Nahigian v. Juno Loudoun, LLC
| Decision Date | 19 January 2010 |
| Docket Number | No. 1:09cv725 (JCC).,1:09cv725 (JCC). |
| Citation | 684 F. Supp.2d 731 |
| Parties | Keith and Courtney NAHIGIAN, Plaintiffs, v. JUNO LOUDOUN, LLC and The Ritz-Carlton Company, LLC, Defendants. |
| Court | U.S. District Court — Eastern District of Virginia |
John Chapman Petersen, Surovell Markle Isaacs & Levy PLC, Fairfax, VA, for Plaintiffs.
John James Sabourin, Jr., Reed Smith LLP, Leesburg, VA, Oliver Garcia, Aegis Law Group LLP, Washington, DC, for Defendants.
This matter is before the Court on Defendant Juno Loudon, LLC's Motion to Dismiss Counts I (fraud) and III (violation of the Virginia Consumer Protection Act) Dkt. 34 and Motion for Summary Judgment as to Count II (violation of the Interstate Land Sales Act) Dkt. 37 along with Defendant Ritz-Carlton Hotel, Company LLC's Motion to Dismiss all counts Dkt. 41. The Court heard argument on these motions on October 21, 2009 and has since reviewed the additional authorities submitted by the parties thereafter. For the following reasons, the Court will deny Defendant Juno Loudoun, LLC's Motion to Dismiss, will deny Defendant Juno Loudoun, LLC's Summary Judgment Motion, and deny Defendant Ritz-Carlton Hotel Company, LLC's Motion to Dismiss.
The facts and allegations in the Amended Complaint are set forth as follows. In May 2005, The Ritz-Carlton Company, LLC ("Ritz") had entered into a Transaction Agreement with Juno-Loudoun ("Juno") where it agreed to manage "the process and standards utilized by Broker and its personnel in the marketing and sale of the lots ..." (Amend. Compl. ¶ 6.) for a real estate development called "The Estates at Creighton Farms" in Loudoun County, Virginia (Amend.Compl. ¶ 2). In the spring of 2007, the Plaintiffs, Keith and Courtney Nahigian (the "Nahigians" or "Plaintiffs") began a search for single-family home that "was unique in value" and "would provide first-class recreational amenities." (Amend. Compl. ¶ 10.) Plaintiffs, responding to a radio advertisement for a "Ritz-Carlton community", visited "Creighton Farms" (the "Development") on a number of occasions. (Amend. Compl. ¶¶ 11-12.) The Development was presented to the Plaintiffs by, what the Plaintiffs call in their Amended Complaint, a "Juno-Loudoun/Ritz-Carlton representative" ("Juno/Ritz representative") as a private "Ritz-Carlton community" that provided its residents with the following amenities: the opportunity to join a private Jack Nicklaus-designed Ritz-Carlton golf club adjacent to the community ("Golf Club"), a "Ritz Kids" day care facility for children, restaurants, management, and social events that met Ritz-Carlton standards, and "reciprocal privileges" at other Ritz-Carlton resorts around the world. (Amend. Compl. ¶¶ 13-14.)
Before entering into the Agreement, Plaintiffs made multiple visits to the Development and also twice visited another Ritz-Carlton community located in Jupiter, Florida. (Amend. Compl. ¶¶ 15, 19.) During these visits, "Juno/Ritz" also provided Plaintiffs with multiple items bearing the Development's name and Ritz's logo. (Amend. Compl. ¶ 16.) Indeed, the Ritz-Carlton logo was "stamped all over the Community, including on the stone façade entrance facing the highway." (Amend. Compl. ¶ 20). The Juno/Ritz representative also gave Plaintiffs promotional materials prominently displaying and discussing Ritz's management relationship with the Community. (Amend. Compl. ¶¶ 15, 16, 18.) Further, "in response to a specific question from the Nahigians," "Juno/Ritz" assured them that Ritz "was under contract for thirty years to manage the Community and would be able to renew the contract after that time." (Amend. Compl. ¶ 17.) Finally, the "Juno/Ritz representative" informed Plaintiffs that "The Ritz-Carlton Club & Spa" in Jupiter, Florida was an example of "The Ritz-Carlton Life," that Juno had the same partnership with Ritz as did the Jupiter property, and that the Plaintiffs would get the "same services and amenities" as in Jupiter and have "reciprocal rights with Ritz locations such as in Jupiter." (Amend.Compl. ¶ 18.) The Amended Complaint alleges that cumulative oral and written statements affirmed the same representation: that the Development was a "Ritz-Carlton community" which presently held a long-term and fully binding agreement with Ritz to impact and benefit all aspects of the Community experience" and labels this assertion "the False Statement." (Amend. Compl. ¶ 21.)
