Feng v. Lim ( 2011 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
JIA DI FENG,
Plaintiff,
v.
SEE-LEE LIM
Civil Action No. 10-1155 (JEB)
and
ALLSTATE INSURANCE COMPANY,
Defendants.
MEMORANDUM OPINION AND ORDER
Plaintiff Jia Di Feng alleges that he paid Defendant See-Lee Lim, who worked as an
Allstate Insurance Company agent, $10,000 to help him obtain a green card. Lim took the
money, but did nothing to assist him with his immigration status. Unable to recover his money,
Plaintiff filed suit against Lim and Allstate in D.C. Superior Court on June 8, 2010, alleging
claims of fraudulent misrepresentation, breach of contract, negligent training and supervision,
gross negligence, unlawful trade practices, and a violation of the D.C. Consumer Protection
Procedures Act. In July 2010, Allstate removed this case to federal court and filed a Motion to
Dismiss. Lim separately moved to dismiss. Now before the Court are Defendants’ Motions to
Dismiss for lack of personal jurisdiction and failure to state a claim.1
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The Court has reviewed Defendants’ Motions, Plaintiff’s Oppositions, and Defendant
Allstate’s Reply.
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I. Background
Plaintiff is a D.C. resident and an immigrant to the United States. Compl. at ¶¶ 1, 22. He
is also an Allstate client who has, since about 2005, purchased a variety of insurance policies
from his Allstate agent and one-time friend, Defendant Lim. Id. at ¶¶ 4-5. Plaintiff alleges that
on June 18, 2007, Lim approached him with a proposal – in exchange for $30,000, she would
help Plaintiff become a legal resident of the United States. Id. at ¶¶ 6, 8. Plaintiff met with Lim
and a man he was told was an attorney. Id. at ¶ 10. Plaintiff alleges that he was told this
attorney knew someone in the Baltimore Immigration Office who could expedite Plaintiff’s
immigration matter. Id. Plaintiff further alleges that Lim requested a $10,000 down payment,
which she promised to return to him if she could not successfully help him obtain a green card.
Id. at ¶¶ 8, 11. Plaintiff states that he paid Lim $5,200 in cash and $4,800 by check in exchange
for her assistance. Id. at ¶ 9.
Plaintiff complains that Lim intentionally misled him about what she could and would do
to help him. Id. at ¶ 20. First, Plaintiff alleges that the attorney he was told would be assisting
him with his immigration matter had in fact been disbarred. Id. at ¶¶ 15, 20. Next, Plaintiff
alleges that Lim misrepresented her abilities to help Plaintiff with his immigration status when
she was in fact neither an attorney nor “an accredited representative [of] the INS.” Id. at ¶¶ 15,
18. Finally, Plaintiff alleges that Lim took his money but never did anything to help him, and
now she refuses to refund him his money. Id. at ¶¶ 12, 17.
Plaintiff states that he trusted Lim to help him in part because of their friendship, but also
because she is a licensed insurance agent. Id. at ¶¶ 11, 19. Moreover, Plaintiff alleges that he
trusted the name “Allstate” – the company that Plaintiff alleges is Lim’s employer. Id. at ¶¶ 3,
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34. Lim’s actions, Plaintiff claims, represent a failure of Allstate to properly train and supervise
its agents. Id. at ¶¶ 27-28.
Plaintiff pleads each of five counts against both Lim and Allstate – fraudulent
misrepresentation, breach of contract, negligence (negligent training and supervision against
Allstate and gross negligence against Lim), and two counts of unlawful trade practices in
violation of the D.C. Consumer Protections Procedures Act – and requests more than $1,010,000
in damages. Defendant Lim filed her answer in D.C. Superior Court on June 29, 2010.
On July 8, 2010, Allstate removed this case to federal court. Plaintiff is a citizen of D.C.;
Lim is a citizen of Virginia; and Allstate, an Illinois Corporation with its principal place of
business in Northbrook, Illinois, is a citizen of Illinois. This Court therefore has diversity
jurisdiction over this case pursuant to 28 U.S.C. § 1332.
Each Defendant has now filed a Motion to Dismiss in this Court. Lim moves to dismiss
under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction and under Rule
12(b)(6) for failure to state a claim. Allstate also moves to dismiss under Rule 12(b)(6).
