Alami v. Lincoln Prop. Co.
| Decision Date | 24 November 2014 |
| Docket Number | Case No. 1:14–cv–00915–GBL–JFA. |
| Citation | 61 F.Supp.3d 551 |
| Court | U.S. District Court — Eastern District of Virginia |
| Parties | Fouad ALAMI, et al., Plaintiff, v. LINCOLN PROPERTY COMPANY, et al., Defendants. |
John Leon Marquardt, Jr., Marquardt Law, Washington, DC, for Plaintiff.
Christopher Allan Glaser, Mitchell B. Weitzman, Jackson & Campbell PC, Washington, DC, for Defendants.
THIS MATTER is before the Court on Defendants Pembroke Real Estate, Inc. (“Pembroke”) and 1201–1225 New York Avenue SPE, LLC's (“SPE”; “landlord”) Motion to Dismiss the First Amended Complaint (“Motion to Dismiss”) (Doc. 11) and Defendants LPC Commercial Services, Inc. (“LPCCSI”) and Lincoln Property Company's (“Lincoln”) Motion to Dismiss the First Amended Complaint (“Motion to Dismiss”) (Doc. 17) (collectively “Defendants”; “Motions to Dismiss”).1 This case arises from Defendants' alleged failure to timely complete the “buildout” of the Alamis' business located at 1201 New York Avenue NW, Washington, D.C.2 The first issue is whether the Court should grant Pembroke and SPE's Motion to Dismiss. The second issue is whether the Court should grant LPCCSI and Lincoln's Motion to Dismiss.
The Court GRANTS Defendants' Motions to Dismiss for four reasons. First, the Plaintiffs' breach of Work Agreement claim must be dismissed because the language of the Lease bars any delay in buildout claims. Second, the Plaintiffs' negligence claim must be dismissed because District of Columbia law precludes recovery for negligence claims based on a breach of contract under the economic loss doctrine. Third, the Plaintiffs' promissory estoppel claim must be dismissed because it is insufficiently plead. Fourth, the Complaint must be dismissed because this Court should abstain from exercising jurisdiction and defer the claims to an ongoing state court proceeding. Additionally, the Court also GRANTS Pembroke and SPE's Motion to Dismiss Plaintiffs' claims because Pembroke cannot be personally liable as a disclosed agent.
Plaintiffs Fouad and Cynthia Alami (“the Alamis”) are owners and operators of a District of Columbia shoe repair and dry cleaning business. (Doc. 3 ¶ 10.) The Alamis are Virginia citizens. (Id. ¶ 1.) The Alamis opened “12th and G Street Cleaners and Shoe Repair” in June 2003. (Id. ¶ 10.) In March 2012, the Alamis were told that they must vacate their location by December 31, 2012. (Id. ¶ 13.) The Alamis found a new location for their business at 1201 New York Avenue NW, and on August 1, 2012, entered into a five year Retail Lease Agreement (“Lease”; Doc. 3–5 at 2) with Defendant SPE to rent space therein (“the Premises”). SPE is a Delaware corporation headquartered in Washington, D.C., and served as the Alamis' landlord. (Doc. 3 ¶ 4.) The lease term was set to commence on January 1, 2013, subject to Section 3(a) of the Lease, which defines “Commencement Date.” (Doc. 3–5 at 2.)
Although the Lease contemplates a separate Work Agreement, no such document was ever executed. (Doc. 3 ¶ 17.) However, the Alamis contend that a Work Agreement “arose between the Alamis, Pembroke, SPE and Lincoln through the communications between these parties and their agents following the execution of the Lease.” (Id. ) The Alamis further contend that “[t]he ‘punch list,’ in turn, likewise so-arose and, per the Lease, was to be executed ‘in accordance with the terms of the Work Agreement,’ not the Lease itself.” (Id. )
On October 4, 2012, the Alamis provided Lincoln with their security deposit and first month's rent. (Id. ¶ 19.) The Lease was not executed until November 7, 2012. (Id. ¶ 20.) The Lease was signed by Pembroke Senior Vice President David Lucey. (Id. ) During this time the Alamis still thought the work would be completed in time for their January 1, 2013 move-in date. (Id. ¶ 20.)
On December 26, 2012, Mrs. Alami emailed Lincoln project manager Bob Knopf stating that “[they] are scheduled to move this Saturday, 12/29,” and inquiring whether “the space [will] be ready?” (Id. ¶ 27.) The Alamis received no response from Mr. Knopf for several days and moved in on December 31, 2012. (Id. at ¶ 28.) Upon moving in, the Alamis discovered several problems: (1) it appeared that construction had recently started as the entire space “had the look of a construction site”; (2) there was no dedicated plug for their shoe repair machine; and (3) the new store front door was not installed. (Id. ¶ 29.) That same morning, Mr. Knopf replied to the Alamis' December 26th email, stating that “[w]e are still a few weeks out for the store front to be installed” and that they had not “received our full permitted drawings from the architect in order to obtain our permits.” (Id. ¶ 29.) Mr. Knopf promised to update the Alamis when he had “some dates.” (Id. )
The Alamis opened their shop for business on January 2, 2013. (Id. ¶ 30.) On January 8, 2013, the Alamis learned that (1) Lincoln still did not have a permit to do work on “the exterior and close up the interior walls”—Lincoln anticipated obtaining this permit by the end of January; and (2) the store front installation would not be complete until late February 2013. (Id. ¶ 36.) Lincoln acquired the building permit in early February; however, the Alamis still could not obtain a certificate of occupancy from the District of Columbia government until a final inspection was done on the construction. (Id. ¶¶ 41–42.) Construction did not begin until mid-March and the Alamis did not receive a certificate of occupancy until April 15, 2013. (Id. ¶ 46.) “[A]s late as May 9, 2013, carpeting remained incomplete, damage to the wall remained, and painting had yet to be done.” (Id. ¶ 47.)
The Alamis allege that the resultant effect of the construction delays on their business was “substantial.” (Id. ¶ 48.) “Customers complained both about having to go into the interior of the building just to drop things off and about the general conditions of the store.” (Id. ) They claim that monthly revenue at the new location was fifty percent less than what it was at their former location. (Id. ¶ 50.) The Alamis were barely meeting their expenses. (Id. ) As a result of the sharp decline in revenue and profitability, in August 2013 the Alamis decided to close the business. (Id. ¶¶ 50–51.)
The Alamis filed their Amended Complaint on August 8, 2014, asserting claims of negligence, promissory estoppel, and breach of the Work Agreement. Defendants' Motions to Dismiss are now before the Court.
A. Standard of Review
Federal Rule of Civil Procedure 12(b)(6) enables a defendant to move for dismissal by challenging the sufficiency of the plaintiff's complaint. Fed. R. Civ. P. 12(b)(6). A Rule 12(b)(6) motion should be granted where the plaintiff has failed to “state a plausible claim for relief” under Rule 8(a). Walters v. McMahen, 684 F.3d 435, 439 (4th Cir.2012) (internal quotation marks omitted) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ). To be facially plausible, a claim must contain “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Clatterbuck v. City of Charlottesville, 708 F.3d 549, 554 (4th Cir.2013) (quoting Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 ). To survive a Rule 12(b)(6) motion, a complaint must contain sufficient factual allegations, which if taken as true, “raise a right to relief above the speculative level” and “nudg[e] [the] claims across the line from conceivable to plausible.” Vitol, S.A. v. Primerose Shipping Co., 708 F.3d 527, 543 (4th Cir.2013) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ).
The requirement for plausibility does not mandate a showing of probability but merely that there is more than a possibility of the defendant's unlawful acts. Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir.2009) (quoting Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 ). As a result, a complaint must contain more than “naked assertions” and “unadorned conclusory allegations” and requires some “factual enhancement” in order to be sufficient. Id. (citing Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 ; Twombly, 550 U.S. at 557, 127 S.Ct. 1955 ). In addition to the complaint, the court will also examine “documents incorporated into the complaint by reference,” as well as those matters properly subject to judicial notice. Clatterbuck v. City of Charlottesville, 708 F.3d 549, 557 (4th Cir.2013) (citations omitted); Matrix Capital Mgmt. Fund, LP v. BearingPoint, Inc., 576 F.3d 172, 176 (4th Cir.2009) (quoting Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007) ).
A court's Rule 12(b)(6) review involves separating factual allegations from legal conclusions. Burnette v. Fahey, 687 F.3d 171, 180 (4th Cir.2012). In considering a Rule 12(b)(6) motion, a court must give all reasonable inferences to the plaintiff and accept all factual allegations as true. E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir.2011) (citations omitted). Though a court must accept the truthfulness of all factual allegations, it does not have to accept the veracity of bare legal conclusions. Burnette, 687 F.3d at 180 (citing Aziz v. Alcolac, Inc., 658 F.3d 388, 391 (4th Cir.2011) ).
A court must grant a Rule 12(b)(6) motion where a complaint fails to provide sufficient nonconclusory factual allegations to allow the court to draw the reasonable inference of the defendant's liability. Giacomelli, 588 F.3d at 196–97 (citing Iqbal, 556 U.S. at 678–79, 129 S.Ct. 1937 ; Gooden v. Howard Cnty., Md., 954 F.2d 960, 969–70 (4th Cir.1992) (en banc)).
The Court GRANTS Defendants' Motions to Dismiss for four reasons. First, the breach of Work Agreement claim is dismissed because the language of the Lease precludes any claims for consequential damages associated with...
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