Cronin v. Adam A. Weschler & Son, Inc.

904 F.Supp.2d 37

Anne CRONIN, Plaintiff,

v.ADAM A. WESCHLER & SON, INC., Defendant.

Civil Action No. 12–1463 (JEB).

United States District Court, District of Columbia.

Nov. 15, 2012.

Brian W. Stolarz, Jackson Kelly PLLC, Washington, DC, for Plaintiff.

James Andrew Sullivan, Jr., Miles & Stockbridge, Rockville, MD, for Defendant.

MEMORANDUM OPINION

JAMES E. BOASBERG, District Judge.

While Plaintiff Anne Cronin was renovating her house, she placed various furnishings in storage with the Prosperi Company. Believing Cronin had failed to pay its fee, Prosperi at some point sent the items to Defendant Adam A. Weschler & Son, Inc., to be auctioned. Upon learning of the pending auction, Plaintiff contacted Prosperi and Weschler's to block the sale. Despite her payment of outstanding storage fees and assurances by both Prosperi and Weschler's that the sale would not proceed, 37 lots of her items did end up being auctioned, yielding far less than their true value.

Plaintiff has thus brought this diversity action against Weschler's only, alleging conversion, negligence, fraud, and a violation of the D.C. Consumer Protection Procedures Act (CPPA), D.C.Code § 28–3901 et seq. Defendant now moves to dismiss much of the case, arguing both that Prosperi is a necessary party and that several of the causes of action are infirm. Because the Court finds that Plaintiff cannot allege a sufficient merchant-consumer relationship to invoke the CPPA, it will grant Defendant's Motion as to that claim (Count IV). The remaining counts (I, II & III), however, may proceed since Prosperi is not a required party, and the fraud and conversion causes of action have been adequately pled.

I. Background

According to the Complaint, which must be presumed true at this stage, Plaintiff had long used the services of Prosperi to store personal property. See Compl., ¶ 8. During the renovation of her house, she stored over $100,000 worth of Ralph Lauren home furnishings there, and fees were routinely paid by Ralph Lauren using Plaintiff's credit card. Id., ¶¶ 9–11. On August 13, 2012, Prosperi informed Plaintiff that the property would be auctioned the next day by Weschler's because of unpaid storage fees. Id., ¶¶ 13–14. Plaintiff immediately authorized Prosperi to charge her credit card for the outstanding fees of $8,913.62, which it did. Id., ¶ 15. Plaintiff then called Weschler's and spoke to Tom Weschler, the company president, to tell him that the storage-fee dispute had been resolved and that the property should not be auctioned. Id., ¶ 16. Weschler informed her that he required confirmation of payment from Prosperi, in which event he would call off the auction. Id.

Plaintiff right away told Prosperi, which then contacted Weschler that same afternoon to confirm payment and the cancellation of the auction. Id., ¶ 17. Weschler agreed, but indicated that a fee of $3,500 would be charged for the canceled auction, which Prosperi told him Plaintiff would pay. Id. Prosperi then contacted Plaintiff to assure her that no auction would proceed. Id., ¶ 18. In this exchange of information, however, some directive apparently went awry because Plaintiff learned the next afternoon that the auction had in fact proceeded, and approximately 37 lots of her items had been sold for a total of $14,760, an amount far less than what Plaintiff had paid. Id., ¶¶ 19–20.

Plaintiff then brought this suit, and Defendant has now moved to dismiss.

II. Legal Standard

Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of an action where a complaint fails to “state a claim upon which relief can be granted.” When the sufficiency of a complaint is challenged under Rule 12(b)(6), the factual allegations presented in it must be presumed true and should be liberally construed in plaintiff's favor. Leatherman v. Tarrant Cty. Narcotics & Coordination Unit, 507 U.S. 163, 164, 113 S.Ct. 1160, 122 L.Ed.2d 517 (1993). Although the notice-pleading rules are “not meant to impose a great burden on a plaintiff,” Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 347, 125 S.Ct. 1627, 161 L.Ed.2d 577 (2005), and “detailed factual allegations” are not necessary to withstand a Rule 12(b)(6) motion, Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), “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, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (internal quotation omitted). Plaintiff must put forth “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. Though a plaintiff may survive a 12(b)(6) motion even if “recovery is very remote and unlikely,” Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (citing Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974)), the facts alleged in the complaint “must be enough to raise a right to relief above the speculative level.” Id. at 555, 127 S.Ct. 1955.

III. Analysis

In moving to dismiss, Defendant makes four discrete arguments, the first relating to Plaintiff's alleged failure to join Prosperi as a necessary party and the others concerning putative defects in certain causes of action. Specifically, Defendant challenges the conversion claim (Count I), the fraud claim (Count III), and the CPPA claim (Count IV). Weschler's does not seek to dismiss the negligence claim (Count II). The Court will first analyze Defendant's joinder argument and then proceed to separately address the arguments specific to each cause of action.