II. Legal Standard
A. Rule 12(b)(2) – Personal Jurisdiction
To survive a motion to dismiss under Rule 12(b)(2), Plaintiff bears the burden of
“establishing a factual basis for the [Court’s] exercise of personal jurisdiction over the
defendant.” Crane v. New York Zoological Society, 894 F.2d 454, 456 (D.C. Cir. 1990) (citing
Reuber v. United States, 750 F.2d 1039, 1052 (D.C. Cir. 1984), overruled on other grounds by
Kauffman v. Anglo-American School of Sofia, 28 F.3d 1223 (D.C. Cir. 1994)). To meet this
burden, Plaintiff “must allege specific facts connecting the defendant with the forum.” Capital
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Bank Int’l Ltd. v. Citigroup, Inc., 276 F. Supp. 2d 72, 74 (D.D.C. 2003) (citing Second
Amendment Foundation v. U.S. Conference of Mayors, 274 F.3d 521, 524 (D.C. Cir. 2001)).
In determining whether a basis for personal jurisdiction exists, “factual discrepancies
appearing in the record must be resolved in favor of the plaintiff.” New York Zoological
Society, 894 F.2d at 456 (citing Reuber, 750 F.2d at 1052). Unlike with a motion to dismiss
under Rule 12(b)(6), the Court “may consider materials outside the pleadings in deciding
whether to grant a motion to dismiss for lack of jurisdiction.” Jerome Stevens Pharms., Inc. v.
FDA, 402 F.3d 1249, 1253 (D.C. Cir. 2005).
B. Rule 12(b)(6) – Failure to State a Claim
Rule 12(b)(6) provides for the dismissal of an action where a complaint fails “to state a
claim upon which relief can be granted.” When the sufficiency of a complaint is challenged
under Rule 12(b)(6), the Court must “treat the complaint’s factual allegations as true . . . and
must grant plaintiff ‘the benefit of all inferences that can be derived from the facts alleged.’”
Sparrow v. United Air Lines, Inc., 216 F.3d 1111, 1113 (D.C. Cir. 2000) (quoting Schuler v.
United States, 617 F.2d 605, 608 (D.C. Cir. 1979)) (internal citation omitted). The notice
pleading rules are “not meant to impose a great burden upon a plaintiff.” Dura Pharms., Inc. v.
Broudo, 544 U.S. 336, 347 (2005). But while “detailed factual allegations” are not necessary to
withstand a Rule 12(b)(6) motion, Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007), “a
complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is
plausible on its face.’” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Twombly, 550
U.S. at 570). The Court need not accept as true, however, “‘a legal conclusion couched as a
factual allegation,’” nor an inference unsupported by the facts set forth in the Complaint.
Trudeau v. Fed. Trade Comm’n, 456 F.3d 178, 193 (D.C. Cir. 2006) (quoting Papasan v. Allain,
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478 U.S. 265, 286 (1986)). Plaintiff must put forth “factual content that allows the court to draw
the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 129 S.Ct.
at 1949. Though a plaintiff may survive a 12(b)(6) motion even if “recovery is very remote and
unlikely,” Twombly, 550 U.S. at 556 (citing Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)), the
facts alleged in the complaint “must be enough to raise a right to relief above the speculative
level.” Id. at 555.
III. Analysis
The Court will first address the issue of personal jurisdiction and then analyze each count
as it relates to each Defendant.
A. Jurisdiction
Where, as here, subject matter jurisdiction “is based on diversity of citizenship, [courts in
this district] look to District law to determine whether there is a basis for exercising personal
jurisdiction over” the defendant. New York Zoological Society, 894 F.2d at 455 (citing Crane v.
Carr, 814 F.2d 758, 762 (D.C. Cir. 1987)). Under the District of Columbia’s long-arm statute,
“[a] District of Columbia court may exercise personal jurisdiction over a person, who acts
directly or by an agent, as to a claim for relief arising from the person’s – (1) transacting any
business in the District of Columbia . . . .” D.C. CODE § 13-423(a)(1).
Defendant Lim raises the defense of lack of personal jurisdiction both in her Answer and
in her Motion to Dismiss. She argues, “This Court lacks Jurisdiction because none of the
event[s] occurred in the District of Columbia if they occurred at all.” Lim Answer at ¶ 2. In her
Motion to Dismiss, Lim alleges, “All the events described in the Plaintiff’s complaint occurred
on June 18, 2008 in Silver Spring, Maryland.” Lim Mot. at 3. Specifically, Lim alleges she
“travelled to Silver Spring, Maryland at the Lees express carryout restaurant to pick up a check
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from Mr. Feng $4,800.00 and cash $200.00” as reimbursement for money she lent Plaintiff
earlier that day. Id. at 4.
Plaintiff conversely alleges that he paid Lim in the District of Columbia. Specifically,
Plaintiff states in his Opposition to Lim’s Motion to Dismiss that he “rendered the check of
$4,800.00 and $5,000.00 cash payment to Ms. Lim in the District of Columbia. The check was
under Plaintiff’s name and his address is in the District of Columbia.” Plf. Opp. to Lim Mot. at
6. To survive a motion to dismiss, Plaintiff need only make a prima facie showing that the Court
has jurisdiction over Defendant. See Mwani v. Bin Laden, 417 F.3d 1, 7 (D.C. Cir. 2005). In
making such a showing, Plaintiff is “not limited to evidence that meets the standards of
admissibility required by the district court. Rather, [he] may rest [his] argument on [his]
pleadings, bolstered by such affidavits and other written materials as [he] can otherwise obtain.”
Id.; see also U.S. v. Smithfield Foods, Inc., 332 F. Supp. 2d 55, 59-60 (D.D.C. 2004) (“in
resolving motions to dismiss brought under Rule 12(b)(2), . . . courts are free to consider
relevant materials outside the pleadings.”) (citation omitted).
The factual allegations contained in Plaintiff’s Opposition to Lim’s Motion to Dismiss do
not carry the same weight as would an affidavit from Plaintiff; nevertheless, the Court finds
them, at this stage of the proceedings, sufficient to support the conclusion that Lim transacted
business in the District of Columbia and is thereby subject to the District’s long-arm statute.
Although the Court preliminarily resolves the discrepancy about the location of events in favor
of Plaintiff, this decision may be revisited in the event that discovery reveals that the parties did
not conduct any of their business in the District of Columbia.
Even if the events described in Plaintiff’s Complaint transpired in Maryland rather than
the District, this Court may nevertheless have personal jurisdiction over Lim. District of
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Columbia courts may assert personal jurisdiction over a person who “caus[es] tortious injury in
the District of Columbia by an act or omission outside the District of Columbia if he regularly
does or solicits business, engages in any other persistent course of conduct, or derives substantial
revenue from goods used or consumed, or services rendered, in the District of Columbia.” D.C.
CODE § 13-423(a)(4). Lim admits in her Motion to Dismiss that her “business [is] 98%
conducted in Virginia and Maryland and other jurisdictions,” Lim Mot. at 6, suggesting that she
may regularly conduct business, if a minority of her overall practice, in the District.
B. Count I: Fraudulent Misrepresentation
To successfully plead a claim of fraudulent misrepresentation under D.C. law,2 a plaintiff
must establish, by clear and convincing evidence: (1) a false representation; (2) made in
reference to a material fact; (3) with knowledge of its falsity; (4) with the intent to deceive; and
(5) an action taken in reliance upon the representation. See Fennell v. AARP, No. 09-01976,
2011 WL 899334, at *10 (D.D.C., Mar. 16, 2011) (citing In re Estate of McKenney, 953 A.2d
336, 342 (D.C. 2008)); Nader v. Allegheny Airlines, Inc., 626 F.2d 1031, 1036 (D.C. Cir. 1980).
Under Federal Rule of Evidence 9(b), a plaintiff must also “state with particularity the
circumstances constituting fraud.” To fulfill this requirement, Plaintiff “‘must state the time,
place and content of the false misrepresentations, the fact misrepresented and what was retained
or given up as a consequence of the fraud.’” Kowal v. MCI Communications Corp., 16 F.3d
2Because Plaintiff is a D.C. resident, see Compl. at ¶ 1, and because he alleges that he
“rendered the check of $4,800.00 and $5,000.00 cash payment to Ms. Lim in the District of
Columbia[, and t]he check was under Plaintiff’s name and his address [is] in the District of
Columbia,” Plf. Opp. to Lim Mot. at 6, the Court will apply D.C. law at this stage. To the extent
it is revealed during the course of discovery that it is appropriate to apply the law of a different
jurisdiction, such as Maryland or Virginia, the parties are free to raise the issue.
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1271, 1278 (D.C. Cir. 1994) (quoting United States v. Cannon, 642 F.2d 1373, 1385 (D.C. Cir.
1981).
1. See-Lee Lim
Defendant Lim argues in her Motion to Dismiss that “Plaintiff’s fraudulent
misrepresentation claim fails because he does not plead any of the elements necessary for a claim
of fraud . . . .” Lim Mot. at 3. Lim does not elaborate, perhaps because there is little to argue on
this issue. It is clear that Plaintiff has sufficiently pled this claim.
Plaintiff alleges that on June 18, 2007, Lim made several representations regarding
material facts that turned out to be false. Plaintiff pleads that Lim “presented herself to practice
immigration matter [sic]” and “represent[ed] that she [could] obtain [] legal status for Mr. Feng.”
Compl. at ¶¶ 31, 18. Plaintiff’s pleadings suggest that Lim made statements to the effect that her
friend was an attorney, and that he “knew someone in the Baltimore Immigration office and
could expedite Feng’s immigration matter.” Id. at ¶ 10. Plaintiff further alleges that Lim
“promised to return full refunds to Mr. Feng if she could not obtain ‘legal status’ for Mr. Feng.”
Id. at ¶ 8. Plaintiff also alleges that Lim acted with the requisite intent to deceive: “She
intentionally misled the Plaintiff when she took the money from Plaintiff.” Id. at ¶ 20. Finally,
Plaintiff adequately alleges that he acted in reliance on Lim’s misrepresentations and suffered
damages as a result. Id. at ¶¶ 11, 17.
These allegations clear the pleadings bar. See Barnstead Broadcasting Corp. v. Offshore
Broadcasting Corp., 886 F. Supp. 874, 883 (D.D.C. 1995) (“an allegation that a party falsely
stated existing intentions is sufficient to state a claim” for fraudulent misrepresentation); In re
National Student Marketing Litigation, 413 F. Supp. 1156, 1158 (D.D.C. 1976) (Rule 9(b)
“requires only general averments concerning the defendant’s knowledge or intent.”). The count
may therefore proceed.
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2. Allstate
Plaintiff’s fraudulent misrepresentation claim against Allstate, however, is another
matter. Allstate correctly notes in its Motion to Dismiss that Plaintiff’s Complaint “is devoid of
any allegations regarding any alleged fraudulent misrepresentation by Allstate”; in fact, Plaintiff
“does not allege that Allstate made any representations” whatsoever relevant to this case.
Allstate Mot. at 5. In light of this, the Court infers that any fraudulent misrepresentation claim
Plaintiff intends to assert against Allstate must be based on a theory of vicarious liability.
The doctrine of respondeat superior “makes an employer liable for those torts of his
employees committed within the scope of their employment.” Jordan v. Medley, 711 F.2d 211,
213 (D.C. Cir. 1983); see also RESTATEMENT (THIRD) OF AGENCY § 2.04 (“An employer
is subject to liability for torts committed by employees while acting within the scope of their
employment.”). The D.C. Circuit has observed that D.C. courts “apply the scope-of-employment
test very expansively, in part because doing so usually allows an injured tort plaintiff a chance to
recover from a deep-pocket employer rather than a judgment-proof employee.” Harbury v.
Hayden, 522 F.3d 413, 422 n.4 (D.C. Cir. 2008) (citing RESTATEMENT (THIRD) OF
AGENCY § 2.04 cmt. b (2006) (“Respondeat superior . . . reflects the likelihood that an
employer will be more likely to satisfy a judgment.”)). As a result, application of the “scope-of-
employment test often is akin to asking whether the defendant merely was on duty or on the job
when committing the alleged tort.” Id.
As an initial matter, the parties vigorously dispute whether Defendant Lim is an
employee of Allstate. Plaintiff alleges in his Complaint, “Upon information and belief, Allstate
insurance hires their agents and there is employer-employee relationship between Allstate and
See-Lee Lim.” Compl. at ¶ 3. Allstate argues that Lim’s employment status is a legal question,
Allstate Reply at 3, and cites a litany of cases, none of them from this Circuit, for the proposition
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that “numerous courts and federal agencies have confirmed that Allstate agents, like Lim, are
independent contractors.” Allstate Mot. at 7.
Yet the Court need not decide the issue here because Plaintiff fails to allege any facts to
suggest that, even if Lim were an Allstate employee, she was acting within the scope of this
employment at the time she offered to help Plaintiff with his immigration status. Indeed, as
Allstate argues, “Plaintiff does not allege . . . that Allstate is in the business of providing
assistance in immigration matters” or that Lim’s offer of assistance with Plaintiff’s immigration
issues was in any way connected to her duties as an insurance agent. Allstate Reply at 4. The
fact that Lim was, for some purposes, an Allstate agent does not convert her into one for all of
her actions. Since Plaintiff fails to plead facts sufficient to support a claim against Allstate of
respondeat superior liability for Defendant Lim’s allegedly fraudulent misrepresentations, the
Court will dismiss this count against Allstate.
C. Count II: Breach of Contract
To adequately plead a breach of contract claim, a plaintiff must allege facts showing: (1)
a valid contract between the parties; (2) an obligation or duty arising out of the contract; (3) a
breach of that duty; and (4) damages caused by the breach. See Miniter v. Sun Myung Moon,
736 F. Supp. 2d 41, 49 (D.D.C. 2010); Mesumbe v. Howard Univ., 706 F. Supp. 2d 86, 94
(D.D.C. 2010); Tsintolas Realty Co. v. Mendez, 984 A.2d 181, 187 (D.C. 2009). Both
Defendants argue that Plaintiff has failed to allege facts sufficient to support a claim for breach
of contract.
