ROBERT CARROLL an d MONICA

CA RR OLL, P lai nt iffs,

v. F REMONT INVESTMENT & LO AN, et. al, De fend ant s.

UNITED STAT ES DIS TRICT COURT F OR THE D ISTRIC T OF CO LU M BIA

Ci vi l A cti on 08 -00 90 0 (H HK)

MEMORAN DUM OP IN ION AN D O RD ER R o b ertC arro l l an d

h i s d au gh t er

M o n i caC arro l l b ri n g th i s ac t i o naga i n s ttwo m o rt gage lender s, Fre mont I nvestment and L oan (“ Fr emont”) a nd L itton L oan Servic ing L P (“L itton”),
s e v e r a l c o mp an i e s i n v o l v e d i no b t a i n i n g th e i r

l o an , i n c l u d i n g J M J Ap p r a i s a l S e r v i c e s , LLC (“ JMJ”) , a

nd se ve ra l in div idu a ls who are of fi c e rs or e mpl oy e e s o f t

ho se c omp anie s. Th e Carr oll s bringa number

of common law c laims and a District of Columbia statutory claim in connec tion with a loan that F remont made to them, and that def endants a lleg edly

falsified a

nd knew the Carr oll s c ou ld n ot a ff

or d. F re mont, L itt on , a

nd thr e e of the ind ivi du a l de fe nd ants have mov e d to dismiss the Carr olls’ claims or for summar y judgme nt. Upon considera tion of the motions, the op po sit ion s th e re to, and

the re c or d o f t

his c a se , th e Cou

rt c on c lud e s th a t de fe nd ants ’ m oti on s to dismiss should be g rante d in part and de nied in part a nd that their motions for summary judgme nt should be denied. I. BACKG ROUND The Car rolls are owner s by

joint tenancy

with Annette Carr oll of a townhouse in the District of Columbia. Robert Carroll is elder ly and disabled; Monica

Carroll is sever ely

disabled2

by dy sle xia. Th e Carr oll s p ur c ha se d th e ir ho me in 1 99 2 f

or $1 61 ,5 00 . In 2 00 5, the Carr oll s applied for

a loan to re financ e their e x isting loan on their home , which had a n interest rate of 6.4 perc ent. Def

endant Pre mier Mortg ag e Solutions, S ervic es, Inc. (“ Premier Mortg ag e”) broker ed the mor tg a g e and loa n o n b e ha lf

of F re mont, a

nd on e of Pr e mie r M or

tg a g e ’s e mpl oy e e s, de fe nd ant F ra

nk Ok e bu g wu , p re pa

re d th e loa

n a pp lic a tio n. Ac c or din g to t he Carr oll s, the te rm s of the loan w ere supposed to include an inter est rate of 7.4 per cent a nd monthly

pay ments of $1,887. The fina l loan, howeve r, issued in J uly 2005 and sig ned by

the Carr olls, included a varia ble intere st rate that c limbed to 11.5 perce nt and monthly pay ments of $2,748. The c losing costs on the loan, ac cordingto the Carrolls, wer e appr ox imately one-third of

the value of

the loan; the Carr olls rece ived $21,593 and c losing c osts were $10,385. The Car rolls state that defe ndant L itton now holds t he mortg ag e. To ob ta in t

he loa n, the Carr oll s a lle g e that Pr e mie r M or tg a g e g ro ssl y

ov e rs tate d th e ir income and a ssets and that JM J ’s appr aisal g rossly overva lued their home. The y state that Premier Mortg ag e re quired the Car rolls to provide written ver ification of their income, and that they understood that such ve rification was essential to qualify ing f or and obta ining the loa

n. The Carrolls asser

t that they provided such ve rification, showing that Monica Carroll ea

rned $2,706 per month and Rober

t Carroll ea

rned $1,107.40 pe r month. The loan a pplication, howeve r, stated that Monica Ca

rroll’s monthly

income wa s $5,465 per month and Rober t Carroll’s wa s $1,386.25 per month. Simil arly , the Carr olls state that the District of Columbia Office of Tax and Assessments va lued their home at $461,230 for tax y ear October 2004 to September 2005, but the loan application stated that the marke t value of the ir home wa s $650,000.3

