Slinski v. Bank of Am., N.A.

• Decision Date: 30 September 2013
• Docket Number: Civil Action 11–720 (RC)
• Citation: 981 F.Supp.2d 19
• Parties: Paul S. Slinski and Sarah J. Slinski, Plaintiffs, v. Bank of America, N.A. et al., Defendants.
• Court: U.S. District Court — District of Columbia

981 F.Supp.2d 19

Paul S. Slinski and Sarah J. Slinski, Plaintiffs,

v.Bank of America, N.A. et al., Defendants.

Civil Action 11–720 (RC)

United States District Court, District of Columbia.

September 30, 2013

George Leroy Moran, Moran Monfort, P.L.C., Fairfax, VA, for Plaintiffs.

Anand V. Ramana, Jessica D. Fegan, McGuireWoods LLP, Kathy C. Potter, Benton, Potter & Murdock, P.C., Washington, DC, John M. Murdock, Benton Potter & Murdock, P.C., Falls Church, VA, for Defendants.

MEMORANDUM OPINION

RUDOLPH CONTRERAS, United States District Judge

Sarah Slinski had a contract to buy the condominium in which she lives from Freddie Mac, which acquired the property in a foreclosure sale. She applied to Bank of America for a home mortgage. While her mortgage application was pending, Freddie Mac apparently sold the property to Bank of America. Ms. Slinski and another plaintiff brought suit alleging breach of contract and other theories of recovery. Many—but not all—of their claims will be dismissed.

I. BACKGROUND

Paul and Sarah Slinski allege that, in August 2009, Ms. Slinski leased a condominium on Vermont Avenue, near U Street in Washington, D.C. Her landlords held the property subject to a deed of trust benefitting Bank of America, N.A. (“Bank of America” or “the bank”). Am. Compl. ¶¶ 10, 13. In early February 2010 the bank installed new trustees, who promptly notified the landlords that their property would be sold at auction to satisfy their debt. Id. ¶¶ 14–15. That auction was held the following month, and Ms. Slinski was the high bidder. Id. ¶ 17. She executed a contract and paid a deposit, id., but the sale was cancelled and her deposit returned, id. ¶ 18. The trustees sent another notice of foreclosure sale that May, and a second auction was held in June. Id. ¶¶ 20–21. This time, the Federal Home Loan Mortgage Corporation (“Freddie Mac”) was the high bidder and took title to the property. Id. ¶ 21. The plaintiffs allege, upon information and belief, that before Freddie Mac bid on the condominium it entered into an agreement with Bank of America in which the bank “agreed to repurchase the Property from Freddie Mac should Freddie Mac fail to sell the Property after a period of time.” Id. ¶ 22. They further allege—also upon information and belief—that, as a result of this agreement, Freddie Mac became a “straw man” acting as an agent for its principal, Bank of America. Id. ¶ 23.

In October 2010, Smith Realty, Inc. Enterprise (acting on behalf of Freddie Mac) contacted Sarah Slinski to give her an opportunity to purchase the condominium in accordance with the District of Columbia Tenant Opportunity to Purchase Act, D.C. Code § 42–3404.01 et seq. Am. Compl. ¶ 24. Ms. Slinski signed a contract to do so and paid a deposit of $20,000 to Smith Realty. Id., Ex. 11; id. ¶ 26. The contract provided that Ms. Slinski and Freddie Mac would “make full settlement ... on, or with mutual consent before, November 19, 2010.” Id., Ex. 11, ¶ 6. An addendum, which stated that it was to control in the case of any conflicts with the contract's main body, similarly provided that the closing would “occur on or before November 19, 2010, or within seven (7) calendar days of loan approval, whichever is earlier, unless the closing date is extended in writing signed by the Seller and Purchaser.” Id., Ex. 11, Addendum (“Addendum”), ¶ 4. It required Ms. Slinski to “apply for financing from a third party financial institution in the form of a first mortgage secured by the Property” and “accept a prevailing rate of interest at the time of closing.” Id. ¶ 14.b. Ms. Slinski was given “five (5) business days from the final execution date of the Contract of Sale to make [a] loan application,” and Freddie Mac was free to cancel the contract if Ms. Slinski was not “ ‘prequalified’ by a lender within seven (7) business days” from that date. Id. ¶ 15.

