Maib v. Federal Deposit Insurance Corporation

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
_____________________________
)
GEORGE A. MAIB, et al. )
)
Plaintiffs, )
)
v. ) Civil Action No. 09-1261 (RWR)
)
FEDERAL DEPOSIT INSURANCE )
CORPORATION, )
)
Defendant. )
_____________________________ )
MEMORANDUM OPINION
Plaintiffs George Maib, Robyn Maib, and Ocean Concrete, Inc.
bring this action against the Federal Deposit Insurance
Corporation (“FDIC”) as the receiver of the Columbian Bank &
Trust Company (“CB&T”), alleging four causes of action based upon
disputes over a loan between the plaintiffs and CB&T. The FDIC
has moved to dismiss the complaint. Because the complaint fails
to state a claim for which relief can be granted, the motion will
be granted.
BACKGROUND
George Maib is the principal officer, director, and
shareholder of Ocean Concrete. (Compl. ¶ 5.) The FDIC is the
receiver for the failed institution formerly known as CB&T. (Id.
¶ 6.) Before CB&T failed, it approved a $2.7 million loan for
the Maibs to fund Ocean Concrete and to acquire real property in
Florida for the operation of Ocean Concrete. (Id. ¶ 7; Def.’s
Mem. in Supp. of Mot. to Dismiss (“Def.’s Mem.”) at 3, Ex. 1.)
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Under the loan agreement, CB&T agreed to make the loan “in
multiple advances as the [Maibs] complete[d] the development of
the Property.” (Def.’s Mem. Ex. 1 ¶ 3.1; see Compl. ¶ 9.) CB&T
agreed to make an initial advance of $1,389,690.00 to the Maibs,
and “the balance of the Loan [would] be advanced as work on the
Property [was] completed and inspected in accordance with
procedures developed by [CB&T].” (Def.’s Mem. Ex. 1 ¶ 3.1.) The
plaintiffs assert, though, that the loan agreement required CB&T
to advance sums “upon request” of the plaintiffs (Compl. ¶ 9),
and they complain that CB&T began conditioning the loan
distributions upon the plaintiffs classifying the proceeds in a
particular manner over the plaintiffs’ objections. (Compl.
¶ 10.)
George Maib informed CB&T that he wanted to use $300,000 of
the loan proceeds to acquire a residential dwelling. CB&T
responded that he would have to take out a new loan carrying
$169,000 in closing costs. CB&T also allegedly threatened the
plaintiffs with default and foreclosure, and forced the
plaintiffs to pay a broker’s fee of $25,000 for this new loan for
$300,000, which, according to the plaintiffs, “never came into
existence.” (Id. ¶¶ 11-12.)
According to the plaintiffs, CB&T subsequently interfered
with the business decisions and operations of the plaintiffs’
business by refusing to fund requests for distributions unless
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conditions CB&T dictated were fulfilled, including refusing to
distribute funds for vehicle and equipment acquisition and
leasing unless the plaintiffs used a vendor selected by CB&T.
The plaintiffs allege that CB&T’s failure to distribute the
proceeds of the loan caused “checks to bounce” and damaged their
“credit-worthiness and business reputations[.]” (Id. ¶¶ 13-14.)
The plaintiffs state that they engaged in discussions with a
separate lender who was willing to take over the CB&T loans at
their maturity, if CB&T cooperated. However, CB&T did not
cooperate with the plaintiffs and the separate lender, and the
opportunity with the separate lender ended. (Id. ¶¶ 16-17.)
The plaintiffs filed this four-count complaint alleging
Florida common law claims1 of breach of contract (Count I),
tortious interference with business relationships (Count II),
“disparagement of credit” (Count III), and fraud (Count IV). The
FDIC has moved under Federal Rule of Civil Procedure 12(b)(6)2 to
1
The loan agreement specifically stated that it and “all
matters relating to the Loan shall be governed by and construed
in accordance with Florida law[.]” (Def.’s Mem., Ex. 1 ¶ 8.1.)
2
The FDIC also moves under Rule 12(b)(1) to dismiss claims
by Robyn Maib and Ocean Concrete arguing that their failure to
first file a claim with the receiver deprives the court of
subject matter jurisdiction. “Ordinarily, a federal court must
first determine that it has jurisdiction over a case before
ruling on its merits.” Shafi v. Palestinian Auth., 686 F. Supp.
