Sundberg v. TTR Realty, LLC

• Citation: 109 A.3d 1123
• Decision Date: 12 February 2015
• Docket Number: No. 14–CV–374.,14–CV–374.
• Parties: Thorsten P. SUNDBERG, et al., Appellants, v. TTR REALTY, LLC, et al., Appellees.
• Court: Court of Appeals of Columbia District

109 A.3d 1123

Thorsten P. SUNDBERG, et al., Appellants

v.TTR REALTY, LLC, et al., Appellees.

No. 14–CV–374.

District of Columbia Court of Appeals.

Argued Dec. 11, 2014.

Decided Feb. 12, 2015.

Timothy R. Clinton, with whom Matthew J. Peed, Washington, DC, was on the brief, for appellants.

Dale K. Cathell, pro hac vice, by special leave of court, with whom J. Hess and Richard M. Kremen, Baltimore, MD, were on the brief, for appellee David Winer.

Spencer K. Stephens, Rockville, MD, for appellees TTR Realty, LLC, and Mansour Abu–Rahmeh.

Before WASHINGTON, Chief Judge, BLACKBURNE–RIGSBY, Associate Judge, and OKUN, Associate Judge, Superior Court of the District of Columbia.^*

Opinion

OKUN, Associate Judge, Superior Court of the District of Columbia:

We live in an age of seemingly boundless information, and this information serves as one of our most vital currencies. In this case, the purchasers of a residence allege, in effect, that they were deprived of this currency because they were not provided with accurate information concerning an impending construction project at a neighboring building. With one exception, the trial court found that the purchasers failed to sufficiently allege a cause of action in their complaint and granted the seller's and realtor's motions to dismiss. In granting the motions to dismiss, the trial court found that the purchasers could not establish that they detrimentally relied on the seller's and realtor's alleged misrepresentations and omissions, and could not establish a breach of the covenant of good faith and fair dealing, because the alleged misrepresentations and omissions occurred after the purchasers signed the contract to buy the property. Although we believe that there may be cases where a cause of action can properly be based on the failure to provide accurate information about a property, even if the misrepresentations or omissions occur after the sales contract is signed, this case is not one of them. Accordingly, for the reasons set forth below, we affirm.

PROCEDURAL AND FACTUAL BACKGROUND

In the fall of 2012, appellants Thorsten P. Sundberg (“Sundberg”) and Debra T. Huang (“Huang”) purchased a residence from appellee David Winer (“Winer”), who sold the residence by using the services of a realty company and realtor, appellees TTR Realty, LLC (“TTR Realty”), and Mansour Abu–Rahmeh (“Abu–Rahmeh”).

According to the complaint filed by appellants, after the parties signed a contract for the sale of the property, but before the parties actually transferred title to the property, appellees intentionally provided false information and withheld material information from appellants about a construction project that was scheduled to occur at the Old Pawn Shop, a building across the street from their residence. The complaint further alleged that the construction project began shortly after appellants moved into their residence, and that this construction substantially and permanently diminished the value of their property. Finally, appellants claimed that they would not have purchased the property, and instead would have breached the contract and been subject to the contract's remedies for breach of contract, had they been truthfully informed of the impending construction project. The appellants alleged that appellees' actions violated the Consumer Protection Procedures Act (“CPPA” or the “Act”) and the covenant of good faith and fair dealing, and involved fraudulent and negligent misrepresentations and omissions.

Appellees TTR Realty and Abu–Rahmeh filed a motion to dismiss the complaint, arguing that the complaint failed to state a cause of action for two reasons. First, they argued that all the components of the sales contract were subsumed into the deed that was signed by the parties more than two months after the contract was signed, and that the deed did not contain any false statements concerning the construction plans of the Old Pawn Shop. Second, they claimed that their disclosure obligations were limited to disclosures concerning the physical condition of the property purchased by appellants, and did not extend to the condition of neighboring properties. The trial court rejected these arguments and denied the motion to dismiss.

