Covey Run, LLC v. Wash. Capital, LLC

• Decision Date: 28 March 2017
• Docket Number: Civil Action No. 1:15–1997 (CKK)
• Citation: 245 F.Supp.3d 9
• Parties: COVEY RUN, LLC, Plaintiff, v. WASHINGTON CAPITAL, LLC, et al., Defendants.
• Court: U.S. District Court — District of Columbia

245 F.Supp.3d 9

COVEY RUN, LLC, Plaintiff,

v.WASHINGTON CAPITAL, LLC, et al., Defendants.

Civil Action No. 1:15–1997 (CKK)

United States District Court, District of Columbia.

Signed March 28, 2017

Iris Figueroa Rosario, V, Eric L. Yaffe, Gary Plant Mooty Mooty & Bennett, P.A., Washington, DC, for Plaintiff.

Dominic G. Vorv, The Vorv Firm, PLLC, Washington, DC, Scott S. Levine, Law Offices of Scott S. Levine, P.A., Weston, FL, for Defendant.

Michael Blackwell, Denton, TX, pro se.

MEMORANDUM OPINION

COLLEEN KOLLAR–KOTELLY, United States District Judge

Plaintiff Covey Run, LLC ("Covey Run" or "Plaintiff") brings this action alleging that Defendants Washington Capital, LLC ("Washington Capital"), Jemel Lyles, Melvin Sanders, and Steve Evans perpetrated a fraudulent scheme that culminated in the alleged theft of $1.2 million from Covey Run. Covey Run alleges that Defendant Washington Capital breached its contract with Covey Run by accessing $1.2 million held in escrow without the prior written knowledge and consent of Covey Run. Covey Run further alleges that Defendants L. Gregory Loomar and the Law Offices of L. Gregory Loomar P.A. (collectively, the "Loomar Defendants"), committed professional negligence and failed to meet their fiduciary duties as the escrow agent for the funds in question, and that Defendant Michael Blackwell negligently misrepresented to Covey Run that Defendant Washington Capital was a reputable private equity firm.

Two motions to dismiss are currently pending before the Court: the Loomar Defendants' [44] Motion to Dismiss Plaintiff's Amended Complaint for lack of subject matter jurisdiction, and Defendant Blackwell's [98] Motion to Dismiss for lack of personal jurisdiction and for various other reasons. Upon consideration of the pleadings,¹ the relevant legal authorities, and the record as a whole, the Court DENIES both motions. The Court concludes that it has subject matter jurisdiction over this action and personal jurisdiction over Defendant Blackwell. It further concludes that the various other grounds for dismissal urged by Blackwell lack merit.

I. BACKGROUND

The Court has already set forth the factual background of this case in detail in its July 11, 2016 Memorandum Opinion, which is incorporated by reference and made part of this Memorandum Opinion. See generally Covey Run, LLC v. Washington Capital, LLC , 196 F.Supp.3d 87 (D.D.C. 2016). After that Memorandum Opinion and accompanying Order were issued, Plaintiff filed the now operative Amended Complaint in order to add a claim for professional negligence against the Loomar Defendants. Pl.'s Am. Compl., ECF No. 38. The Loomar Defendants then filed the pending Motion to Dismiss Plaintiff's Amended Complaint, in which Defendants contend that this Court lacks subject matter jurisdiction over this action because complete diversity among the parties is absent.²

In addition, Defendant Blackwell—who is representing himself pro se —has sent the Court various documents entitled "Motion to Dismiss." These include an "Amended Motion to Dismiss Due to Lack of Personal Jurisdiction," a "Motion to Dismiss Due to Frivolous Lawsuit against Michael Blackwell," a "Motion to Dismiss Due to Judicial Corruption," and a "Motion to Dismiss Due to Violations of 18 U.S. Code 241 & 242." ECF No. 98. The Court granted Blackwell leave to file those documents, and instructed Plaintiff that it could treat them as a single Motion to Dismiss for the purposes of responding. Plaintiff filed a timely response to Defendant Blackwell's motions, ECF No. 102, and Blackwell filed a reply, ECF No. 108.

II. LEGAL STANDARDS

A. Subject Matter Jurisdiction under Rule 12(b)(1)

A court must dismiss a case pursuant to Federal Rule 12(b)(1) when it lacks subject matter jurisdiction. In determining whether there is jurisdiction, the Court may "consider the complaint supplemented by undisputed facts evidenced in the record, or the complaint supplemented by undisputed facts plus the court's resolution of disputed facts." Coalition for Underground Expansion v. Mineta , 333 F.3d 193, 198 (D.C. Cir. 2003) (citations omitted); see also Jerome Stevens Pharm., Inc. v. Food & Drug Admin. , 402 F.3d 1249, 1253 (D.C. Cir. 2005) ("[T]he district court may consider materials outside the pleadings in deciding whether to grant a motion to dismiss for lack of jurisdiction."). "At the motion to dismiss stage, counseled complaints, as well as pro se complaints, are to be construed with sufficient liberality to afford all possible inferences favorable to the pleader on allegations of fact." Settles v. U.S. Parole Comm'n , 429 F.3d 1098, 1106 (D.C. Cir. 2005). In spite of the favorable inferences that a plaintiff receives on a motion to dismiss, it remains the plaintiff's burden to prove subject matter jurisdiction by a preponderance of the evidence. Am. Farm Bureau v. Envtl. Prot. Agency , 121 F.Supp.2d 84, 90 (D.D.C. 2000). "Although a court must accept as true all factual allegations contained in the complaint when reviewing a motion to dismiss pursuant to Rule 12(b)(1), [a] plaintiff['s] factual allegations in the complaint ... will bear closer scrutiny in resolving a 12(b)(1) motion than in resolving a 12(b)(6) motion for failure to state a claim." Wright v. Foreign Serv. Grievance Bd. , 503 F.Supp.2d 163, 170 (D.D.C. 2007) (internal citations and quotation marks omitted).

B. Personal Jurisdiction under Rule 12(b)(2)

When personal jurisdiction is challenged under Federal Rule 12(b)(2), the plaintiff bears the burden of establishing a factual basis for asserting personal jurisdiction over a defendant. See Crane v. N.Y. Zoological Soc'y, 894 F.2d 454, 456 (D.C. Cir. 1990). At this stage, the plaintiff "can satisfy that burden with a prima facie showing." Mwani v. bin Laden, 417 F.3d 1, 7 (D.C. Cir. 2005) (quoting Edmond v. U.S. Postal Serv. Gen. Counsel, 949 F.2d 415, 424 (D.C. Cir. 1991) ). To do so, the plaintiff cannot rest on bare allegations or conclusory statements but "must allege specific acts connecting [the] defendant with the forum." Second Amendment Found. v. U.S. Conference of Mayors, 274 F.3d 521, 524 (D.C. Cir. 2001) (internal quotation marks omitted). "To make such a showing, the plaintiff is not required to adduce evidence that meets the standards of admissibility reserved for summary judgment and trial[;]" but rather, the plaintiff may "rest her arguments on the pleadings, ‘bolstered by such affidavits and other written materials as [he] can otherwise obtain.’ " Urban Inst. v. FINCON Servs. , 681 F.Supp.2d 41, 44 (D.D.C. 2010) (quoting Mwani, 417 F.3d at 7 ).

C. Failure to State a Claim under Rule 12(b)(6)

Pursuant to Federal Rule 12(b)(6), a party may move to dismiss a complaint on the grounds that it "fail[s] to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). "[A] complaint [does not] suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 557, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). Rather, a complaint must contain sufficient factual allegations that, if accepted as true, "state a claim to relief that is plausible on its face." Twombly , 550 U.S. at 570, 127 S.Ct. 1955. "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." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937.

III. DISCUSSION

The Court will DENY both of the pending motions to dismiss. First, the Court will (A) deny the Loomar Defendants' Motion to Dismiss for lack of subject matter jurisdiction. The Court finds that it has diversity jurisdiction over this lawsuit because the parties' citizenships are diverse and the amount in controversy exceeds $75,000. Second, the Court will (B) deny Defendant Blackwell's Motion to Dismiss. The Court finds that it has personal jurisdiction over Blackwell as a result of his transacting business in the District of Columbia, and that the remainder of Blackwell's arguments in support of dismissal lack merit.

A. Loomar Defendants' Motion to Dismiss

The Loomar Defendants' Motion to Dismiss questions this Court's subject matter jurisdiction over this action. Plaintiff has invoked the Court's diversity jurisdiction, which requires both a complete diversity of citizenship between the parties and an amount in controversy exceeding $75,000. 28 U.S.C. § 1332(a)(1). The parties do not dispute that the amount in controversy requirement is satisfied in this case. The parties do, however, dispute whether complete diversity is present. Plaintiff contends that it is a citizen of Minnesota, Wyoming and Wisconsin, and that Defendants are citizens of Virginia, Maryland, Texas, Ohio and Florida. Pl.'s Opp'n to Loomar Mot. at 1. Loomar Defendants' Motion to Dismiss seeks to show that diversity is absent by challenging the citizenship of three parties or entities.

First, Defendants challenge whether Augustana Care, a member of the Plaintiff Limited Liability Company ("LLC"), is actually a citizen of Minnesota as alleged by Plaintiff. Augustana Care's citizenship is relevant here because Plaintiff is an LLC whose citizenship is determined by the citizenship of its members. See Hoch v. Eli Lilly & Co. , 736 F.Supp.2d 219, 220 (D.D.C. 2010) ("a limited-liability company's citizenship is determined by the citizenship of its members."). Plaintiff alleges in its Amended Complaint that Augustana Care is a citizen of Minnesota, see Pl.'s Am. Compl. ¶ 1 ("Augustana Care, a citizen of the State of Minnesota"), and this allegation is supported by all of the evidence currently before the Court. A "corporation is ‘deemed to be a citizen of every State and foreign state by which it has been incorporated and of the State or foreign state where it has its principal place of business." Diaz v. Neighbors Consejo , 77 F.Supp.3d...