2d 23, 25 (D.D.C. 2010) (citing Sinochem Int’l Co. Ltd. v.
Malaysia Int’l Shipping Corp., 549 U.S. 422, 430-31 (2007) and
Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94
(1998)). However, when a case can be resolved otherwise in favor
of the party raising the jurisdictional issue, “it is not
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dismiss the complaint, arguing that the complaint fails to state
any viable claim for relief. (Def.’s Mem. at 2.) The plaintiffs
oppose.
DISCUSSION
“A complaint can be dismissed under Rule 12(b)(6) when a
plaintiff fails to state a claim upon which relief can be
granted.” Peavey v. Holder, 657 F. Supp. 2d 180, 185 (D.D.C.
2009) (citing Fed. R. Civ. P. 12(b)(6)). “A Rule 12(b)(6) motion
to dismiss tests the legal sufficiency of a complaint.”
Smith-Thompson v. Dist. of Columbia, 657 F. Supp. 2d 123, 129
(D.D.C. 2009).
To survive a motion to dismiss, a complaint must
contain sufficient factual matter, acceptable as true,
to “state a claim to relief that is plausible on its
face.” . . . A claim has facial plausibility when the
plaintiff pleads factual content that allows the court
to draw the reasonable inference that the defendant is
liable for the misconduct alleged.
Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (citing Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 556, 570 (2007)). The
complaint must be construed in the light most favorable to the
plaintiff and “the court must assume the truth of all
well-pleaded allegations.” Warren v. Dist. of Columbia, 353 F.3d
necessary to grapple first with difficult jurisdictional
questions.” Shafi, 686 F. Supp. 2d at 25 (citing Norton v.
Mathews, 427 U.S. 524, 532 (1976) and Feinstein v. Resolution
Trust Corp., 942 F.2d 34, 40 (1st Cir. 1991)). Because the
complaint can be dismissed for failure to state a claim, the
jurisdictional challenges need not be addressed.
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36, 39 (D.C. Cir. 2004). In deciding a motion brought under
Rule 12(b)(6), a court does not consider matters outside the
pleadings, but a court may consider on a motion to dismiss “the
facts alleged in the complaint, documents attached as exhibits or
incorporated by reference in the complaint,” Gustave-Schmidt v.
Chao, 226 F. Supp. 2d 191, 196 (D.D.C. 2002), or “documents ‘upon
which the plaintiff’s complaint necessarily relies’ even if the
document is produced not by the plaintiff in the complaint but by
the defendant in a motion to dismiss,” such as the loan agreement
here. Hinton v. Corr. Corp. of Am., 624 F. Supp. 2d 45, 46
(D.D.C. 2009) (quoting Parrino v. FHP, Inc., 146 F.3d 699, 706
(9th Cir. 1998)). “[A] complaint attacked by a Rule 12(b)(6)
motion to dismiss does not need detailed factual allegations[.]”
Twombly, 550 U.S. at 555. However, “[w]here a complaint pleads
facts that are ‘merely consistent with’ a defendant’s liability,
it ‘stops short of the line between possibility and plausibility
of entitlement to relief.’” Iqbal, 129 S. Ct. at 1949 (quoting
Twombly, 550 U.S. at 557).
I. BREACH OF CONTRACT
The FDIC moves to dismiss the breach of contract claim in
Count I for failure to state a claim because the complaint does
not specify the provision of the contract that CB&T breached or
identify any specific conduct by CB&T that breached the
agreement. Indeed, says the FDIC, the agreement specifically
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allowed CB&T to condition loan advances on the progress of the
development of the underlying property, and covered purchase of
that property but not a residence. (Def.’s Mem. at 4, 9.) The
plaintiffs oppose, arguing that the complaint “alleged 20
paragraphs of jurisdictional and general factual allegations and
the requisite elements in paragraphs 22-24[.]” (Pls.’ Opp’n
at 2.) Paragraphs 22 through 24 of the complaint state:
22. This is an action for Breach of Contract, that
contract being the loan documents attached hereto
as Exhibit C.
23. The conduct of [CB&T] as above described herein,
constitutes a breach of the loan documents which
formed a contract between the Plaintiffs . . . and
[CB&T].
24. As a result of the above-described conduct of
[CB&T], the plaintiffs . . . have suffered damages
in excess of Seventy Five Thousand Dollars
($75,0000) together with attorneys’ fees which
they have incurred and will continue to incur.
(Compl. ¶¶ 22-24.)
Under Florida law, the elements of a breach of contract
claim are (1) a valid contract; (2) a material breach; and (3)
damages. Sierra Equity Group, Inc. v. White Oak Equity, LLC,
650 F. Supp. 2d 1213, 1228 (S.D. Fla. 2009) (citing Beck v.
Lazard Freres & Co., LLC, 175 F. 3d 913, 914 (11th Cir. 1999) and
Miller v. Nifakos, 655 So. 2d 192, 193 (Fla. Dist. Ct. App.
1995)). As the FDIC points out, the complaint does not specify
what provision of the loan agreement CB&T breached. The
plaintiffs do not identify any provision requiring CB&T to make
distributions to the plaintiffs “upon request.” What the loan
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agreement specifically states is that after CB&T made an initial
distribution, “the balance of the Loan shall be advanced as work
on the Property is completed and inspected in accordance with
procedures developed by [CB&T].” (Def.’s Mem., Ex. 1 ¶ 3.1.)
Moreover, plaintiffs identify no language in the agreement
permitting them to use the loan proceeds to acquire a residence,
nor is any such language apparent upon reading the agreement.
The complaint fails to contain sufficient factual material to
show that the breach of contract claim is plausible on its face.
To the contrary, its claim for breach of contract is contradicted
by the plain language on the face of the contract documents.
See, e.g., Ihebereme v. Capital One, N.A., Civil Action No. 10-
1106 (ESH), 2010 WL 3118815, at *4 (D.D.C. August 9, 2010)
(dismissing breach of contract claim where the complaint failed
to “put the defendant on notice of which terms [of the alleged
contract] it allegedly breached,” and where the court reviewed
the contract and could not find a provision that imposed the duty
upon which the plaintiff’s claim was based).
II. TORTIOUS INTERFERENCE WITH BUSINESS RELATIONS
The FDIC moves to dismiss the claim for tortious
interference with business relationships that existed between the
plaintiffs and “companies and individuals with which it attempted
to do business” asserted in Count II because the complaint fails
to allege a specific relationship with a particular party, and
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fails to allege that CB&T knew of any specific prospective
business relationships between the plaintiffs and other
additional parties. (Def.’s Mem. at 9-11.) The plaintiffs
oppose, arguing that the FDIC “curiously does not deny” that the
plaintiffs had a specific relationship with external parties, and
arguing that the “loan documents attached to the complaint
demonstrating such relationship speak for themselves.” (Pls.’
Opp’n at 3.)
Under Florida law, the elements of a claim of tortious
interference with business relations are “1) the existence of a
business relationship, not necessarily evidenced by an
enforceable contract; 2) knowledge of the relationship on the
part of the defendant; 3) an intentional and unjustified
interference with that relationship by the defendant;
and 4) damage to the plaintiff as a result of the breach of the
relationship.” Magre v. Charles, 729 So. 2d 440, 443-44 (Fla.
Dist. Ct. App. 1999)).
Again, the complaint lacks sufficient facts to support the
plaintiffs’ claim. To the extent that the complaint is alleging
that CB&T interfered with the plaintiffs’ relationship with the
other lender, it does not allege any facts that would show that
CB&T had knowledge of that relationship. To the extent that the
complaint alleges that CB&T interfered with the plaintiffs’
relationship with CB&T itself, “[u]nder Florida law, a claim for
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tortious interference cannot lie where the alleged interference
is directed at a business relationship to which the defendant is
a party. Romika-USA, Inc. v. HSBC Bank USA, N.A., 514 F. Supp.
2d 1334, 1338 (S.D. Fla. 2007) (citing Sobi v. Fairfield Resorts,
Inc., 846 So. 2d 1204, 1207-08 (Fla. Dist. Ct. App. 2003)).
Additionally, the complaint does not allege any behavior on
behalf of CB&T that was inconsistent with protecting its own
economic interest, and “[p]rotecting a company’s own economic
interest to reduce the risk of incurring further loss does not
constitute intent to damage within the meaning of a cause of
action for intentional interference with business relationship.”
Networkip, LLC v. Spread Enters., 922 So. 2d 355, 358 (Fla. Dist.