On June 1, 2007, Plaintiffs, in reliance on the False Statement, signed a Purchase Agreement (the "Agreement") and, closed on the Property, an unimproved parcel at 22616 James Monroe Highway, Aldie, Virginia 20105, in Loudoun County, Virginia (the "Property") under the terms of the Agreement on July 1, 2007. (Amend. Compl. ¶ 25.) Juno continued to represent itself as a "Ritz-Carlton Managed Community" in an advertisement appearing in a magazine in the fall of 2008. (Amend. Compl. ¶ 26.) These representations regarding Ritz's role in the Community continued after the Agreement was signed until March 11, 2009, when Plaintiffs received an e-mail from the Community's office manager, informing them that Ritz would no longer be affiliated with the Golf Club.
Plaintiffs now allege that there is not and never has been a relationship between Juno and Ritz for property management, concierge or spa services, reciprocal privileges, or for anything more than temporary management of the Golf Club. (Amend. Compl. ¶ 31.) Plaintiffs also believe that representatives of "Juno/Ritz" intentionally made the false statement and intended that the statement be relied upon. (Amend. Compl. ¶ 21.)
Plaintiffs originally filed a Complaint stating claims under Virginia law and seeking $2.5 million dollars in damages against Juno and Ritz, in the Circuit Court of Loudoun County, Virginia (Circuit Court) which was served on the parties on June 2, 2009. On July 1, 2009, Ritz filed a notice of removal of this action under 28 U.S.C. §§ 1441(b) and 1332 from the Circuit Court, and jurisdiction is proper before this Court. Juno consented to this motion the same day. On July 10, 2009, Plaintiffs moved to remand this action to the Circuit Court. Ritz opposed the motion on July 24, 2009. In addition, both Juno and Ritz filed Motions to Dismiss the claims against them on July 2, 2009. Before this Court could hear argument on those motions, Plaintiffs filed an Amended Complaint on August 28, 2009. In the wake of this filing, the Court issued its September 28, 2009 Order, 661 F.Supp.2d 563 (E.D.Va.2009) denying Plaintiffs' Motion to Remand and denying without prejudice the Defendants' Motions to Dismiss.
On October 2, 2009 Defendants filed the instant Motions. Defendant Juno filed a Motion to Dismiss Counts I and III and a separate Motion for Summary Judgment as to Count II. Defendant Ritz filed a Motion to Dismiss the Amended Complaint in its entirety. On October 13, 2009 Plaintiffs filed Oppositions to all Motions and on October 19, 2009 Defendants' replied. These motions are now before the Court.
1. Federal Rule of Civil Procedure 9(b) Counts I and III of the Complaint allege fraud, thus these claims are subject to Federal Rule of Civil Procedure Rule 9(b), which requires that claimants plead fraud with particularity.1 Fed.R.Civ.P. 9(b); Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 784 (4th Cir.1999). Particularity requires that claimant state "the time, place and contents of the false representations, as well as the identity of the person making the misrepresentation and what he obtained thereby." Harrison, 176 F.3d at 784 citing 5 Charles Alan Wright and Arthur R. Miller, Federal Practice and Procedure: Civil § 1297 at 590 (2d 1990). In the Fourth Circuit, a court will "hesitate to dismiss a complaint under Rule 9(b) if the court is satisfied (1) that the defendants have been made aware of the particular circumstances for which they will have to prepare a defense at trial, and (2) that plaintiff has substantial pre-discovery evidence of those facts." Harrison, 176 F.3d at 784.
2. Federal Rule of Civil Procedure 12(b)(6)
A Rule 12(b)(6) Motion to Dismiss tests the legal sufficiency of the complaint. See Randall v. United States, 30 F.3d 518, 522 (4th Cir.1994) (citation omitted). In deciding a Motion to Dismiss, "the material allegations of the complaint are taken as admitted." Jenkins v. McKeithen, 395 U.S. 411, 421, 89 S.Ct. 1843, 23 L.Ed.2d 404 (1969) (citation omitted). Moreover, "the complaint is to be liberally construed in favor of plaintiff." Id.
Recently, the Supreme Court has stated that "to survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted to be true, to `state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 557, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). A claim has factual plausibility when "the plaintiff pleads factual content that allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955).
Defendant Juno has moved for Summary Judgment as to Count II. Summary judgment is proper "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Triton Marine Fuels Ltd., S.A. v. M/V PACIFIC CHUKOTKA, 575 F.3d 409, 412 (4th Cir.2009) citing Fed.R.Civ.P. 56(c); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106...
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