any other suggestion
that Plaintiff intended to allege a claim for conspiracy in violation of Virginia statute rather than
a claim for common law civil conspiracy. See Fourth Am. Compl. ¶¶ 419-25.
In moving for summary judgment, however, Duncan appears to have construed Plaintiff’s
claim — not as a common law claim for civil conspiracy — but as a claim for statutory
conspiracy pursuant to Virginia Code § 18.2-500. For example, he relies upon Va. Code § 18.2-
499(A) in setting forth the requirements for establishment of civil conspiracy under Virginia law.
See Duncan’s [186-1] Mem. of Law in support of MSJ at 16 & n. 27. Similarly, in advancing
his arguments against Plaintiff’s civil conspiracy claim, Duncan principally relies on Virginia
case law discussing statutory conspiracy. See, e.g., id. at 16-17 (citing to Charles E. Brauer Co.,
Inc. v. NationsBank of Virginia, 466 S.E.2d 382, 38-87 (Va. 1996) (analyzing claim under Va.
Code § 18.2-499); Fox v. Deese, 362 S.E.2d 699, 428 (Va. 1987) (same)). Thus, while Duncan
does not explicitly indicate in his briefing that he construes Plaintiff’s claim as one for statutory
civil conspiracy under Va. Code § 18.2-500, his reliance on the statutory code and related case
law suggests that he has done as much. It may be that the arguments Duncan now advances with
respect to a claim for statutory conspiracy are equally applicable to a claim for common law civil
conspiracy. Duncan, however, has not argued as much or indeed, even recognized that distinct
34
claims for common law conspiracy and statutory conspiracy exist under Virginia law. As such,
he has not demonstrated that he is entitled to summary judgment on Plaintiff’s claim for common
law civil conspiracy and his motion for summary judgment is therefore DENIED with respect to
Count XXVI.
6. Plaintiff’s Claims for Punitive Damages
Duncan also moves for summary judgment with respect to Plaintiff’s request for punitive
damages as requested in Counts XVIII (Legal Malpractice), XIX (Breach of Fiduciary Duty), XX
(Negligence), XXI (Breach of Contract), XXII (Breach of Fiduciary Duty),and XXIII
(Negligence).13 As indicated above, the Court has held in abeyance Duncan’s motion with
respect to the majority of these claims pending further briefing from the parties. Because
resolution of Duncan’s motion may ultimately render it unnecessary to address Plaintiff’s
requests for punitive damages based on such claims, the Court declines to consider at the present
time Duncan’s motion insofar he moves for summary judgment on punitive damages in Counts
XVIII through XXIII. Accordingly, Duncan’s [185/186] Motion for Summary Judgment is
HELD IN ABEYANCE with respect to Plaintiff’s punitive damages requests in Counts XVIII
(Legal Malpractice), XIX (Breach of Fiduciary Duty), XX (Negligence), XXI (Breach of
Contract), XXII (Breach of Fiduciary Duty), and XXIII (Negligence) of Plaintiff’s Fourth
Amended Complaint. The Court shall revisit the issue, as may be appropriate, once the parties’
supplemental briefing has been submitted.
13
Duncan has also moved for summary judgment with respect to Plaintiff’s request for
punitive damages in Count XVII (Breach of Contract) of the Fourth Amended Complaint.
Because the Court has already granted Duncan’s motion for summary judgment as to Count
XVII, the Court need not reach Duncan’s argument regarding Plaintiff’s punitive damages
request based on that claim.
35
7. Plaintiff’s Statutory Claims
Finally, Duncan has moved for summary judgment on Counts XXXI and XXXII of
Plaintiff’s Fourth Amended Complaint, which assert violations of the District of Columbia’s
Consumer Protection Procedures Act (“CPPA”), D.C. Code § 29.3901 et seq., and the District of
Columbia’s Consumer Credit Service Organization Act (“CCSOA”), D.C. Code § 28-4601 et
seq., respectively. See Fourth Am. Compl. ¶¶ 482-507. The Court shall address Duncan’s
arguments regarding each statute in turn.
a. Consumer Protection Procedures Act.
As set forth in Count XXXI of Plaintiff’s Fourth Amended Complaint, she alleges that
Duncan violated various provisions of the CPPA by, inter alia, fraudulently misrepresenting the
FMV Loan as a commercial loan. See id. ¶¶ 482-97. “The []CPPA regulates transactions
between a consumer and a merchant.” Adler v. Vision Lab Telecommunications, Inc., 393 F.
Supp. 2d 35, 39 (D.D.C. 2005); see also Howard v. Riggs Nat’l Bank, 432 A.2d 701, 709 (D.C.
1981). A “consumer” is “a person who does or would purchase, lease (from), or receive
consumer goods or services, including a co-obligor or surety, or a person who does or would
provide the economic demand for a trade practice.” D.C. Code § 28-3901(a)(2). A “merchant”
is “a person who does or would sell, lease (to), or transfer, either directly or indirectly, consumer
goods or services, or a person who does or would supply the goods or services which are or
would be the subject matter of a trade practice.” Id. § 28-3901(a)(3). “A merchant need not be
the ‘actual seller of the goods or services’ complained of, but must be ‘connected with the
‘supply’ side of the consumer transaction.’” Adler, 393 F. Supp. 2d at 39 (quoting Save
Immaculata/Dunblane, Inc. v. Immaculata Prep. Sch., 514 A.2d 1152, 1159 (D.C. 1986)).
36
Duncan contends that he is entitled to summary judgment on Plaintiff’s CPPA claim
because he is not a “merchant,” as that term is defined under the Act. Duncan’s [186-1] Mem. of
Law in support of MSJ at 20. Without citing to any case law or relevant statutory provisions,
Duncan asserts that he does not qualify as a merchant because (a) he “did not sell or transfer
services to [Plaintiff] in the District of Columbia” and (b) “[a]ll meetings and activities occurred
solely in the Commonwealth of Virginia.” Id. As indicated above, the statutory definition of
“merchant” does not itself contain any geographical limitation nor has Duncan directed the Court
to any other legal authority in support of his claim that the term is so limited. Accordingly,
Duncan’s argument, as framed, is without merit.
Nonetheless, it appears to the Court that, although poorly articulated, Duncan may have in
fact intended to raise a choice of law challenge to Plaintiff’s CPPA claim. While Duncan frames
his argument as one challenging his qualification as a merchant under the Act, his argument
regarding the location of the challenged conduct is more appropriately characterized as a choice
of law challenge. Cf. Williams v. First Gov’t Mortgage and Investors Corp., 176 F.3d 497, 499
(D.C. Cir. 1999) (applying choice of law analysis and concluding that CPPA applied to home
loan issued to D.C. resident and secured by property in the District of Columbia, even though
loan was issued by non-D.C. corporation with offices in Maryland, meetings regarding the loan
took place in Maryland, and loan payments were sent to a Maryland address). Duncan, however,
has not provided the Court with any specific discussion regarding the choice of law inquiry with
respect to Plaintiff’s statutory claims, and the Court declines to advance arguments not made by
the parties themselves. Accordingly, Duncan’s [185/186] Motion for Summary Judgment is
DENIED with respect to Count XXXI (violations of the CPPA) of Plaintiff’s Fourth Amended
37
Complaint.
b. Consumer Credit Service Organizations Act.
As set forth in Count XXXII of the Fourth Amended Complaint, Plaintiff alleges that
Duncan violated the CCSOA by, inter alia, fraudulently misrepresenting the FMV Loan as a
commercial loan and failing to provide Plaintiff with certain disclosures. See Fourth Am.
Compl. ¶¶ 498-507. The CCSOA precludes consumer credit service organizations from
engaging in certain prohibited conduct. See D.C. Code § 28-4601 et seq. A “consumer credit
service organization” is defined as
any person who, with respect to the extension of credit by others, sells, provides,
performs, or represents that he or she can sell, provide, or perform, in return for the
payment of money or other valuable consideration, any of the following services:
(i) Improvement of a consumer’s credit record, history, or rating;
(ii) Obtain an extension of credit for a consumer; or
(iii) Provide advice or assistance to a consumer regarding any matter related to the
consumer's personal, household, or family credit.
Id. § 28-4601(2)(A).
Duncan contends that he is entitled to summary judgment because he does not qualify as
a “consumer credit service organization.” Duncan’s [186-1] Mem. of Law in support of MSJ at
20. Specifically, he asserts that “he had no contact with [Plaintiff] to improve her credit, obtain
an extension of credit, or provide assistance regarding any matter related to her personal credit,
and had never seen her loan application before the suit” nor did he “take a credit application from
[Plaintiff] [or] meet with her respect to any item concerning her credit.” Id. From this, Duncan
concludes, without citation to any supporting case law or legal authority, that the Act therefore
does not apply to him. See id.
38
Duncan’s argument on this point is premised on the Court’s acceptance of his version of
the relevant facts. Unfortunately for Duncan, he has failed to provide sufficient support for the
broad factual assertions upon which his argument is based. Duncan cites to paragraph five of his
statement of material facts not in dispute as the sole support for his assertions that “he had no
contact with [Plaintiff] to improve her credit, obtain an extension of credit, or provide assistance
regarding any matter related to her personal credit, and had never seen her loan application before
the suit” nor did he “take a credit application from [Plaintiff] [or] meet with her respect to any
item concerning her credit.” See id. But as reference to Duncan’s statement demonstrates,
paragraph five states only that “[i]t was not Duncan’s job to review [Plaintiff]’s credit report with
regard to her First Mount Vernon Loan.” Duncan [186-3] Stmt. ¶ 5. This factual statement, even
if true, obviously does not support Duncan’s sweeping denials that he had no contact with
Plaintiff regarding her credit; rather, it states only that it was not his “job” to review her credit
report in connection with the FMV Loan.14 As such, there is no cited support for Duncan’s
broader claims that he did not, for example, give “advice or assistance” to Plaintiff regarding
“any matter related to the consumer’s personal, household, or family credit.” See, e.g., D.C.
Code § 28-4601(2)(A)(iii). Accordingly, Duncan has not demonstrated on the present record that
14
In addition, Duncan cites to his deposition at pages 6:15-7:1 as support for his assertion
that “[i]t was not [his] job to review Juergen’s credit report with respect to her First Mount
Vernon Loan.” See Duncan’s [186-3] Stmt. ¶ 5. The Court notes, however, that he has not
provided it with a copy of the relevant pages of his deposition. See generally Duncan Dep.
(skipping from page 5 to page 7). The Court therefore cannot determine on the present record if
Duncan’s factual assertion is adequately supported. Regardless, because Duncan’s claim that he
it was not his “job” to review Plaintiff’s credit report does not support his much broader
assertions that “he had no contact with Juergens to improve her credit, obtain an extension of
credit, or provide assistance regarding any matter related to her personal credit, [] had never seen
her loan application before the suit,” his failure to include the cited deposition page is ultimately
immaterial. Duncan’s [186-1] Mem. of Law in support of MSJ at 20.
39
he is entitled to summary judgment on Plaintiff’s CCSOA claim, and his [185/186] Motion for
Summary Judgment is therefore DENIED with respect to Count XXXII of Plaintiff’s Fourth
Amended Complaint.
To summarize, Duncan’s [185/186] Motion for Partial Summary Judgment is
GRANTED-IN-PART, DENIED-IN-PART, and HELD IN ABEYANCE-IN-PART.
Specifically, the motion is GRANTED insofar as Duncan argues that no attorney-client
relationship existed between himself and Plaintiff, and it is also GRANTED with respect to
Count XVII (Breach of Contract) of Plaintiff’s Fourth Amended Complaint. It is denied,
however, with respect to Counts XXV (Fraud), XXVI (Civil Conspiracy), XXXI (CPPA), and
XXXII (CCSOA) of Plaintiff’s Fourth Amended Complaint. Finally, the motion is HELD IN
ABEYANCE insofar as Duncan urges that he is entitled to summary judgment on the underlying
claims and/or Plaintiff’s punitive damages requests set forth in Counts XVIII (Legal
Malpractice), XIX (Breach of Fiduciary Duty), XX (Negligence), XXI (Breach of Contract),
XXII (Breach of Fiduciary Duty), and XXIII (Negligence), pending further briefing by the parties
pursuant to the schedule set forth in the accompanying Order.