Ct. App. 2006). The complaint does not allege a claim of
tortious interference with business relationships that is
plausible on its face.
III. DEFAMATION OR LIBEL
The FDIC moves to dismiss the “disparagement of credit”
claim in Count III for failure to state a claim because Florida
law does not provide for a cause of action titled “disparagement
of credit,” and to the extent that Count III alleges a cause of
action for defamation or libel, the complaint does not identify
what CB&T allegedly stated, to whom it made the statement, and
what was false about the statement. (Def.’s Mem. at 11.) The
plaintiffs oppose, arguing that regardless of how the claim they
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allege in Count III is denominated, the United States Supreme
Court and “Florida law generally recognize[] and provide[] for
recovery of damages when another disparages or slanders any
property or rights thereto.” (Pl.’s Opp’n at 3.)
The cases cited by the plaintiffs - - Bothmann v.
Harrington, 458 So. 2d 1163, 1168 (Fla. Dist. Ct. App. 1984),
Allington Towers Condo. North, Inc. v. Allington Towers North,
Inc., 415 So. 2d 118, 119 (Fla. Dist. Ct. App. 1982), and
Atkinson v. Fundaro, 400 So. 2d 1324, 1326 (Fla. Dist. Ct. App.
1981), pertain to a cause of action for slander of title to real
property, a theory not supported by the facts alleged anywhere in
the complaint. “A group of torts recognized under the collective
title of ‘injurious falsehood’ are often interchangeably called
slander of title, disparagement of property, or trade libel.”
Salit v. Ruden, 742 So. 2d 381, 386 (Fla. Dist. Ct. App. 1999)
(citing Sailboat Key, Inc. v. Gardner, 378 So. 2d 47, 48 (Fla.
Dist. Ct. App. 1979)). “The gist of the tort of injurious
falsehood is the ‘intentional interference with another’s
economic relations.’” Salit, 742 So. 2d at 386 (quoting Procacci
v. Zacco, 402 So. 2d 425, 427 (Fla. Dist. Ct. App. 1981)). “The
basis of a disparagement of property action arises out of an
injurious falsehood or false statement concerning one’s
property.” Bothmann, 458 So. 2d at 1168. While the plaintiffs
argue that their credit reports constitute property, the
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complaint and the plaintiffs’ opposition simply do not specify or
identify what statements CB&T made about the plaintiffs’ credit
reports, or about anything else for that matter, that were false.
Similarly, the complaint fails to state a cause of action
for defamation. Under Florida law, “[t]he elements of [a]
defamation claim are: (1) the defendant published a false
statement; (2) about the plaintiff; (3) to a third party; and (4)
the falsity of the statement caused injury to plaintiff.” Border
Collie Rescue, Inc. v. Ryan, 418 F. Supp. 2d 1330, 1348 (M.D.
Fla. 2006). Nowhere in the complaint or in the opposition to the
FDIC’s motion to dismiss do the plaintiffs describe any false
statement purportedly made by CB&T, or to whom such a statement
was published. Instead, the complaint merely asserts legal
labels unaccompanied by any facts sufficient to survive a motion
to dismiss.
IV. FRAUD
The FDIC moves to dismiss the claim of fraud in Count IV
because the complaint does not allege any facts to support the
purported fraud and lacks the specificity required by Rule 9(b),
and because Florida’s economic loss rule prohibits claims such as
those asserted by the plaintiffs. The plaintiffs do not address
this argument in their opposition to the motion to dismiss, and
therefore have waived any opposition or have conceded the issue.
See CSX Transp., Inc. v. Commercial Union Ins., Co., 82 F.3d 478,
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482-83 (D.C. Cir. 1986); Bonaccorsy v. Dist. of Columbia., 685 F.
Supp. 2d 18, 24 (D.D.C. 2010); Felter v. Salazar, 679 F. Supp. 2d
1, 4 n.2 (D.D.C. 2010).
CONCLUSION
The complaint fails to state a cause of action for breach of
contract, tortious interference with business relations,
defamation or injurious falsehood, or fraud. Therefore, the
FDIC’s motion to dismiss will be granted. An appropriate order
accompanies this memorandum opinion.
SIGNED this 23rd day of March, 2011.
/s/
RICHARD W. ROBERTS
United States District Judge