Appellee Winer, meanwhile, filed a motion to dismiss on very different grounds. Winer argued that the trial court should dismiss the counts alleging fraudulent and negligent misrepresentations and omissions because the alleged misrepresentations and omissions occurred after the execution of the sales contract and appellants, therefore, could not have relied on them at the time they signed the contract. In addition, Winer asserted that the CPPA count should be dismissed because the statute only applies to merchants and he was not a merchant as defined by the Act. Finally, Winer claimed that the count alleging a breach of the covenant of good faith and fair dealing should be dismissed because he fully performed his obligations under the contract when he conveyed good title to the purchasers and vacated the premises in a timely manner.

The trial court granted Winer's motion, dismissing the CPPA and breach of good faith and fair dealing counts with prejudice, and dismissing the misrepresentation and omission counts without prejudice. More specifically, the trial court rejected appellants' argument that the CPPA applied to Winer, even though he was not a merchant, because Winer conspired with TTR Realty and Abu–Rahmeh, and aided and abetted their violations. The court held that a non-merchant could not be vicariously liable under the CPPA, noting that a contrary result would establish a cause of action against a non-merchant even though the CPPA excluded non-merchants from its coverage.¹ The trial court also dismissed the breach of good faith and fair dealing count with prejudice, rejecting appellants' argument that the withholding of accurate information about the construction plans at the Old Pawn Shop deprived appellants of the fruits of the contract, and agreeing with Winer that appellants received the fruits of the contract when they received title to the property at settlement.

Finally, the trial court held that the fraudulent and negligent misrepresentation and omission counts should be dismissed, finding that appellants failed to show detrimental reliance because the alleged misrepresentations and omissions occurred after the contract was signed. The court rejected appellants' argument that appellees' misrepresentations and omissions deprived them of the opportunity to not purchase the property and instead face the remedies provided in the contract for breach of contract. The trial court dismissed these counts without prejudice, providing appellants the opportunity to allege with more particularity any misrepresentations or omissions that occurred prior to the signing of the sales contract.

After the trial court granted Winer's motion to dismiss, TTR Realty and Abu–Rahmeh filed a motion for judgment or, in the alternative, for reconsideration. The trial court granted this motion in part, dismissing the fraudulent misrepresentation and omission counts, without prejudice, and dismissing the breach of good faith and fair dealing count with prejudice, for the reasons set forth in the order granting Winer's motion to dismiss. However, the trial court did not dismiss the CPPA count against TTR Realty and Abu–Rahmeh, finding that they were merchants under the CPPA and also noting that the complaint adequately alleged a violation of the CPPA because the Act does not require detrimental reliance as an element of a claim.

Following the trial court's grant of Winer's motion to dismiss and its partial grant of TTR Realty's and Abu–Rahmeh's motion for judgment, appellants filed a motion to certify the case for appeal and to stay the trial proceedings, pursuant to Super. Ct. Civ. R. 54(b). The trial court granted appellants' motion, and this appeal followed.²

ANALYSIS

Motion to Dismiss Standard

We review de novo the dismissal of a complaint under Super. Ct. Civ. R. 12(b)(6) for failure to state a claim upon which relief can be granted. Potomac Dev. Corp. v. District of Columbia, 28 A.3d 531, 543 (D.C.2011) ; Grayson v. AT & T Corp., 15 A.3d 219, 228 (D.C.2011) (en banc). In determining whether a complaint sufficiently sets forth a claim, the court must construe the complaint in the light most favorable to the plaintiff and must take the facts alleged in the complaint as true. Casco Marina Dev., L.L.C. v. District of Columbia Redevelopment Land Agency, 834 A.2d 77, 81 (D.C.2003). However, “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice,” and “unadorned, the-defendant-unlawfully-harmed-me accusation[s]” also are insufficient. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ; see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (“a plaintiff's obligation to provide the ‘grounds' of his ‘entitlement to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.”).

Rather, “[t]o survive a motion to dismiss [under Rule 12(b)(6) ], a complaint must contain sufficient factual matter, accepted 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. The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Potomac Dev. Corp., 28 A.3d at 544 (quoting Ashcroft, 556 U.S. at 678, 129 S.Ct. 1937); see also Bell Atl. Corp., 550 U.S. at 555, 127 S.Ct. 1955 (“Factual...