Evans v. Hood

ANDIA EVANS, Plaintiff, v. JOANN HOOD, et al., Defendants.

Civil Action No. 1:19-cv-03346 (CJN)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

July 2, 2020

MEMORANDUM OPINION

Andia Evans bought a townhouse from JoAnn Hood in 2014. Am. Compl. ¶¶ 12, 14, ECF No. 3. Hood provided seller financing for the purchase. Id. ¶ 14. Five years later, as Evans faced an impending balloon payment and foreclosure, she brought this suit against Hood and several other people and entities involved in the transaction. See generally id. Defendants collectively move to dismiss or, in the alternative, for summary judgment. See, e.g., Defs. JoAnn Hood & JoAnn Hood Living Tr.'s Mot. to Dismiss Am. Compl., or in the Alt., Mot. for Summ. J., ECF No. 14. The Court agrees that Evans's federal claims fail and therefore dismisses them, relinquishes supplemental jurisdiction over the remaining claims, and dismisses the case.

I. Background

Evans sought to purchase a home in 2014.¹ Am. Compl. at 1. Her income at that time was relatively low, id. ¶ 13, but she had recently inherited some assets that she intended to applytoward a down payment, id. ¶ 8. Evans engaged Defendant Carolyn Wilson, a friend who worked as a realtor. Id. ¶ 7. Unbeknownst to Evans, however, Wilson was not licensed. Id. Because Evans had poor credit, Wilson recommended that she pursue seller financing so as not to have to apply for a traditional loan from a financial institution. Id. ¶ 9. Wilson later brokered a deal between Evans and Hood. Id. ¶¶ 10-12. Hood agreed to sell Evans a townhouse in the Fort Lincoln neighborhood in Northeast Washington for $330,000. Id. ¶ 12. Under the deal's terms, Evans made a $100,000 down payment and Hood financed the remaining $230,000 over a five-year period with a balloon payment to occur at the term's end. Id. ¶¶ 12, 14. The sale closed in mid-to-late 2014.² Id. ¶ 14.

Evans alleges that the HUD-1 Settlement Statement omitted any mention of a balloon payment (or even the amortization period, interest rate, or total amount of interest to be paid). Id. ¶ 15; Pl.'s Settlement Statement ("HUD-1") at 3, ECF No. 3-1 at 6. Moreover, Evans alleges that Wilson failed to disclose that she was not a licensed realtor and that Hood's husband, Defendant David Hood, was the realtor of record on the deal. Am. Compl. ¶¶ 7, 18. Several days after closing, David Hood and Wilson allegedly executed a "Settlement Extension Addendum" that modified the realtor's name on the paperwork to Stuart Reynolds, a licensed realtor for whom Wilson often worked. Id. ¶¶ 17-19. Evans alleges that her signature was forged on that addendum. Id. ¶ 19. JoAnn and David Hood recorded the Settlement Extension Addendum more than a year after closing. Id. ¶ 20.

In July 2017, Evans tried to refinance to a traditional mortgage. Id. ¶ 21. At that point she discovered the Addendum, as well as the fact that JoAnn Hood was not a licensed loan originator and that Evans lacked critical documentation (a "Condominium Resale Package") without which she was unable to sell or refinance the property. Id. ¶ 22. There is no allegation that Hood has ever foreclosed, and Evans apparently still occupies the property. Id. at 1.

Evans filed this suit on November 6, 2019. See generally Compl., ECF No. 1. Her original Complaint contained only D.C.-law claims and expressly alleged that this Court had diversity jurisdiction. Id. ¶ 1. But the Complaint also alleged that both Evans and Defendant Wilson were District of Columbia residents, a fact that would have destroyed complete diversity among the Parties and thus precluded federal jurisdiction. Id. ¶ 2; see also 28 U.S.C. § 1332; Strawbridge v. Curtiss, 7 U.S. 267, 267-68 (1806). Perhaps detecting this flaw in her pleading, Evans then amended as of right before serving Defendants. See generally Am. Compl.; see also Fed. R. Civ. P. 15(a)(1)(A).

The Amended Complaint adds two federal counts and pleads federal-question jurisdiction under 28 U.S.C. § 1331. See Am. Compl. ¶¶ 1, 26-41.³ It lodges claims against four separate Defendants: JoAnn Hood, David Hood, the JoAnn Hood Living Trust, and Carolyn Wilson. Id. ¶¶ 2-4. It contains eight counts: (I) a violation of federal Truth in Lending Act (TILA), 15 U.S.C. §§ 1639b, 1640, as to JoAnn Hood, Am. Compl. ¶¶ 26-37; (II) a violation of the federal Secure and Fair Enforcement (SAFE) Mortgage Licensing Act of 2008, 12 U.S.C. § 5103, as to JoAnn Hood and the Trust, Am. Compl. ¶¶ 38-41; and several counts under D.C. law alleging violations of the Mortgage Lender and Broker Act (MLBA), D.C. Code §§ 26-1113-14, and theConsumer Protection Procedures Act (CPPA), D.C. Code § 28-3904, fraud, undue influence, and civil conspiracy, Am. Compl. ¶¶ 42-70. As to remedies, Evans seeks declaratory relief, rescission of the mortgage contract, compensatory and punitive damages, and fees. Id. at 16-17.

Defendants filed three separate Motions to Dismiss. David Hood argues that Evans's claims against him are barred by the statute of limitations and that Evans fails to state a claim. See generally Def. David Hood's Statement of P. & A. in Supp. of Def. David Hood's Mot. to Dismiss, or in the Alt., Mot. for Summ. J. ("David's Mot."), ECF No. 13-1. JoAnn Hood and the Trust (represented by separate counsel from her husband) make the same arguments as to the claims against them. See generally Def. JoAnn Hood and Def. JoAnn Hood Living Tr.'s Statement of P. & A. in Supp. of Defs.' Mot. to Dismiss Am. Compl. or in the Alt., Mot. for Summ. J. ("JoAnn's Mot."), ECF No. 14-1. Wilson, who, like Evans, is a D.C. resident, argues that the Court lacks subject matter jurisdiction over the claims against her individually because of the lack of diversity or a federal question and that the claims are time-barred. See generally Def. Wilson's Mot. to Dismiss ("Wilson's Mot."), ECF No. 15.

II. Legal Standards

A. Jurisdiction

"'Federal courts are courts of limited jurisdiction,' possessing 'only that power authorized by Constitution and statute.'" Gunn v. Minton, 568 U.S. 251, 256 (2013) (quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)). To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(1), Plaintiff bears the burden of establishing the Court's subject-matter jurisdiction. Arpaio v. Obama, 797 F.3d 11, 19 (D.C. Cir. 2015). When evaluating a motion to dismiss under Rule 12(b)(1), the court "assume[s] the truth of all material factual allegations in the complaint and 'construe[s] the complaint liberally, granting plaintiff the benefit of all inferences that can be derived from the facts alleged' and upon suchfacts determine[s] jurisdictional questions." Am. Nat'l Ins. Co. v. FDIC, 642 F.3d 1137, 1139 (D.C. Cir. 2011) (quoting Thomas v. Principi, 394 F.3d 970, 972 (D.C. Cir. 2005)). Without subject-matter jurisdiction over a claim, the Court must dismiss it. Arbaugh v. Y&H Corp., 546 U.S. 500, 506-07 (2006).

B. Failure to State a Claim

"A pleading that states a claim for relief must contain . . . a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Although the Court accepts all well pleaded facts in the Amended Complaint as true, "[f]actual allegations must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). "While a complaint . . . does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of [her] entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 554-55 (internal quotations omitted). The claim to relief must be "plausible on its face," enough to "nudge[ the] claims across the line from conceivable to plausible." Id. at 570.⁴

III. Analysis

A. Supplemental Jurisdiction Over Claims Against Wilson

Only three of the Amended Complaint's eight counts contain any claims against Carolyn Wilson, who acted as Evans's real estate agent during the sale: Count V (fraud), Count VI (undue influence), and Count VII (civil conspiracy). Am. Compl. ¶¶ 54-66. All three are D.C. common-law claims. Id. For the purposes of her Motion, Wilson concedes that she is a D.Cresident as the Complaint alleges. See Am. Compl. at 1; Wilson's Mot. at 2-3. Evans is also a D.C. resident. Am. Compl. ¶ 2.

Wilson therefore argues that there is neither diversity between her and Evans nor a federal question as to the specific counts against her, so the Court lacks subject-matter jurisdiction as to her individually. See Wilson's Mot. at 2-4. This argument badly misapprehends the nature of federal-question jurisdiction under 28 U.S.C. § 1331. "Federal question jurisdiction . . . is independent of other statutory grants of jurisdiction to the district courts. Thus the citizenship of the parties, so critical to the invocation of diversity of citizenship jurisdiction, is irrelevant to federal question jurisdiction." 13D Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 3561 (3d ed. 2020) (citing Duignan v. United States, 274 U.S. 195, 197 (1927)) (other citations omitted).

Although Evans lodges no federal claims against Wilson herself, Evans naturally points to 28 U.S.C. § 1367, which permits the Court to exercise discretionary, supplemental jurisdiction over Evans's claims against Wilson so long as there is a federal question somewhere in the Complaint (there is) and the D.C.-law claims "involve common issues of proof and the same witnesses." Pl.'s Opp'n to Defs.' Mots. to Dismiss and Mots. for Summ. J. ("Opp'n") at 7-9, ECF No. 22 (quoting United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 725 (1966), superseded by statute on other grounds as stated in Diven v. Amalgamated Transit Union Int'l and Local 689, 38 F.3d 598, 600 (D.C. Cir. 1994)). Faced with Evans's response, Wilson seems to have abandoned the argument entirely—her Reply does not mention jurisdiction...