1. See-Lee Lim
On this subject, Defendant Lim merely asserts, “Plaintiff’s breach of contract claim
likewise fails because Plaintiff has not pleaded any facts showing that a contractual duty existed
or that Allstate or the Defendant Lim breached a contractual duty.” Lim Mot. at 3.
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The Court disagrees and finds that Plaintiff has adequately pled facts sufficient to survive
a motion to dismiss. Plaintiff alleges that “[o]n June 18, 2007, Ms. Lim solicited [] immigration
business from Mr. Feng for the total price of $30,000.00” and “demanded and received [a] down
payment of $10,000” from Plaintiff. Compl. at ¶¶ 6-7. Plaintiff further alleges that he “entrusted
Defendant Lim with $10,000.00 . . . to obtain [a] ‘green card.’” Id. at ¶ 11. Additionally,
Plaintiff alleges that “Ms. Lim wrote a Chinese receipt to Mr. Feng” in which she “promised to
return full refunds to Mr. Feng if she could not obtain ‘legal status’ for Mr. Feng.” Id. at ¶ 8.
Plaintiff alleges that he paid Lim $10,000 ($5,200 in cash and $4,800 by check), but that
“Defendant Lim has never performed any work.” Id. at ¶¶ 9, 11-12. These allegations are
clearly sufficient.
2. Allstate
Allstate moves to dismiss Plaintiff’s breach of contract claim on the ground that “Plaintiff
does not allege, nor could he, that any contract exists between Plaintiff and Allstate relating to
Plaintiff’s immigration status.” Allstate Mot. at 5. Plaintiff responds that he has adequately
alleged the existence of a contract between himself and Lim, and that “[w]hether the contract
entered by Ms. Lim is on behalf of Allstate and whether Allstate reaped the benefits of Ms.
Lim[‘s] work product[] should be decided by the records and evidence discovered . . . .” Plf.
Opp. to Allstate Mot. at 8.
The question, once again, centers on whether Allstate should be vicariously liable for
Lim’s alleged breach of contract. As such, Plaintiff’s breach of contract claim suffers from the
same deficiencies as his fraudulent misrepresentation claim against Allstate. Even assuming that
Lim is an Allstate employee, Plaintiff alleges no facts to suggest that she was acting within the
scope of her alleged employment at the time she “solicited [] immigration business from Mr.
Feng.” Compl. at ¶ 6. Plaintiff does not allege that he signed any sort of written document
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relating to his immigration issues with Allstate’s name on it; rather, the only written
documentation Plaintiff alleges exists documenting his contract with Lim is a “Chinese receipt”
hand-written by Lim. Id. at ¶ 8.
The closest Plaintiff’s allegations get to implicating Allstate in the immigration contract
is Plaintiff’s statement that “[o]ver the years, Plaintiff has also introduced other friends and
family members to Defendant Lim for all other matters. Allstate is the beneficiary of Plaintiff
and Defendant Lim’s business relationship.” Id. at ¶ 16. The fact that Plaintiff may have
referred others to Allstate based on his prior experiences with an insurance agent there does not
help to prove that Lim was acting within the scope of her alleged employment as an Allstate
agent at the time she entered into a contract with Plaintiff to help with immigration, rather than
insurance, matters. This count against Allstate will thus be dismissed.
D. Count III: Negligence
Plaintiff appears to assert two separate counts based on theories of negligence: gross
negligence against Lim, and negligent training and supervision against Allstate.
1. See-Lee Lim
To state a claim for negligence under District of Columbia law, Plaintiff must allege facts
sufficient to prove the existence of a duty, breach of that duty, causation, and damages. See Art
Metal-U.S.A., Inc. v. U.S., 753 F.2d 1151, 1157 (D.C. Cir. 1985); Powell v. District of
Columbia, 634 A.2d 403, 406 (D.C. 1993) (affirming trial court’s dismissal of plaintiff’s
negligence claim for failure to state a claim). The duty required for a negligence claim is the
standard of care. See St. Paul Mercury Ins. Co. v. Capitol Sprinkler Inspection, Inc., 573 F.
Supp. 2d 152, 175 (D.D.C. 2008). While an ordinary negligence claim can be premised on a
simple breach of that standard of care that causes damage to the plaintiff, “gross negligence
implies an ‘extreme departure from the ordinary standard of care.’” Wager v. Pro, 603 F.2d
121005, 1010 (D.C. Cir. 1979) (quoting WILLIAM L. PROSSER, LAW OF TORTS § 8 at 184 (4th ed.
1971)).
Plaintiff does not even respond to Lim’s Motion on this count. In fact, Plaintiff’s Gross
Negligence claim states in its entirety: “Plaintiff incorporated all the above paragraphs. In
addition, Plaintiff believes that Defendant Lim acted [with] gross negligence and presented that
she could obtain ‘legal status’ for Plaintiff in 2007.” Compl. at ¶ 30. Since Plaintiff pleads
neither the existence of a duty nor the particular standard of care owed to him, this claim cannot
stand. The only possible duty is that created by the parties’ entry into the alleged contract for
immigration assistance – the breach of which already forms the basis for Plaintiff’s breach of
contract claim. A negligence claim based solely on a breach of the duty to fulfill one’s
obligations under a contract is duplicative and unsustainable. See, e.g., Choharis v. State Farm
Fire and Casualty Co., 961 A.2d 1080, 1089 (D.C. 2008) (“[T]he tort must exist in its own right
independent of the contract, and any duty upon which the tort is based must flow from
considerations other than the contractual relationship. The tort must stand as a tort even if the
contractual relationship did not exist.”). Recovery on such a negligence claim is also barred
under D.C. law by the economic loss doctrine. See Potomac Plaza Terraces, Inc. v. QSC
Products, Inc., 868 F. Supp. 346, 354 (D.D.C. 1994) (adopting economic loss doctrine); see also
RLI Ins. Co. v. Pohl, Inc. of America, 468 F. Supp. 2d 91, 94 (D.D.C. 2006) (quoting Furash &
Co. v. McClave, 130 F. Supp. 2d 48, 56 (D.D.C. 2001) (finding that “the District of Columbia
‘has not authorized tort recovery for purely economic losses in a contract setting.’”)).
Count III will thus be dismissed as to Lim.
2. Allstate
Plaintiff’s negligence claim against Allstate is based on a theory of negligent training and
supervision. Under D.C. law, an employer must “‘use reasonable care to select employees
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competent and fit for the work assigned to them and to refrain from retaining the services of an
unfit employee. When an employer neglects this duty and as a result injury is occasioned to a
third person, the employer may be liable even though the injury was brought about by the willful
act of the employee beyond the scope of employment.’” Pietsch v. McKissack & McKissack,
677 F. Supp. 2d 325, 329 (D.D.C. 2010) (quoting Griffin v. Acacia Life Ins. Co., 925 A.2d 564,
575 (D.C. 2007)). To successfully state a claim for negligent supervision under D.C. law, a
Plaintiff must allege facts that show “the employer ‘knew or should have known its employee
behaved in a dangerous of otherwise incompetent manner, and that the employer, armed with
that actual or constructive knowledge, failed to adequately supervise the employee.’” Simms v.
District of Columbia, 699 F. Supp. 2d 217, 226 (D.D.C. 2010) (quoting Phelan v. City of Mt.
Rainier, 805 A.2d 930, 937-38 (D.C. 2002)). Additionally, “the claim must be predicated on a
‘common law cause of action or duties otherwise imposed by common law.’” Pietsch, 677 F.
Supp. 2d at 329 (quoting Griffin, 925 A.2d at 576).
In support of his negligent training and supervision claim, Plaintiff pleads that, “[a]t all
times, Allstate should provide training and supervision to make sure their agents [] act within the
scope of employment,” and that “Allstate has not conduct[ed] enough supervision toward[] their
agents to assure that they will not act outside the scope of employment.” Compl. at ¶¶ 27-28.
Under the heading “Respondeat Superior,” Plaintiff further alleges that “Allstate Insurance
cannot use the ‘respondeat superior’ to avoid liability because Allstate has benefited and reap[ed]
the benefits of Defendant[] Lim’s solicitation of business[]. In fact, due to the lack of
supervision, Allstate should have and could have audit[ed]/supervise[d] their employees.” Id. at
¶ 29.
