DNCSI Sols. LLC v. Landmore Inc.

DNCSI SOLUTIONS LLC, Plaintiff, v. LANDMORE INC., et al., Defendants.

Civil Action No. 5:19-cv-70

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF VIRGINIA HARRISONBURG DIVISION

November 20, 2020

MEMORANDUM OPINION

By: Hon. Thomas T. Cullen United States District Judge

Plaintiff DNCSI Solutions, LLC, ostensibly a real-estate and sales-consulting company, sued its former clients Defendants Landmore Inc. and Isabella Enterprises, Inc., as well as their sole corporate shareholders, Kamran Heydari-Dastjerdi and Sheryl Rees Dastjerdi, for alleged failure to pay commissions and other compensation owed under the terms of three agreements. DNCSI also alleges that the Dastjerdis used the two corporate defendants to evade personal obligations and commit fraud by commingling personal and corporate assets, deliberately undercapitalizing the corporations, and failing to engage in corporate formalities. As such, DNCSI seeks to pierce the corporate veils of Landmore and Isabella to hold the Dastjerdis personally liable.

Defendants filed a motion to dismiss the entire Second Amended Complaint ("SAC") with prejudice under Federal Rule of Civil Procedure 12(b)(6). As explained below, Defendants contend, among other things, that DNCSI breached the terms of their main agreement and is therefore not entitled to any payment for the work it performed. The parties have fully briefed and argued the motion, and it is now ripe for disposition. The court will grant in part and deny in part Defendants' motion to dismiss.

BACKGROUND

DNCSI is a Tennessee limited liability company, and its sole member, Stacey W. McLaughlin, is a citizen of Florida.¹ (ECF No. 73 ("Compl.") ¶¶ 3-4.) Isabella and Landmore are Virginia stock corporations with their principal places of business in Winchester, Virginia. (Id. ¶¶ 5-6.) Ms. Dastjerdi is the President, Secretary, and Director of Isabella, and the Treasurer of Landmore. (Id. ¶¶ 7-8.) Mr. Heydari-Dastjerdi is the Chief Financial Officer/Sales Manager and Director of Isabella, and the President of Landmore. (Id. ¶¶ 9-10.) The Dastjerdis are the only shareholders of Landmore and Isabella, and they are both Virginia citizens. (Id. ¶¶ 11-14.)

A. The First Agreement: The Commission Agreement

DNCSI and Isabella entered into the first agreement—the "Commission Agreement"—on May 3, 2018. (Id. ¶ 18.) Under the Commission Agreement, DNCSI was to provide "broker services" for Isabella. (Id. ¶ 19.) Specifically, DNCSI was to secure a tenant for a property Isabella "would soon be purchasing" in Texas. (Id.) Under the agreement, Isabella would pay DNCSI a 5% commission of "the entire value of the lease agreement" between Isabella and the tenant. (Id. ¶ 20.) The commission was due when Isabella executed the lease with the tenant and received the first year's rent. (Id. ¶ 21.)

Over two months later, on July 25, 2018, Isabella executed the lease with the tenant for the Texas property, and the tenant issued a check to Isabella for the first year's rent. (Id. ¶¶ 25-26.) The entire value of the lease between Isabella and the tenant was $3,903,372.60.(Id. ¶ 27.) DNCSI therefore alleges that it was entitled to $195,168.63—5% of the entire value of the lease agreement—under the Commission Agreement. (Id. ¶ 28.)

B. The Second Agreement: The Amended Commission Agreement

On July 27, 2018, two days after Isabella executed the lease with the tenant in Texas, DNCSI and Isabella "amended the Commission Agreement in writing." (Id. ¶ 29.) The parties refer to this agreement as the "Amended Commission Agreement." (Id.) The Amended Commission Agreement consists of the same document as the Commission Agreement, with handwritten annotations and signatures on the bottom of the second page. (See ECF No. 1-2 at 108-09.) The handwriting reads:

Amended on 7/27/18 Break $140,132.38 into 12 even [$]11,677.69 monthly commission [payments]. Upon lease signature, th[e] parties agree to extend current consulting contract Sept 1st 2018-August 31st 2019 @ base consulting fee of $8500.00 per month + 5% commissions on gross sales.

(Id. at 109.) DNCSI alleges that "[i]n consideration for withholding demand of the entire commission" owed under the Commission Agreement (allegedly $195,168.63), Isabella would pay DNCSI (1) $140,132.38 over 12 monthly installments ($11,677.69 per month); (2) $8,500 per month between September 2018 and August 2019; and (3) a 5% commission on gross sales "for future consulting and broker services from September 1, 2018, until August 31, 2019." (Compl. ¶ 30.)