B. Plaintiff’s Motion for Partial Summary Judgment on the Issue of Duncan’s
Counterclaim
The Court turns next to consider Plaintiff’s [174] Motion for Summary Judgment on the
Issue of Duncan’s Counterclaim. As indicated above, Duncan filed an Answer and Counterclaim
against Plaintiff in response to her Fourth Amended Complaint. See generally Duncan’s Ans. &
Counterclaim, Docket No. [119]. Duncan’s Counterclaim includes two counts: (1) Count One
alleges fraud, fraud in the inducement, misrepresentation, and negligent misrepresentation; and
(2) Count Two alleges abuse of process or malicious prosecution. See id. Plaintiff has moved
40
for summary judgment on both counts, arguing that discovery has failed to disclose any facts to
support these two counts. See Pl.’s [174] MSJ at 5. Defendant Duncan timely filed an
opposition to Plaintiff’s motion, see Duncan’s [201] Opp’n, and Plaintiff has since filed a reply,
see Pl.’s [213] Reply. Accordingly, Plaintiff’s motion is fully briefed and ripe for the Court’s
review.
1. Choice of Law
Because this is a diversity case, the Court must first determine which jurisdiction’s
substantive law applies before it may evaluate the parties’ common law claims on their merits.
Although neither party has directly addressed this question in their briefing on Plaintiff’s motion,
each party supports their arguments by reference to District of Columbia law and neither argues
that the laws of any other jurisdiction should apply. Both parties therefore assume that District of
Columbia law controls. As discussed above, “[t]he Court need not and does not question the
parties’ assumptions on that point.” Davis, 639 F. Supp. 2d at 65; see also CSX Transp., 82 F.3d
at 482-83 (parties may waive choice-of-law arguments); In re Korean Air Lines Disaster, 932
F.2d at 1495 (courts need not address choice of law questions sua sponte ). Accordingly, the
Court shall apply District law to Duncan’s counterclaims.
2. Count One of Duncan’s Counterclaim
Plaintiff first moves for summary judgment with respect to Count One of Duncan’s
Counterclaim, which alleges fraud, fraud in the inducement, misrepresentation, and negligent
misrepresentation based on statements allegedly made by Plaintiff in securing the FMV Loan and
which Plaintiff now asserts are incorrect. See Duncan’s Ans. & Counterclaim, ¶¶ 25-40. For
example, Duncan alleges that Plaintiff advised him that the Condo located in the District of
41
Columbia was not her principal residence, but that she now indicates that this statement was not
true at the time made. See id. ¶ 29. According to Duncan, Plaintiff “intentionally and recklessly
misrepresented” this and other material facts to him, and he relied on those false statements to his
detriment in determining how to document the loan and form the LLC. See id. ¶ 39 (“As a result
. . . Plaintiff fraudulently induced Duncan to form the LLC, prepare documentation for a
commercial loan for Plaintiff upon which his client [FMVILA] relied, and for FMV to make a
contract, for which Duncan suffered damages in an amount to be determined, but not less than
$10,000.00.”).
Notwithstanding the language in Duncan’s Counterclaim, Plaintiff argues in her opening
motion that Count One is premised only on Plaintiff’s actions with respect to the filing of the
instant lawsuit. See Pl.’s [174] MSJ at 6. She does so based on Duncan’s testimony at
deposition that his claims for fraud and misrepresentation against Plaintiff were based on various
allegedly false statements she included in her complaint in this action. See id. Framed as such,
Plaintiff argues that Duncan’s claim for fraud and misrepresentation must fail because Duncan
has not “made any assertion that he took any action in reliance of any statement contained in Ms.
Juergens’ complaint.” Id. This argument is without merit. While Duncan testified at his
deposition that his claim for fraud and/or misrepresentation was based, at least in part, on
Plaintiff’s statements in her complaint, Duncan’s testimony in discovery did not (and indeed,
could not) amend or modify his Counterclaim as set forth in his pleading. Plaintiff herself is well
aware that the parties may not amend their operative pleadings through discovery, having been
repeatedly advised as much by this Court. See Juergens v. UTS, 652 F. Supp. 2d 51, 63-64
(D.D.C. 2009) (“Plaintiff cannot amend her complaint by merely taking discovery on a subject or
42
by filing a motion for summary judgment; she must amend her complaint in accordance with
Fed. R. Civ. P. 15(a)).15
Having been alerted to the correct nature of the Counterclaim by Duncan’s opposition
briefing, see Duncan’s [201-2] Resp. Stmt. ¶ 3, Plaintiff argues for the first time in her Reply that
Count One nonetheless fails because Duncan suffered no damages from his preparation of the
LLC and FMV Loan documents. Pl.’s [213] Reply at 2. The Court reiterates that it shall not
consider arguments advanced for the first time in reply. See supra at p. 26. Plaintiff did not raise
this particular argument until her reply, and Duncan has not yet had an opportunity to respond.