The Car rolls alleg e that def

endants violated the District of Columbia’s consumer protec tion laws by

making an unconsc ionable loan, de fra uded them, ac ted neg lige ntly , and br e a c he d a

fi du c iary duty ow e d to the m. H a d th e y kn ow n a nd un de rs too d it s te rm s, the Carr oll s state that they

would not have a g ree d to the Fr emont loan. In September 2006, the Carrolls broug ht a similar lawsuit ag ainst Fre mont in thi s Court. See Carroll

v. Frem ont Inve

stment &Loan , 1:06-cv-01641 ( September 22, 2006) . In connec tion with that case , in October 2006, Fr emont sent the Carr olls’ attorney a four -pag e settlement
a g re e me nt w ithan atta c he d p ay me nt p lan. B e c a

us e of the re le va

nc e of the fi rs t pa g e to t

his dispute, this memorandum replicates it in whole: FORB EARANCE AGREEMENT F re mont Inv e stm e nt & L oa n, (“ L e nd e r” ) a

nd MO NI CACA RRO L L ; RO B ERT CA RRO L L(“ B or

ro we r” ) a c kn ow le dg e and a g re e that: ACKNOWL EDGMENTS 1. On 9/2 8/2 00 5 B or

ro we rs e xec ute d th a t c e rt a in p ro mis sa ry no te (“ the No te ” ) i n the fa c e amou

nt o f $ 28 8, 23 0, wh ic h e vid e nc e s a loa n in that amou

nt. Th e No te is secur ed by

a De ed of Tr

ust or Mortg ag e (“ the Mortg ag e”) upon the Property at 3328 17 ST NW, (“The Proper ty ”). The Note and the Mortg ag e ar e her eaf ter TH collectively

ref err ed to as “ the L oan” or

the “L oan Doc uments.” 2. Bor rowe r has de faulted on the L oan. $14,796.44 is delinquent (“ the Def ault”) and $287,213.67 is due. (“ The De bt.”) 3. Bor rowe r ac knowledg es the De fault and the Debt and f urther a cknowledg es Bor rowe r has no de fense or leg al objection to the Note, the Mortg ag e, the L oan or the De bt. 4. B or ro we r h a s r e qu e ste d L e nd e r t o te mpo ra ri ly fo rb e ar e nf

or c e me nt o f i ts r ig hts un de r t he L oa n to be tte r e na

ble B or ro we r t o c ur e the De fa

ult
. 5. L ender

has agree d to temporarily forbe ar e nforc ement of its rig hts under the L oan pursua

nt to the terms of this Forbe ara nce A g ree ment. (“The Ag ree ment.”)4

6. In consideration of the mutual benef its of this Agre ement, B orrowe r and L e nd e r a g re e a s f

oll ow s: F re mont Mo t. D ism iss Ex. B . Pa g e tw o o f t he a g re e me nt i s h e a de d “ AG REE MENT S” and is followed by

sevente en par ag raphs on pa g es two throug h four. The se par ag raphs r equire ins ta llm e nt p ay

me nts , d e sc ri be wh at w ill ha pp e n if the Carr oll s b re a c h th e a g re e me nt, and state that du ri ngthe tim e that th e Carr oll s f ull y pe rf or m, F re mont w ill no t ta

ke any ste ps to p ro se c ute the fo re c los ur e , amon g oth e r t hin g s. Re le va

nt t o th is c a se , p ara g ra

ph14 state s: 14. BO RROW ER REL EASE OF L ENDER. B orrowe r her eby rele ases L ender

of any and all cla ims known or unknown, which B orrowe r has a g ainst L ender which in any way arise f rom or re late to the L oan, the De fault or the D ebt. B orrowe r a lso sp e c if

ic a lly wa ive s any

ri g ht i t ha s und e r a

ny statut e , w hic h p ro vid e s th a t a re le a se do e s n ot e xten d to c la ims , w hic h th e re le a so r d oe s n ot k no w a nd su sp e c t to e xist in his fa vo r at th e tim e of

e xec uti ngthe re le a se , w hic h, if kn ow n b y

him , would materia lly

aff ect his settlement with the re lease e. Id
. I t is undisput ed that the Car rolls signe d at the bottom of the first pag e of this agree ment
and se nt t hat si g ne d f

ir st p a g e ba c k to F re mont in No ve mbe r 2 00 6; t

he imp or t of tha t si g natur e is in dispute. I n J anuar

y 2007, the Carr olls moved to dism iss their first lawsuit without prejudice. Ac c or din gto F re mont, t

he Carr oll s d ism iss e d th a t la ws uit a s p art of a se ttl e me nt a g re e me nt w ith Fr emont. In May

2008, the Carr olls brought the instant law suit.