The addendum also provided that, “[i]n the event that either party fails or refuses to proceed to settlement for any reason” the “sole and exclusive remedy” would be “the recovery of liquidated damages in the amount of one thousand dollars.” Id. ¶ 19. Both parties “acknowledge[d] and agree[d] that the economic consequences” of such a breach were “speculative and uncertain” and therefore “agree[d] to accept ... liquidated damages as full and complete compensation for any and all claims, whether founded upon contract, tort, statute, or otherwise, that may arise in connection with the failure or refusal of the other party to proceed to settlement.” Id. The parties “expressly waive[d] and disclaim[ed] any and all further claims and remedies including but not limited to injunctive relief, specific performance ... and claims for monetary compensation.” Id.

The plaintiffs allege, upon information and belief, that despite this contract Freddie Mac never actually intended to sell the condominium to Ms. Slinski. Am. Compl. ¶ 29.

Ms. Slinski applied to Bank of America for a home mortgage. Id. ¶ 30. When she submitted her contract with Freddie Mac, the bank informed her that she was not qualified for a loan to purchase the condominium and would require a cosigner. Paul Slinski cosigned the financing application, and the bank sent Sarah Slinski a mortgage loan commitment letter on that same day. Id. ¶¶ 32–34. On November 10, 2010, Bank of America sent Ms. Slinski a notice of approval, conditioned on her submission of certain information and documents. Id. ¶ 35.¹

A series of delays ensued. On November 17, 2010, the plaintiffs allege that Ms. Slinski and Freddie Mac signed ² an agreementpushing the closing date back to December 12. Id. ¶ 36. Bank of America sent Ms. Slinski another notice of conditional approval, requiring the submission of additional information and documents. Id. ¶ 37. The plaintiffs allege that Ms. Slinski and Freddie Mac rescheduled the closing for January 7, 2011, id. ¶ 38, then signed two more agreements: one set a new closing date of January 28, and the other a date of February 11, id. ¶ 41. They further allege that, during this period, Bank of America was intentionally delaying the approval of the mortgage with the knowledge that such a delay would prevent Ms. Slinski from closing on the condominium. Id. ¶ 42.

On January 28, Bank of America finally approved the loan to Ms. Slinski, with Mr. Slinski as cosigner. Id. ¶ 43. But the plaintiffs allege, upon information and belief, that by this time Freddie Mac no longer owned the condominium–Bank of America had bought it. Id. ¶ 44.

The following month, the bank informed the plaintiffs that it would sell the condominium to Ms. Slinski at the same price and on the same terms that Freddie Mac had agreed to, but that a new appraisal would be required before that sale could be completed. Id. ¶ 46. On March 9, the appraiser (who was also a real estate agent) contacted Ms. Slinski and offered her the opportunity to buy the property for a substantially higher price than Freddie Mac had agreed to. Id. ¶ 47. On March 15, Bank of America informed Ms. Slinski that there was no longer a valid contract for the sale of the condominium. Id. ¶ 51. On March 17, the bank sent notices to the former owners of the condominium and to Ms. Slinski, demanding that they vacate the property. Id. ¶ 52. On March 22, Bank of America terminated Ms. Slinski's mortgage application. Id. ¶ 53. The plaintiffs brought suit in Superior Court on March 24.

After Freddie Mac removed the case pursuant to 12 U.S.C. § 1452(f), the plaintiffs amended their complaint, naming Bank of America, Freddie Mac, Fairfax Realty (which employed the appraiser), and Smith Realty as defendants. Freddie Mac and Bank of America have both moved to dismiss the complaint for failure to state a claim on which relief can be granted. All claims against Fairfax Realty have been dismissed with prejudice. Smith Realty has apparently never been served.

II. LEGAL STANDARD

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of a complaint. Browning v. Clinton, 292 F.3d 235, 242 (D.C.Cir.2002). Such motions allege that a plaintiff has not properly stated a claim; they do not test a plaintiff's ultimate likelihood of success on the merits. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974). The complaint is only required to set forth a short and plain statement of the claim, in order to give the defendant fair notice of the claim and the grounds upon which it rests. Kingman Park Civic Ass'n v. Williams, 348 F.3d 1033, 1040 (D.C.Cir.2003) (citing Fed. R. Civ. P. 8(a)(2) and Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)).

A court considering this type of motion presumes the factual allegations of the complaint to be true and construes them liberally in the plaintiff's favor. See, e.g.,United States v. Philip Morris, Inc., 116 F.Supp.2d 131, 135 (D.D.C.2000). It is not necessary for the plaintiff to plead all elements of his prima facie case in the complaint, Swierkiewicz v. Sorema N.A., 534 U.S. 506, 511–14, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002), or to plead law or match facts to every element of a legal theory, Krieger v. Fadely, 211 F.3d 134, 136 (D.C.Cir.2000) (internal citations omitted). Nonetheless, “[t]o 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 omitted); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 562, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A claim is facially plausible when the pleaded factual content “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 (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer...