E. Sav. Bank, FSB v. Papageorge

Decision Date10 March 2014
Docket NumberCivil Action No. 13–1147 BAH
Citation31 F.Supp.3d 1
PartiesEastern Savings Bank, FSB, Plaintiff, v. George Papageorge, et al., Defendants.
CourtU.S. District Court — District of Columbia

Alan Lee Balaran, Law Office of Alan L. Balaran, Washington, DC, for Plaintiff.

Laurence Allnutt Elgin, Washington, DC, for Defendants.

MEMORANDUM OPINION

BERYL A. HOWELL, United States District Judge

This tort action, seeking over $10 million, is the tenth lawsuit filed in a dispute between the plaintiff and one or more of the four defendants (or their relatives) over a townhouse in Southeast Washington, D.C., that has been ongoing for more than a decade. The plaintiff alleges nine causes of action: (1) violation of the civil RICO statute, 18 U.S.C. § 1962(c), Compl. ¶¶ 96–127; (2) conspiracy to violate the civil RICO statute, 18 U.S.C. § 1962(d), Compl. ¶¶ 128–36; (3) common law fraud, Compl. ¶¶ 137–43; (4) intentional interference with contract against defendants Earl Mitchell (“Mitchell”), George Papageorge (Papageorge), and Matt Banks (Banks), pertaining to the sale of the townhouse, Compl. ¶¶ 144–53; (5) intentional interference with contract against all four defendants, pertaining to the plaintiff's refinanced mortgage loan on the townhouse, Compl. ¶¶ 154–59; (6) trespass to chattels, Compl. ¶¶ 160–68; (7) unjust enrichment against Defendants Mitchell, Papageorge, and Banks, Compl. ¶¶ 169–73; (8) abuse of process, Compl. ¶¶ 174–80; and (9) conspiracy to defraud the plaintiff, Compl. ¶¶ 181–86. Pending before the Court are motions to dismiss for lack of subject matter jurisdiction, improper service, and failure to state a claim, filed by each of the defendants. See Mots. Dismiss, ECF Nos. 10–13. For the reasons set forth below, the defendants' motions are granted and this case is dismissed with prejudice.

I. BACKGROUND

This case has so many chapters it makes War and Peace look like a short story. And the saga continues.” Franklin–Mason v. Mabus, 742 F.3d 1051, 1052 (D.C.Cir.2014). The fact that a dispute over what appears to be a typical home mortgage refinancing for $168,000 in 1998 has required at least three published District of Columbia Court of Appeals opinions, see E. Sav. Bank, FSB v. Pappas, 829 A.2d 953 (D.C.2003), Pappas v. E. Sav. Bank, FSB, 911 A.2d 1230 (D.C.2006), Banks v. E. Sav. Bank, 8 A.3d 1239 (D.C.2010) ; three actions in this Court, see Mitchell v. E. Sav. Bank, FSB, 890 F.Supp.2d 104 (D.D.C.2012), Papageorge v. Stuckey, No. 13–650 (D.D.C.2013), and the present matter; at least three landlord/tenant proceedings in D.C. Superior Court; and at least one administrative hearing before the D.C. Department of Housing and Community Development, Rental Accommodations Division, is stunning. The Court is astounded at the amount of judicial resources consumed by this matter, and “given the wearied and stale nature of this dispute,” the Court “is loath to extend its shelf life,” Franklin–Mason, 742 F.3d at 1058, particularly since the instant case does not present any colorable claims. Nevertheless, the Court will provide “a bare-bones procedural précis,” id. at 1053, to provide context for resolution of the pending motions.

The property in question is located at 2507 33rd St. SE in Washington, D.C. (the “Property”). Compl. ¶ 19.1 In 1980, the home's owner, Vasiliki Pappas (“Pappas”), acquired title to the property from Aphrodite Pappas (“Aphrodite”). Id. Aphrodite died shortly after Pappas acquired the Property, leaving a number of heirs, and Pappas was “named personal representative of” Aphrodite's estate.Id. Pappas was removed from this position in 1986 after a District of Columbia Probate Court found her to have “committed numerous improprieties in exercising her fiduciary responsibilities as estate administrator.” Id.

Twelve years later, in 1998, Pappas defaulted on a $159,000 loan made to her by Citibank Federal Savings Bank, for which she had executed a Deed of Trust on the Property. Id. ¶20. The same year, the plaintiff extended a new, $168,000 loan to Pappas to settle the Citibank debt, with the Property as collateral. Id. ¶21. The plaintiff alleges that it was “fraudulently induc [ed] to grant this loan based, in part, on leases the plaintiff alleges were “generated for the sole purpose of artificially inflating” Pappas' income. Id. ¶22. Pappas represented that she had three tenants living at the Property, including Defendant Kebede. Id. ¶21. The plaintiff alleges that none of the three tenants ever lived at the Property. Id. ¶22. Pappas subsequently defaulted on her loan from the plaintiff and the plaintiff foreclosed. Id. ¶23.

