Kemp v. Eiland

• Decision Date: 30 September 2015
• Docket Number: Civil Action No. 14-cv-1572 (TSC)
• Parties: Ethel Kemp, Plaintiff, v. Derrick K. Eiland, et al., Defendants.
• Court: U.S. District Court — District of Columbia

139 F.Supp.3d 329

Ethel Kemp, Plaintiff,

v.Derrick K. Eiland, et al., Defendants.

Civil Action No. 14-cv-1572 (TSC)

United States District Court, District of Columbia.

Signed September 30, 2015

Amy R. Mix, Erik Goodman, Legal Counsel for the Elderly, Washington, DC, for Plaintiff.

Philip M. Musolino, Musolino & Dessel PLLC, Anand Vijay Ramana, McGuirewoods

LLP, Washington, DC, for Defendants.

MEMORANDUM OPINION

Judge Tanya S. Chutkan

Plaintiff Ethel Kemp alleges a decade-long scheme by Defendant Derrick Eiland to fraudulently transfer ownership in property from Kemp to himself. Kemp filed suit against Eiland and the holder¹ of a mortgage on the subject property to quiet title to the property, and otherwise obtain monetary and equitable relief against the Defendants. The Bank Defendants moved to dismiss the Complaint for failure to state a claim. Eiland answered the Complaint and subsequently moved to dismiss for failure to state a claim or, in the alternative, for pre-discovery summary judgment. Kemp opposed the motions and cross-moved for discovery pursuant to FED. R. CIV. P. 56(d)

. For the reasons set forth below, Defendants' motions are granted in part and denied in part. Plaintiff's cross-motion for discovery is denied. Plaintiff's motion for leave to file an amended complaint is denied without prejudice for failure to comply with the Local Rules.² Plaintiff may refile the motion in accordance with the Local Rules within ten (10) days from the issuance of this Opinion.

I. BACKGROUND³

The 81–year old Plaintiff, Ethel Kemp, lives at 1637 V Street NW Washington, D.C. (the "Property"). (Compl.¶¶ 17–18). Mrs. Kemp and her late husband Roger Kemp purchased the Property in 1979. (Id. ¶ 17). In or around 2001, the Kemps began falling behind on their mortgage payments, and as a result, faced foreclosure. (Id. ¶¶ 19–20). Defendant Eiland approached the Kemps and offered to help them save their home. (Id. ¶¶ 20–21). The Kemps agreed to work with Eiland because "they believed he was helping them keep their long-time home." (Id. ¶ 22).

The Kemps signed a document entitled a "Declaration of Trust and Land Agreement" (the "Declaration of Trust") on February 8, 2001. (Id. ¶ 23). That document, written by Mr. Eiland and his former co-defendant, Denise Cowley, purported to transfer title of the Property to the newly created "1637 V. St. Land Trust". (Id. ¶¶ 24, 26, 28, 31). The Declaration of Trust did not contain any explicit language identifying any beneficiary of the Trust. (Id. ¶ 32). Plaintiff alleges that the Declaration of Trust "lacks explicit language stating that the Kemps intended to create a trust or that the Kemps intended to place title of their home into the Trust once created." (Id. ¶ 27). Plaintiff also points out that the Kemps' names "are not identified in the Declaration of Trust other than by the appearance of their signatures on the next-to-last page of the document, above the words ‘____% Beneficiary,’ " which is left blank. (Id. ¶ 33). The Declaration of Trust was recorded two years after it was signed. (Id. ¶¶ 36–37). In addition to the Declaration of Trust, the Kemps signed a Warranty Deed (the "2001 Deed"), which purported to transfer the Property to the Trust. (Id. ¶ 38). Like the Declaration of Trust, it was recorded two years after it was signed. (Id. ¶ 40).

The Complaint references no other documents signed on February 8, 2001. Eiland's motion for summary judgment identifies additional documents signed on that date, which Kemp's subsequent filings acknowledge. (Pl. Summ. J. Opp'n at 12). But because, as is discussed below, the Court denies Eiland's motion for summary judgment as premature, and these documents are not "documents upon which the plaintiff's complaint necessarily relies," the Court does not look to them in its evaluation of the Defendants' motions to dismiss. Bullock v. Donohoe 71 F.Supp.3d 31, 34 (D.D.C.2014)

.⁴

Sometime in 2007, Eiland and Cowley created and executed a new Deed (the "2007 Deed"), purporting to transfer title of the Property from the Trust to "Derrick Eiland, sole owner." (Compl.¶ 41). Eiland executed the 2007 Deed as "Substitute Trustee" of the Trust, even though the Declaration of Trust neither names a substitute trustee nor conveys authority on the trustees to appoint a substitute, and no appointment of a substitute trustee was filed among the land records. (Id. ¶¶ 42–45). The 2007 Deed was executed in the District of Columbia but notarized by a Maryland notary public. (Id. ¶¶ 25, 39, 47). It was subsequently recorded in the land records. (Id. ¶ 46). On or about November 19, 2007, Eiland obtained a $300,000 mortgage from Defendant World Savings Bank ("WSB") secured by the Property pursuant to a Deed of Trust ("2007 Deed of Trust").⁵ (Id. ¶¶ 48–50).

Plaintiff asserts that "Eiland used the 2007 Deed and Deed of Trust to strip the equity in the Kemps' home for his own benefit or for the benefit of himself and Defendant Cowley." (Id. ¶ 51). Additionally, Eiland instructed the Kemps to make direct payments to him instead of their lenders. (Id. ¶ 53). The Kemps complied with that request until June 2014, making monthly payments of $941, which Plaintiff "believed ... were going toward her mortgage." (Id. ¶¶ 54–55). Altogether, Eiland is alleged to have received at least $135,000 from Plaintiff since 2001. (Id. ¶ 56). Finally, "[i]n May 2014, Defendant Eiland threatened to ‘evict’ Mrs. Kemp from her home for ‘nonpayment of rent.’ " (Id. ¶ 58).

On June 30, 2014 Plaintiff filed suit in the Superior Court for the District of Columbia against Defendants Eiland and Cowley, as well as Defendants Wells Fargo & Company ("WFC"), Wachovia Corporation, and WSB (collectively, the "Bank Defendants"). The Complaint contains five claims: Count I (against all Defendants), seeks to quiet title to the Property by setting aside all deeds and deeds of trust on the grounds that the documents involved were either facially deficient, void, voidable, fraudulently induced, or otherwise unconscionable (Id. ¶¶ 59–77); Count II (against Eiland), alleges a breach of the fiduciary duty of loyalty (Id. ¶¶ 78–84); Count III (against all Defendants), seeks injunctive relief prohibiting "any further conveyance, encumbrance, or other transactions involving her home, including any eviction proceeding to evict Mrs. Kemp from her home" (Id. ¶¶ 85–86); Count IV (against Eiland), alleges unjust enrichment (Id. ¶¶ 87–94); and Count V (against all Defendants), alleges slander of title (Id. ¶¶ 95–109).

On September 16, 2014, the Bank Defendants removed the case to this court pursuant to 28 U.S.C. § 1441

, asserting diversity jurisdiction. Eiland filed an answer on September 23, 2014, and on the same day, both the Bank Defendants and Cowley filed motions to dismiss.⁶

On February 6, 2015, Eiland filed his own motion to dismiss, or, in the alternative, for summary judgment. Plaintiff opposed the motion and countered with a motion to permit discovery pursuant to Rule 56(d)

.

II. LEGAL STANDARD

A. Motion to Dismiss

A motion to dismiss under FED. R. CIV. P. 12(b)(6)

for failure to state a claim tests the legal sufficiency of a complaint. Browning v. Clinton, 292 F.3d 235, 242 (D.C.Cir.2002). "To survive a motion to dismiss, 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, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (internal quotation marks and citation omitted). A claim is plausible when the factual content allows the Court to "draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Thus, although a plaintiff may survive a Rule 12(b)(6) motion even where "recovery is very remote and unlikely," the facts alleged in the complaint "must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555–56, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (internal quotation marks and citation omitted). Evaluating a 12(b)(6) motion is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679, 129 S.Ct. 1937. The reviewing court may "consider only the facts alleged in the complaint, any documents either attached to or incorporated in the complaint and matters of which [the court] may take judicial notice."

E.E.O.C. v. St. Francis Xavier Parochial Sch. , 117 F.3d 621, 624 (D.C.Cir.1997)

.

B. Motion for Summary Judgment

Summary judgment is appropriate where there is no disputed genuine issue of material fact, and the movant is entitled to judgment as a matter of law. FED. R. CIV. P. 56(a)

; Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In determining whether a genuine issue of material fact exists, the court must view all facts in the light most favorable to the non-moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The moving party bears the "initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits ... which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp., 477 U.S. at 323, 106 S.Ct. 2548 (internal quotation marks omitted). The nonmoving party, in response, must "go beyond the pleadings and by [its] own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial." Id. at 324, 106 S.Ct. 2548 (internal quotation marks omitted). "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249–50, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (citations omitted). "[A]t the summary...