II. AN AL YSI S This case comes be fore the Court upon defe ndants’ motions to dism iss or for summary judgme nt. There are ten def endants in this case : (1) F remont, the orig inal lender ; (2) L itton, alleg edly the assig nee of

the loan; (3) Pre mier Mortg ag e, a mor tga g e broke rag e compa

ny (which may have c hang ed its name to Smith-Mey ers Corpor ation); (4) Smith-Mey ers Corpor ation, a5

mortg ag e broke rag e compa ny ; (5) Jeffre y

Smit h, the pre sident of Smith-Mey ers Corpor ation, (6) Fr ank Oke bug wu, a loan of fice r for Premier Mortg ag e Solutions, S ervic es, Inc. and/or Smit hMey ers Corpor ation; (7) J.G. Enterprises L L C, the owner of the trade name use d by

Premier Mortg ag e; (8) Sheila L ocke, a n ag ent or e mploy ee of

Premier Mortg ag e; (9) JMJ , an appr aisal company ; and (10) Shannon I ng ram, a n office r or e mploy ee of

J MJ who per formed the appra isal on the Carr olls’ home. De fe nd ants F re mont and

L itt on are re pr e se nte d b y

c ouns e l and

have fi le d mo tio ns to dis mis s o r f

or summa ry jud g me nt [# # 4 9, 65 ]. D e fe nd ants Ok e bu g wu , Ing ra m and Smit h (c o l l ec t i v el y , “t h e i n d i v i d u al d ef en d an t s ”) ar e p ro ce ed i n g pr o s e and have fi le d mo tio ns to dismiss or for

summary judgme nt [ ## 67, 68, 69]. The other five de fenda nts have not ente red appea ranc es nor r esponded to the Car rolls’ amende d complaint. The motions to dism iss or for summary judgme nt of Fr emont, L itton, and the individual defenda nts will be addresse d in turn. A. F r e m ont ’s M ot ion to Di sm iss orfor Sum m ar y J udgm e nt Fr emont makes two princ ipal arguments in its m otion to dis miss or for summary judgme nt. First, Fr eemont ar g ues that the Court should enfor ce the settlement ag ree ment betwee n it and the Carr olls and dismis s the Carrolls’ amended c omplaint ag ainst Fre mont. Se c on d, it a

rgue s th at e ve n if

the Court do e s n ot e nf

or c e the se ttl e me nt a g re e me nt, it s ho uld dis mis s th e Carr oll s’ ame nd e d c omp la int fo r f a ilure to s tate a

c la im und e r F e de ra l Ru le of Civ il Procedur e 12(b) (6). The Court turns to these arguments.

1. Mo tio n to Enf

or c eSe ttl e ment Ag re e ment Fr emont’s motion to enforce the settlement agree ment depends upon materials beyond the alleg ations in the amende d complaint or docume nts attache d to the compliant, and ther efor e the6

Court must convert it to a motion for summary judgme nt. Marshall Co. Health Care Auth. v. Sh ala la , 9 88 F .2 d 1 22 1, 12 26 (D .C. Cir . 1 99 3) . T he Carr oll s r e sis t su c h a c onve rs ion

pr ior to dis c ov e ry , p ro vid ingthe Court wi th a F e de ra l Ru le of

Pr oc e dure 56 (f

) s tate me nt.

“ Summary

jud g me nt o rd ina

ri ly is p ro pe r o nly

a ft e r t he pla int if

f h a s b e e n g ive n a de qu a te time for discove ry .” In

fo. Ha nd lin g S e rv s. , I nc . v . D e f. A uto ma te d Prin ting S

e rv s. , 338 F.3d 10 24 , 1 03 2 ( D. C. C ir . 2 00 3) (i nte rn a l qu otatio ns omi tte d) . T he F e de ra l Ru le s p ro vid e that a
c ourt “ may . . . d e ny the mot ion

[or ] or de r a

c on tin ua nc e to e na

ble
. . . d isc ov e ry” if

“ a pa rt y op po sin gthe mot ion

sh ow s b y a ff ida vit tha t, f or sp e c if ie d r e a so ns , it

c ann ot p re se nt f

a c ts
e sse nti a l to jus tif

y its op po sit ion .” F e d. R. C iv. P. 5 6( f) . Wh e re “ pla int if fs ’ p a pe rs fa il t o identify any fac ts essential to opposing [a motion for summary judgme nt] as to which discove ry is neede d,” howe ver, summar y judgme nt may