A. Required Party

Defendant first argues that this case should be dismissed under Federal Rule of Civil Procedure 12(b)(7) for Plaintiff's failure to join Prosperi as a necessary party under Rule 19. See Mot. at 3–5. Prosperi is required, Defendant asserts, because the “case will necessarily involve factual determinations” concerning Prosperi's role in the sale of Plaintiff's property, such that “Prosperi's central involvement and interests in the subject matter of this case cannot be ignored.” Id. at 5. Plaintiff responds that Prosperi is merely a “potential third-party defendant in an indemnity or contribution claim by Weschler's arising from the transactions or occurrences at issue in this case.” Opp. at 2. Cronin contends that she has a cause of action against Weschler's “regardless of whether or not Prosperi is potentially at fault” and “need not add Prosperi as a defendant in order to fully pursue relief from Weschler's tort.” Id. at 3. The Court agrees. Prosperi is not a required party under Rule 19, and the Court will thus deny Defendant's Motion pursuant to Fed.R.Civ.P. 12(b)(7).¹

Rule 12(b)(7) provides that a complaint may be dismissed for “failure to join a party under Rule 19.” Courts are generally reluctant to grant Rule 12(b)(7) motions, and “dismissal is warranted only when the defect is serious and cannot be cured.” 5C Charles Alan Wright, Arthur R. Miller, Mary Kay Kane & Richard L. Marcus, Federal Practice & Procedure, § 1359 (3d ed. 2004). As with other Rule 12 motions, a court must accept the complaint's allegations as true for the purposes of a Rule 12(b)(7) motion to dismiss. 16th & K Hotel, LP v. Commonwealth Land Title Ins. Co., 276 F.R.D. 8, 12 (D.D.C.2011).

Rule 19 “establishes a two-step procedure for determining whether an action must be dismissed because of the absence of a party needed for a just adjudication.” Cherokee Nation of Okla. v. Babbitt, 117 F.3d 1489, 1495–96 (D.C.Cir.1997). First, the Court must determine whether Prosperi is required to be joined. If the Court determines that Prosperi is not required under Rule 19(a), it need not proceed to the second step of the test, which provides that if a party deemed required under Rule 19(a) cannot be joined, “the court must determine whether, in equity and good conscience, the action should proceed among the existing parties or should be dismissed.” Fed.R.Civ.P. 19(b). In this case, the Court reaches only the first step.

Under the first step of the test, a party is required to be joined if: (a) in that party's absence, the Court cannot accord complete relief among existing parties; or (b) disposing of the action in the party's absence may either (i) impede its ability to protect its interest or (ii) would put an existing party at risk of incurring double, multiple, or otherwise inconsistent obligations. Fed.R.Civ.P. 19(a)(1). Defendant, as the moving party, bears the burden to demonstrate that an absent party is required under Rule 19. Ilan–Gat Engineers, Ltd. v. Antigua Int'l Bank, 659 F.2d 234, 242 (D.C.Cir.1981).

Plaintiff's claims here sound in tort, rather than contract. Rule 19 does not require the joinder of joint tortfeasors such as Prosperi. See7 Charles A. Wright, Arthur R. Miller, & Mary K. Kane, Federal Practice and Procedure, § 1623 (3d ed. 2001); Temple v. Synthes Corp., Ltd., 498 U.S. 5, 7, 111 S.Ct. 315, 112 L.Ed.2d 263 (1990) (citing Lawlor v. Nat'l Screen Serv. Corp., 349 U.S. 322, 329–30, 75 S.Ct. 865, 99 L.Ed. 1122 (1955)); Krieger v. Trane Co., 765 F.Supp. 756, 763 (D.D.C.1991) (noting that it is well settled “that joint tortfeasors are not indispensable parties”). They are not required parties because “joint and several liability permits the plaintiff to recover full relief from any one of the responsible parties, which party then has the option of suing for contribution or indemnity.” City of New York v. Waterfront Airways, Inc., 620 F.Supp. 411, 413 (S.D.N.Y.1985).

Weschler's potential right to contribution or indemnity from Prosperi, consequently, does not make the latter a required party under Rule 19. See Gen. Refractories Co. v. First State Ins. Co., 500 F.3d 306, 320 (3d Cir.2007) (citing Janney Montgomery Scott, Inc. v. Shepard Niles, Inc., 11 F.3d 399, 412 (3d Cir.1993)); Bank of America Nat'l Trust and Sa. Assoc. v. Hotel Rittenhouse Assoc., 844 F.2d 1050, 1054 (3d Cir.1...