Llewellyn-Jones v. Metro Prop. Grp., LLC, CIVIL ACTION NO. 13-11977
| Decision Date | 13 March 2014 |
| Docket Number | CIVIL ACTION NO. 13-11977 |
| Parties | KATHRYN LLEWELLYN-JONES, MARK LLEWELLYN-JONES, CAROLINE JONES, PETER GREEN, LESLY GREEN, SAID FADEL a/k/a SAEED FADHT, WARREN GROVER and MARGARET JOYCE-GROVER, Plaintiffs, v. METRO PROPERTY GROUP, LLC, a Michigan limited liability company, METRO PROPERTY MANAGEMENT, LLC, a Michigan limited liability company, GLOBAL POWER EQUITIES, LLC, a Michigan limited liability company, APEX EQUITIES LLC, a Michigan limited liability company, SAMEER BEYDOUN, ALI BEYDOUN, TAREK MAHMOUD BAYDOUN a/k/a TAREK M. BAYDOUN a/k/a TAREK BEYDOUN, BAYDOUN LAW GROUP, PLLC, a Michigan limited liability company, d/b/a THE MERIDAN LAW GROUP, MIKE ALAWEIH, DAVID MAKKI, CHRIS PICCIURRO, KATHY MESSICS, GEORGE VANDERBURG, ALLEN BROTHERS ATTORNEYS AND COUNSELORS PROFESSIONAL LIMITED LIABILITY COMPANY, a Michigan limited liability company, JAMES ALLEN and JOHN ALLEN, jointly and severally, Defendants. |
| Court | U.S. District Court — Eastern District of Michigan |
R. STEVEN WHALEN
Before the Court is Defendant/Counter-Plaintiff Metro Property Group LLC's ("MPG's") Motion for Preliminary Injunction [Docket #9], which has been referred for a Report and Recommendation pursuant to 28 U.S.C. § 636(b)(1)(B). For the reasons discussed below, I recommend that the Motion be DENIED.
This case involves breach of contract and fraud-related claims made by foreign investors purchasing various properties within the City of Detroit. Plaintiffs, five of whom are citizens of the United Kingdom, along with one from the Republic of Yemen and two from Australia, filed suit on May 3, 2013, alleging fraudulent misrepresentation, fraud in the inducement, breach of contract, unjust enrichment, and conversion, as well as violations of the Michigan Consumer Protection Act ("MCPA"), M.C.L. § 445.101 et seq., civil racketeering pursuant to Racketeering Influenced and Corrupt Organizations Act ("RICO"), and intentional infliction of emotional distress ("IIED"). The Defendants are Metro Property Group, LLC ("Metro Property Group"), Metro Property Management, LLC, Global Power Equities LLC, Apex Equities, LLC, Sameer Beydoun (Chief Executive Officer of the above entities), Ali Beydoun (Chief Operating Officer of Metro Property Group), as well as the following individual performing various functions for Metro Property Group: Mike Alaweih (Vice President of Construction Services), David Makki (Vice President of Real Estate Services), Chris Picciurro (Chief Financial Officer), Kathy Messics ("Client Care Director"), George Vanderburg ( "Director of Tenant Relations)," and Tarek Mahmoud Baydoun("Tarek Baydoun")(general counsel). Complaint at ¶¶ 15-22. These individuals will henceforth be referred to as the Metro Property Group Defendants.
Plaintiffs also name Baydoun Law Group, PLLC, the law firm of Tarek Baydoun; Allen Brothers Attorneys and Counselors Professional Liability Company ("Allen Brothers"), a company with whom Tarek Baydoun is or was "of counsel;" and individuals James Allen and John Allen. Id. at ¶¶ 23-26. These individuals and entities will henceforth be referred to as the "law firm Defendants."1
Plaintiffs allege that the Metro Property Group Defendants purchased mostly dilapidated, uninhabited properties for between $500 and $5,000, then made a profit by inducing investors to purchase these properties for between $40,000 and $50,000. Id. at ¶34. They allege that Defendants knew that the homes "will be unlikely to rent out to third parties because of their mostly undesirable and destitute locations," asserting that any rental payments would not cover the purchase price and cost of repairs. Id. at ¶ 35. Plaintiffs claim that Defendants "did not refurbish the homes [or] make any attempt to bring them up to code requirements for a certificate [of] occupancy" or "Section 8 requirements for habitability," contrary to Defendants' representations when marketing the properties. Id. at ¶36. Plaintiffsstate that Defendant Mike Alaweih "never refurbished and/or repaired" any of the homes, "causing them to be fined thousands of dollars and forcing them to pay thousands of dollars for repairs to the properties they purchased . . ." Id.