C. The Third Agreement: The Independent Contractor Services Agreement

On May 28, 2018—prior to the execution of the Amended Commission Agreement—DNCSI, Isabella, and Landmore entered into a separate written agreement, the "Independent Contractor Services Agreement." (Id. ¶ 22.) This agreement contemplated thatDNCSI would provide Isabella and Landmore "with sales consulting, contract consulting, and other various corresponding services to secure new business." (Id. ¶ 23.) DNCSI was to provide these various services for approximately three months, between June 1, 2018 and August 31, 2018. (Id.) Isabella and Landmore agreed to pay DNCSI 5% "of the gross contract value of any new business signed, payable 'net 7 days' after receipt of a signed contract and deposit check." (Id. ¶ 24.)

D. DNCSI's Performance and Defendants' Payment

DNCSI alleges that it provided "consulting and broker services [for] Defendant Isabella and Defendant Landmore" after July 27, 2018 (the date DNCSI and Isabella executed the Amended Commission Agreement) through January 2019. (Id. ¶¶ 31-34, 41.) Specifically, DNCSI alleges that it procured (1) $7,500 in new business for Isabella on August 14, 2018 for "concrete work"; (2) $85,000 in new business for Isabella in November 2018 for "HVAC installation"; and (3) $29,548 in new business for Isabella also in November 2018 for "various construction related services, including water line installation." (Id. ¶¶ 32-34.)

Defendants apparently made a series of payments under the agreements. First, in September 2018, Isabella paid DNCSI $22,901.74 "for expenses incurred by [DNCSI], the first installment payment under the Amended Commission Agreement, a consulting fee under a prior services agreement with Defendant Isabella, and a commission for concrete work that was secured in August[] 2018 under the Independent Contractor Services Agreement." (Id. ¶ 35.) Mr. Heydari-Dastjerdi also gave DNCSI "personal property, including a [one-ounce] gold bar and earrings, valued at $2,500 as payment towards futureinvoices." (Id. ¶ 36.) Ms. Dastjerdi issued an $850 check to DNCSI "from her personal checking account for travel reimbursement that was promised to [DNCSI]." (Id.)

Second, in October 2018, Landmore paid DNCSI "the remaining balance of $18,826.23 towards the $21,326.23 invoice for expenses incurred by [DNCSI], the second installment payment under the Amended Commission Agreement, and the September 2018 consulting fee under the Amended Commission Agreement." (Id. ¶ 37.)

Third, also in October 2018, Mr. Heydari-Dastjerdi gave DNCSI "personal property[,] which was located in his residential safe, including 16 [ounces] of gold coins, valued at $20,800 as payment." (Id. ¶ 38.) The gold coins constituted "payment towards a $21,136.58 invoice for expenses incurred by [DNCSI], the third installment payment under the Amended Commission Agreement, and the October 2018 consulting fee under the Amended Commission Agreement." (Id.) DNCSI accepted the gold coins and additional "cash payments" from Mr. Heydari-Dastjerdi to satisfy the entire invoice. (Id.)

Finally, in November 2018, Mr. Heydari-Dastjerdi gave DNCSI "personal property which was located in his residential safe, including 18 [ounces] of gold coins, valued at $23,400 as payment towards a $29,069.36 invoice for expenses incurred by [DNCSI], the fourth installment payment under the Amended Commission Agreement, the November 2018 monthly consulting fee under the Amended Commission Agreement, and commissions for new business secured in November 2018." (Id. ¶ 39.) This was the fourth and final payment from Defendants to DNCSI. (Id. ¶ 40.)

E. DNCSI Discontinues Its Services

On January 11, 2019, when DNCSI realized that Defendants were not going to makeany further payments, it notified Defendants that it would "discontinue" its services. (Id. ¶ 42.) DNCSI also alleges that it decided to discontinue services because "Defendants had caused [DNCSI] to submit forged and fraudulent documents in the course of [its] services." (Id. ¶ 43.) Ms. Dastjerdi allegedly admitted to DNCSI that she possessed a "friend's notary stamp, would use the stamp, and would sign her friend's name when using the stamp." (Id. ¶ 44.) DNCSI also alleges that in December 2018, Mr. Heydari-Dastjerdi "corroborated" the forged notarizations. (Id. ¶ 45.)

F. The Instant Lawsuit

DNCSI brings four claims against Defendants. Count I is for breach of the Commission Agreement and the Amended Commission Agreement against Isabella for failure to pay all amounts due under the agreements and for causing DNCSI to submit forged documents in the course of its services. (Id. ¶¶ 46-62.) DNCSI seeks $175,572.41 in compensatory damages, 15% interest per annum on the amounts not timely paid by Isabella, costs, and attorney's fees. (Id. ¶¶ 60-62.) DNCSI brings Count II in the alternative for breach of the Independent Contractor Services Agreement against Isabella and Landmore, seeking $5,650.82 in compensatory damages. (Id. ¶¶ 63-70.) Finally, DNCSI seek to pierce the corporate veils of Landmore and Isabella as to the Dastjerdis (Count III) and as to each corporate entity (Count IV). (Id. ¶¶ 71-92.)

MOTION TO DISMISS STANDARD

Motions to dismiss under Rule 12(b)(6) test the legal sufficiency of a complaint. Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). To survive a Rule 12(b)(6) motion, the complaint "must contain sufficient factual matter, accepted as true, to ...