Soon after the plaintiff's foreclosure action, the parties began suing each other. The initial suits, one initiated by the plaintiff and one initiated by Aphrodite's heirs—none of whom are named defendants in this action, but one of whom is the mother of Defendant Papageorge, id. ¶19—concerned whether the plaintiff's lien against the Property was superior to the judgment lien obtained by Aphrodite's heirs. See E. Sav. Bank, FSB v. Pappas, 829 A.2d at 956 ; Pappas v. E. Sav. Bank, 911 A.2d at 1233. The plaintiff eventually prevailed in two D.C. Court of Appeals rulings, see id. thus ending the saga's first chapter.

The saga's next chapter began with the plaintiff's attempt to evict Defendants Kebede and Banks from the Property. Contemporaneously with the first two D.C. Superior Court lawsuits, the plaintiff acquired the Property at a substitute trustees' sale. Compl. ¶ 23. After obtaining title, the plaintiff sought to evict Pappas by initiating a landlord tenant proceeding in D.C. Superior Court. Compl ¶ 40. Defendants Kebede and Banks intervened claiming right of possession to portions of the property under leases they entered into with Pappas. Id. ¶¶41–42. The plaintiff alleges that this legal intervention was the beginning of the defendants' alleged RICO scheme, since the plaintiff asserts that Defendants Kebede and Banks never actually lived at the Property. See id.

The landlord/tenant court granted the plaintiff possession of the Property with carve-outs for defendants Banks and Kebede, pursuant to their leases. Compl. ¶ 44. In 2002, the plaintiff alleges that Defendants Banks and Kebede sent a letter to the plaintiff offering to vacate the property in return for a $100,000 settlement and ninety days in which to find another place to live. Id. ¶80. After the plaintiff apparently rejected this settlement offer, Defendant Banks sent a letter to the plaintiff demanding that the plaintiff pay Defendant Banks' utility bill, pursuant to the terms of Defendant Banks' lease. Id. ¶88.

In 2004, the landlord/tenant court ordered that Defendants Kebede and Banks were to remain undisturbed in possession of the portions of the Property described in their leases. Id. ¶44. Shortly after that judgment, Defendants Banks and Kebede sent the plaintiff a letter demanding that it undertake certain repairs based on the terms of their leases. Id. ¶89. Not satisfied with the landlord/tenant court's decision, the plaintiff filed a Writ of Restitution against Defendants Kebede and Banks, which was subsequently denied.Id. ¶46. So ended the saga's second chapter.

The third chapter began in 2006 when the plaintiff returned to landlord/tenant court by filing two cases against Defendants Kebede and Banks. See Compl. ¶¶ 47, 57. Meanwhile, Defendant Mitchell, a former tenant at the Property, brought the plaintiff before an administrative tribunal in the D.C. Department of Housing and Community Development's Rental Accommodations Divisions, claiming retaliatory eviction and improper registration of a rental property, amongst other claims. Id. ¶71. These three actions resulted in numerous depositions which, the plaintiff claims, furthered the defendants' RICO scheme, since the deponents allegedly provided false and/or evasive answers. See id. ¶52, 59. The plaintiff eventually obtained a Writ of Restitution against Defendant Banks and other occupants of the Property, ordering them to provide the plaintiff with possession of the Property. Id. ¶65. Defendant Banks appealed and had the Writ overturned by the D.C. Court of Appeals. See Banks v. E. Sav. Bank, 8 A.3d at 1240. The D.C. Superior Court subsequently ordered the plaintiff to restore Defendant Banks to possession of the Property. Compl. ¶ 69. The plaintiff settled all outstanding claims with Defendant Banks on January 25, 2012. Id. ¶70.

Shortly thereafter, in 2012, Defendant Mitchell instituted another legal proceeding against the plaintiff claiming, inter alia, unlawful eviction and breach of the implied covenant of quiet enjoyment in D.C. Superior Court, an action the plaintiff subsequently removed to this Court. Id. ¶75. After having its motion to dismiss partially denied in that suit, see Mitchell v. E. Sav. Bank, 890 F.Supp.2d at 105, the plaintiff settled all outstanding claims with Defendant Mitchell on February 4, 2013, Compl. ¶ 77. It was during this litigation that the plaintiff alleges it learned that “Mitchell was never a tenant” at the Property and that Papageorge was allegedly the moving force behind the litigation. Id. ¶78. The plaintiff does not explain how or when it came to know this information. See id.

Chapter four of this saga revolves around the plaintiff's attempts to sell the Property to Boyle and Afomia Stuckey in a transaction that closed on January 2, 2013. Id. ¶92. Immediately after the sale, and just before the plaintiff settled with Defendant Mitchell, Defendants Mitchell and Papageorge, the latter exercising statutory rights purportedly assigned by Defendant Banks, sought to assert their right to purchase the Property under D.C. tenant law by sending letters requesting information to the plaintiff. Id. ¶¶84–86. After receiving no response, Defendant Papageorge sued the plaintiff and the new owners of the Property in District of Columbia Superior Court in March 2013, alleging violations of his statutory rights and that...

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