Plaintiffs allege that these Defendants marketed the homes to "primarily foreign investors and retirees in foreign countries . . . who are unable and/or unlikely to make the overseas trip to visit Detroit to actually view the properties prior to purchasing them." Id. at ¶ 37. They allege that on the occasions that the investors actually traveled to Detroit to view the houses, they were shown deliberately "staged" refurbished homes not representative of most of the homes sold, or, that Defendants made excuses for refusing to show investors the insides of homes or introducing them to the properties' tenants. Id. In addition, Plaintiffs allege that Defendants falsely stated that uninhabited homes were "tenanted," going so far as to fabricate financial information and the family status of non-existent tenants. Id. at ¶¶ 38-9.
Plaintiffs accuse Tarek Baydoun of threatening a duped investor who challenged Defendants' business practices with criminal prosecution and up to 25 years in prison. Id. at ¶ 40. They allege that Metro Property Group Defendants engaged in a "Ponzi scheme" in which they would pay investors rents from non-existent "tenants" for the first few months after the purchase of the properties, then later claim that the tenant "stoped paying rent and had to be evicted and that . . . no further rent [would] be forthcoming until a new tenant [was] found." Id. at ¶¶ 41, 46. Plaintiffs allege that "in most cases," Defendants did not attempt to procure a new tenant, making the property "a money pit and drain on resources." Id.Plaintiffs state that Metro Property Group Defendants Sameer Beydoun, Ali Beydoun, David Makki, Kathy Messics, and George Vanderburg either forged lease agreements or provided the forged documents to Plaintiffs. Id. at ¶¶ 41-42.
Plaintiffs state that although Defendants represented that the homes were "Section 8 approved," in fact most of the homes did not receive a Section 8 inspection and in one case, Plaintiffs Kathryn Llewellen-Jones and Mark Llewellyn-Jones were fined $5,761.80 for failing an inspection. Id. at ¶ 43. Plaintiffs state that the individual Metro Property Group Defendants also forged documents purporting to show that the properties in question were "up to Section 8 standards." Id. at ¶ 47.
Plaintiffs allege that "Tarek Baydoun, Sameer Beydoun, Ali Beydoun, David Makki, and Mike Alaweih are all from families that are well known to be prominent supporters and members of Hezbollah in South Lebanon." Id. at ¶61. Plaintiffs state that they "fear that the money from which they . . . have been defrauded by Defendants may have, in part, been laundered to Hezbollah." Id. at ¶ 62.
As to the "law firm" Defendants, Plaintiffs allege that Tarek Baydoun, General Counsel for the Metro Property Group entities, also had an "of counsel" relationship with Defendant law firm Allen Brothers. Id. at ¶ 52. Plaintiffs state that Tarek Baydoun billed them for non-existent evictions of "non-existent/fictional tenants" and trespassers. Id. at ¶ 53. They allege that Tarek Baydoun's law firm, Baydoun Law Group d/b/a The Meridian Law Group ("Meridian"), was housed in the same offices as the Allen Brothers, and theoffices of individuals James Allen and John Allen. Id. at ¶ 54. Plaintiffs allege that James Allen and John Allen "were aware or should have been aware" that Tarek Baydoun was involved in the above-alleged "illegal and fraudulent behavior." Id. They state that James Allen also sent them threatening messages, noting that although Tarek Baydoun's name was removed from the Allen Brother's website in October, 2012, Meridian continues to be housed within the offices of Allen Brothers. Id. at ¶ 55.
Plaintiffs request compensatory and punitive damages as well as attorney fees and costs.
On July 30, 2013, Defendants Metro Property Group, Metro Property Management, LLC, Global Power Equities LLC, and Apex Equities, LLC, henceforth collectively referred to as "MPG," filed a Counter-Complaint against Plaintiffs Kathryn Llewellyn-Jones and Mark Llewellyn-Jones ("Counter-Defendants") alleging tortious interference with contracts, business relationships and business expectancies. Docket #8-9. MPG requests injunctive relief against Counter-Defendants, enjoining these individuals from "contacting, directly or indirectly, whether through direct contact or by any means of publication, any individual or company with whom [MPG] has a contract, a business relationship[] or an expectation of a business relationship, including [its] current and potential business partners and investors." Docket #9 at 24.
MPG alleges that Counter-Defendants, unlike most of MPG's clients, purchased their three properties through a brokerage firm based in the United Kingdom known as USAProperty Direct. Counter-Complaint at ¶ 27. MPG alleges that Counter-Defendant Kathryn Llewellyn-Jones acted as a sales agent for other individuals as well as purchaser of the three properties. Id. at ¶ 28. MPG states that it had "limited or no contact with [Counter-Defendants] prior to purchase," alleging that Counter-Defendants' communications were mostly through USA Property Direct. Id. at ¶ 33. MPG alleges that Kathryn Llewellyn-Jones began to raise complaints about MPG's management of the properties in 2012, in response to which MPG employees "made numerous attempts to address" her criticisms. Id. at ¶ 35. MPG notes that Counter-Defendants' terminated its services in July, 2012. Id. at ¶ 36. MPG alleges that while Counter-Defendants continued to complain about the state of the properties, MPG "no...
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