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Allstate argues that, “because Allstate was not Lim’s employer, Plaintiff’s claim of
negligent training and supervision fails as a matter of law.” Allstate Mot. at 8. Such a position is
infirm for two reasons. First, for the purpose of these Motions to Dismiss, the Court will accept
as true Plaintiff’s factual assertion that Lim was an Allstate employee. See Doe v. Exxon Mobil
Corp., 573 F. Supp. 2d 16, 24 (D.D.C. 2008) (“[T]he existence of a master-servant relationship
turns on control, which is a question of fact typically left to the jury.”) (internal citation
omitted)); see also Safeway Stores, Inc. v. Kelly, 448 A.2d 856, 860 (D.C. 1982) (“Determining
whether a master and servant relationship exists depends upon the particular facts of each
case.”). Second, other D.C. courts have indicated the lack of a strict employer-employee
relationship is not in all cases a bar to a negligent supervision claim. See Brown v. Argenbright
Sec., Inc., 782 A.2d 752, 760 n.11 (D.C. 2001) (“Although Giles [v. Shell Oil Corp., 487 A.2d
610 (D.C. 1985)] and other cases discuss negligent supervision in the context of an employer-
employee relationship and frequently use the term ‘employee,’ it is clear from the Restatement
and other authorities that a claim of negligent supervision does not require proof that the
supervised person was also an employee or agent.”); Carroll v. Fremont Investment & Loan, 636
F. Supp. 2d 41, 54 (D.D.C. 2009) (“To prevail on a negligent supervision claim, the plaintiff
need not prove that the party supervised was an employee or agent of the defendant.”); but see
Simms, 699 F. Supp. 2d at 226 (“Here, there is no alleged ‘supervision’ in the negligent
supervision claim. Masi was not employed by the defendant. Therefore, it is impossible for
defendant to have ‘failed to adequately supervise the employee.’ . . . For that reason, plaintiff’s
negligent supervision claim must fail.”) (quoting Phelan, 805 A.2d at 937). Because, at this
point, the Court accepts Plaintiff’s allegation that Lim is an employee of Allstate, the Court need
not yet reach this second question.
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There is, however, another problem with Plaintiff’s negligent supervision claim: he has
not pled enough facts to establish the elements of the count. Specifically, Plaintiff has not
alleged that Allstate “knew or should have known” Lim “behaved in a dangerous or otherwise
incompetent manner” or that Allstate, “armed with that actual or constructive knowledge, failed
to adequately supervise” Lim. Simms, 699 F. Supp. 2d at 226 (internal citations omitted).
Plaintiff’s conclusory allegations that Allstate could have and should have more closely
supervised Lim are insufficient to state a claim for negligent supervision under D.C. law.
Dismissal of the count, however, seems draconian at this stage of the proceedings, given
what may be a remediable omission. As a result, the Court will dismiss Plaintiff’s negligent
supervision claim without prejudice so that Plaintiff may have the opportunity to amend his
Complaint, if he can in good faith do so.
E. Counts IV and V: Unlawful Trade Practices under the CPPA
Counts IV and V appear to be requests for different remedies for the same statutory
violation – a claim for the use of unlawful trade practices under the District of Columbia
Consumer Protection Procedures Act, D.C. Code § 28-3901, et seq. (“CPPA”).
Section 28-3904 of the CPPA prohibits “unlawful trade practices” and states in relevant
part:
It shall be a violation of this chapter, whether or not any consumer
is in fact misled, deceived or damaged thereby, for any person to:
(a) represent that goods or services have a source, sponsorship,
approval, certification, accessories, characteristics, ingredients,
uses, benefits, or quantities that they do not have;
(b) represent that the person has a sponsorship, approval, status,
affiliation, certification, or connection that the person does not
have;
...
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(e) misrepresent as to a material fact which has a tendency to
mislead;
(f) fail to state a material fact if such failure tends to mislead.
D.C. CODE §§ 28-3904(a)-(b), (e)-(f).
The CPPA provides consumers with a private cause of action to redress a violation of §
28-3904. Section 28-3905(k)(1) provides:
A person, whether acting for the interests of itself, its members, or
the general public, may bring an action under this chapter in the
Superior Court of the District of Columbia seeking relief from the
use by any person of a trade practice in violation of a law of the
District of Columbia and may recover or obtain the following
remedies:
(A) treble damages . . . ;
(B) reasonable attorney’s fees;
(C) punitive damages;
(D) an injunction against the use of the unlawful trade practice;
(E) in representative actions, additional relief as may be necessary
to restore to the consumer money or property, real or personal,
which may have been acquired by means of the unlawful trade
practice; or
(F) any other relief which the court deems proper.
1. See-Lee Lim
Lim moves to dismiss Counts IV and V on the ground that “Plaintiff’s claim under the
CPPA fail[s] because he fails to plead any facts whatsoever showing that Allstate or the
Defendant Lim violated any provisions of that statu[t]e.” Lim Mot. at 3. While Lim does not
elaborate, Allstate raises an argument that is relevant to Lim’s Motion – namely, that Plaintiff
does not constitute a “consumer” within the meaning of the CPPA. Allstate Mot. at 11. The
CPPA defines a “consumer” as “a person who does or would purchase, lease (from), or receive
consumer goods or services . . . .” § 28-3901(a)(2). “Goods and services” are defined as “any
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and all parts of the economic output of society, at any stage or related or necessary point in the
economic process, and includes consumer credit, franchises, business opportunities, real estate
transactions, and consumer services of all types.” § 28-3901(a)(7).