Nonetheless, because Plaintiff’s argument on this point, if meritorious, appears to be dispositive
of Duncan’s claim for fraud and/or misrepresentation, the Court concludes that the appropriate
course of action at this time is to hold Plaintiff’s motion in abeyance as to Count One of
Duncan’s Counterclaim in order to provide Duncan an opportunity to respond. Such response
shall be filed pursuant to the schedule set forth in the accompanying Order and shall be limited
solely to addressing Plaintiff’s argument, made for the first time in reply, that Count One of
Duncan’s Counterclaim fails due to an absence of damages. In particular, as Duncan has
admitted that his damages on this claim consist only of attorneys’ fees and costs incurred in this
lawsuit, see Duncan’s [201-2] Resp. ¶ 4, he must provide legal authority in support of his
15
Nor would a claim for fraud or misrepresentation based on allegations in Plaintiff’s
Complaint likely succeed under either District of Columbia or Virginia law. See Finkelstein,
Thompson & Loughran v. Hemispherx Biopharma, Inc., 774 A.2d 332, 338 (D.C. 2001) (“Along
with the overwhelming majority of the States, the District of Columbia has long recognized an
absolute privilege for statements made preliminary to, or in the course of, a judicial proceeding,
so long as the statements bear some relation to the proceeding”); Katz v. Odin, Feldman &
Pittleman, P.C., 332 F. Supp. 2d 909, 918-19 (E.D. Va. 2004) (“It is well-settled that words
spoken or written in a judicial or quasi-judicial proceeding are absolutely privileged when
relevant to the subject matter of the proceeding.”).
43
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. The Court shall also provide
Plaintiff an opportunity to reply to Duncan’s response. Accordingly, Plaintiff’s [174] Motion for
Summary Judgment on the Issue of Duncan’s Counterclaim is HELD IN ABEYANCE with
respect to Count One. A schedule for further briefing is set forth in the accompanying Order.
3. Count Two of Duncan’s Counterclaim
Plaintiff also has moved for summary judgment with respect to Count Two of Duncan’s
Counterclaim, which alleges a claim for “abuse of process or malicious prosecution.” See
Duncan’s Ans. & Counterclaim, ¶¶ 41-48. Plaintiff argues that “Duncan’s abuse of process and
malicious prosecution count should be dismissed on summary judgment since Mr. Duncan’s
deposition testimony does not provide any facts upon which this count may be based.” Pl.’s
[174] MSJ at 7. Plaintiff also contends that Duncan’s claims for abuse of process and malicious
prosecution must fail because he has not suffered any legally cognizable damages; specifically,
Plaintiff argues that the only damages Duncan claims as a result of Plaintiff’s actions in this case
are attorneys’ fees, but Duncan has not shown the necessary bad faith required for an award of
attorneys’ fees under the American Rule. Id. at 8-11.
Turning first to Plaintiff’s arguments regarding any claim for malicious prosecution, the
Court finds that Duncan has conceded the motion with respect to this claim. Although Duncan
filed an Opposition to Plaintiff’s motion, which nominally purports to address both Plaintiff’s
arguments regarding Duncan’s malicious prosecution and abuse of process claims, it is apparent
upon closer review that Duncan has failed to provide any substantive response to Plaintiff’s
motion with respect to his claim for malicious prosecution. Rather, Duncan’s opposition focuses
44
exclusively on Plaintiff’s arguments regarding his abuse of process claim. See Duncan’s [201]
Opp’n at 5-7. “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.” Hopkins v. Women’s Div.,
General Bd. of Global Ministries, 284 F. Supp. 2d 15, 25 (D.D.C. 2003), aff’d 98 Fed. Appx. 8
(D.C. Cir. 2004); see also Franklin v. Potter, 600 F. Supp. 2d 38, 60 (D.D.C. 2009) (treating
defendant’s argument in motion for summary judgment as conceded where plaintiff failed to
address it in his response). Accordingly, because Duncan had the opportunity to respond to
Plaintiff’s arguments regarding his malicious prosecution claim, but did not do so, the Court
shall construe his failure as a concession with respect to Plaintiff’s motion for summary
judgment on that claim. See Hopkins, 284 F. Supp. 2d at 25.