In the present case, Plaintiff alleges that he contracted to purchase a service from Lim –
i.e., assistance in obtaining a green card. Compl. at ¶ 11. Given the broad definition of “goods
and services” contained in § 28-3901(a)(7) and Plaintiff’s allegations that he contracted with Lim
for a service in exchange for $10,000, the Court finds that Plaintiff has alleged the facts
necessary to establish his status as a consumer for the purpose of these Motions to Dismiss.
Plaintiff has also sufficiently alleged the facts necessary to state a claim against Lim for
engaging in unlawful trade practices under the CPPA. For example, it is a violation of the CPPA
for a person to “represent that the person has a sponsorship, approval, status, affiliation,
certification, or connection that the person does not have.” § 28-3904(b). Plaintiff alleges that
Lim “presented herself to practice immigration matter,” Compl. at ¶ 31, and “represent[ed] that
she [could] obtain . . . legal status for Mr. Feng,” id. at ¶ 18, when, unbeknownst to Plaintiff,
“Lim cannot conduct legal business,” id. at ¶ 11, “has no legal training,” id. at ¶ 18, “is not . . . an
attorney,” id. at ¶ 15, and “is not an accredited representative [of] the INS.” Id. Furthermore,
Plaintiff alleges that Lim represented that she had a connection to the Baltimore Immigration
Office via her “attorney friend” whom she brought to the meeting with Plaintiff. Id. at ¶¶ 10, 14.
In fact, Plaintiff alleges, Lim’s friend “turned out to be a disbarred attorney,” id. at ¶ 15, and
Plaintiff “never met with [him again] after the first meeting.” Id. at ¶ 14.
Finally, the damages Plaintiff requests are permissible damages under the CPPA. In
Count IV, Plaintiff “demands treble damages, along with reasonable attorney fees, injunction and
additional relief as may be necessary . . . .” Id. at ¶ 31. In Count V, Plaintiff demands punitive
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damages. Id. at ¶ 32. Each of these types of damages is permitted under § 28-3905(k)(1). This
count will thus not be dismissed as to Lim.
2. Allstate
Allstate also moves to dismiss Counts IV and V on two grounds: 1) the “Complaint
contains no allegations that Allstate engaged in improper trade practices,” and 2) the “Complaint
fails to allege that Plaintiff is a consumer within the meaning of the CPPA.” Allstate Mot. at 10-
11. Although, as explained above, Plaintiff may be a consumer in relation to Lim within the
meaning of the CPPA, it is a separate question whether he is an Allstate consumer. Allstate
argues that Plaintiff “alleges in the Complaint that he entered into an agreement with Lim not for
an Allstate insurance product, but rather for assistance with an immigration matter. The
Complaint contains no allegation that he purchased, leased or received goods or services from
Allstate which form the basis of his complaints.” Allstate Mot. at 11. Allstate is correct in its
position on direct liability.
Plaintiff, however, indicates that his CPPA claims against Allstate are again based on a
theory of vicarious liability. He argues that “Allstate, as Ms. Lim’s principle [sic] and/or
employer, is liable for Ms. Lim’s unlawful trade practice,” and he asserts that, “[w]hether
Allstate should be vicariously liable for Ms. Lim, as an exclusive agent and/or an employee for
Allstate, depends on the records and evidence discovered in the process . . . .” Plf. Opp. to
Allstate Mot. at 9.
Neither party addresses whether a plaintiff may, as a matter of law, successfully plead a
CPPA claim based solely on vicarious liability. Even assuming that this were possible,
Plaintiff’s claim against Allstate under the CPPA cannot survive for the same reason Counts I
and II fail to state a claim against Allstate: even if the Court accepts as true that Lim is an
Allstate employee, Plaintiff has pled no facts to suggest Lim was acting within the scope of her
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employment when she allegedly solicited immigration business from Plaintiff and entered into a
contract with him to provide him assistance in obtaining a green card. This count thus cannot
proceed against Allstate.
IV. Conclusion
The Court, therefore, ORDERS that:
1) Defendant Allstate’s Motion is GRANTED IN PART and GRANTED WITHOUT
PREJUDICE IN PART;
2) Defendant Lim’s Motion is GRANTED IN PART and DENIED IN PART;
3) Counts I, II, IV and V against Allstate are DISMISSED;
4) Count III against Allstate is DISMISSED WITHOUT PREJUDICE;
5) Count III against Lim is DISMISSED; and
6) A status conference at which all parties must appear shall take place on May 19,
2011, at 10:00 am in Courtroom 19.
SO ORDERED.
/s/ James E. Boasberg
JAMES E. BOASBERG
United States District Judge
Date: May 12, 2011
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