Duncan has, however, opposed the merits of Plaintiff’s arguments regarding his abuse of
process claim, and the Court therefore turns now to consider the parties’ substantive arguments
on that point. Plaintiff argues that she is entitled to summary judgment on Duncan’s claim for
abuse of process because he has not proffered facts sufficient to support a finding that Plaintiff
has used the legal system to accomplish an impermissible end. Pl.’s [174] MSJ at 7.
Significantly, while Duncan asserts that he “has demonstrated facts sufficient to bring in dispute
whether there has been an abuse of process,” Duncan’s [201] Opp’n at 5, he has not directed the
Court to any specific facts allegedly in support of his abuse of process claim. Rather, Duncan
simply repeats his allegation, as contained in his Counterclaim, that Plaintiff brought the instant
45
lawsuit for “leverage purposes.” See id. at 6. He points to no record support for that assertion.16
Discovery is now closed, and Duncan can no longer rely on unsupported allegations to support
his claim for abuse of process. Accordingly, Plaintiff’s [174] Motion for Summary Judgment on
the Issue of Duncan’s Counterclaim is GRANTED with respect to Count Two, as Duncan has
conceded Plaintiff’s motion with respect to his claim for malicious prosecution and has failed to
proffer facts sufficient to support his claim for abuse of process.17
To summarize, Plaintiff’s [174] Motion for Summary Judgment on the Issue of Duncan’s
Counterclaim is GRANTED-IN-PART and HELD IN ABEYANCE-IN-PART. Specifically,
Plaintiff’s motion is GRANTED with respect to Count Two of Duncan’s Counterclaim but is
HELD IN ABEYANCE with respect to Count One. A schedule for further briefing is set forth in
the accompanying Order.
IV. CONCLUSION
For the reasons set forth above, Duncan’s [185/186] Motion for Partial Summary
Judgment is GRANTED-IN-PART, DENIED-IN-PART, and HELD IN ABEYANCE-IN-PART.
16
The only attempt by Duncan to cite to record evidence in support of this allegation is
his reference to his own “testi[mony] and alleg[ation] that the whole basis for the allegations
made against him in the First Amended and Second Amended Complaints, followed by the new
claims in the 4th Amended Complaint, . . . was for leverage purposes.” See Duncan’s [201]
Opp’n at 6. Duncan, however, provides no citation to the claimed deposition testimony. See id.
Moreover, even assuming that Duncan did testify at deposition that he believed the instant
lawsuit was brought for “leverage purposes,” Duncan’s “own unsubstantiated beliefs amount to
nothing more than hearsay, self-serving statements and speculation, and are insufficient as such
to defeat summary judgment.” See Hinson v. Merrit Educ. Ctr., 579 F. Supp. 2d 89, 109 n. 5
(D.D.C. 2008).
17
Given the Court’s decision above, it need not reach Plaintiff’s alternative argument that
Duncan’s claims for abuse of process and malicious prosecution fail because he has not suffered
any legally cognizable damages.
46
Specifically, the motion is GRANTED insofar as Duncan argues that no attorney-client
relationship existed between himself and Plaintiff, and it is also GRANTED with respect to
Count XVII (Breach of Contract) of Plaintiff’s Fourth Amended Complaint. It is denied,
however, with respect to Counts XXV (Fraud), XXVI (Civil Conspiracy), XXXI (CPPA), and
XXXII (CCSOA) of Plaintiff’s Fourth Amended Complaint. Finally, the motion is HELD IN
ABEYANCE insofar as Duncan urges that he is entitled to summary judgment on the underlying
claims and/or Plaintiff’s punitive damages requests set forth in Counts XVIII (Legal
Malpractice), XIX (Breach of Fiduciary Duty), XX (Negligence), XXI (Breach of Contract),
XXII (Breach of Fiduciary Duty), and XXIII (Negligence), pending further briefing by the
parties.
Second, Plaintiff’s [174] Motion for Summary Judgment on the Issue of Duncan’s
Counterclaim is GRANTED-IN-PART and HELD IN ABEYANCE-IN-PART. Specifically,
Plaintiff’s motion is GRANTED with respect to Count Two of Duncan’s Counterclaim but is
HELD IN ABEYANCE with respect to Count One, pending further briefing by the parties. An
appropriate Order accompanies this Memorandum Opinion.
Date: February 12, 2010
/s/
COLLEEN KOLLAR-KOTELLY
United States District Judge
47