be appr opriate. See Curtin v. United Airlines, Inc

. , 275 F.3d 88, 91 ( D.C. Cir. 2001). Her e, the Car

rolls have moved f

or a c ontinuance unde r Rule 56(f) , and their attorney has submitt ed a Rule 56( f) de clar ation. SeePls.’ Opp’n to Fre mont Mot. Dism iss Ex . A. The decla ration states that “ [p] laintiffs show her ein what f acts a re sought and how they

will be obtained.” Id . I t then states that “[d]i scover y will show that there wa s no binding settlement ag ree ment.” Id . ¶ 4. This statement is entirely conclusory . The de clar ation fails to identify any fa c ts e sse nti a l to op po sin g F re mont’ s mo tio n f or summa ry jud g me nt t

hat th e Carr oll s w ou ld obtain throug h discovery

(i.e., fa cts that would show that there was no bindingsettlement ag ree ment) or to g ive any rea son for why

the Carr olls have bee n unable to obtain the f acts prior to d isc ov e ry , o r h owthe y wo uld ob ta in t he m thro ug h d isc ov e ry . T he re fo re , th e Court wi ll
c on sid e r F re mont’ s mo tio n f or summa ry jud g me nt.Under F ED . R. C IV . P. 56 , s umm ary jud g me nt s ha ll b e g ra

nte d if the ple a din g s, 1 depositions, answers to interr og atories, a dmissions on file and a ffidavits show that ther e is no g e nu ine iss ue of

mate ri a l f

a c t in dis pute and

tha t th e mov ingpa

rt y is e nti tle d to jud g me nt a s a matter of la

w. Mater ial fac ts are those “that mig ht affe ct the outcome of the suit under the g overninglaw.” Anderson v. Liberty Lobby, I nc. , 4 7 7 U. S
. 2 4 2 , 2 4 8 (1 9 8 6 ). Inco n s i d er i n g a mot ion fo r s umm ary

jud g me nt, the “ e vid e nc e of the no n- mov ant i s to be be lie ve d, and a ll justifiable infere nces a

re to be drawn in his favor.” Id . at 255. The non- moving pa rty ’s opposition m ust consist of more than mer e unsupported a lleg ations or denials a nd must be supported by

aff idavits or other c ompetent evidenc e settingforth spec ific fa cts showing that there is a g enuine issue f

or trial. F ED . R. C IV . P. 56 (e ); Ce lote xCor p. v . Ca tre tt , 477 U.S. 317, 323-24 (1 98 6) . T he no n- mov ingpa rt y is “ re qu ir e d to pr ov ide e vid e nc e tha t w ou ld p e rm it a

re a so na ble jury to find” in its favor. Laningham v. United States Navy , 813 F.2d 1236, 1242 ( D.C. Cir. 1987). I f the e vidence is “mere ly colora ble” or “not sig nificantly

probative,” summary

judgme nt may be g rante d. Anderson , 477 U.S. at 249-50. 7 Fr emont argues that it should be g rante d summary judgme nt beca

use the Car

rolls entere d int o a se ttl e me nt a g re e me nt w ithF re mont th a t w a ive d f utu re le g a l a c tio n a g a ins t F re mont w ith respe ct to the loan at issue in this case
. Fr emont points to t he four -pag e settlement a g ree ment 1 and attac hed pay

ment plan. Pag e thre e of the ag ree ment states, “B orrowe r her eby rele ases L e nd e r o f a

ny and a ll c la ims kn ow n o r u

nk no wn , w hic h B or

ro we r h a s a g a ins t L e nd e r whic h in any way arise f rom or re late to the L oan, the De fault or the D ebt.” F remont Mot. Dismiss Ex . B at 3. The a g ree ment also states that “[d]uring the ter m of this Agr eeme nt and while B orrowe r fully perf orms under this Ag ree ment, L ender will not take any

further steps to prosecute the fore closure,” id . at 2, and that “ [i ]f Borr ower succe ssfully

completes the A g ree ment, but stil l has not cure d the Def

ault, L ender

may , but is not obl iga

ted to, extend the Ag ree ment on the same or differ ent terms,” id . at 3. Attache d to the ag ree ment was a pay ment plan setting out dates and amounts to be paid. The a g ree ment is signed at the bottom of pag e one by the Carr olls and on pag e four by a F remont re prese ntative.8

F re mont c on te nd s th at th e Carr oll s a g re e d to thi s se ttl e me nt a s e vid e nc e d b y the ir signatures. F remont fur

ther a rgues that the Car

rolls acted c onsistent with the terms of the ag ree ment and in furthe ranc e of the ag ree ment when they dismiss ed the law suit, and made the initial pay ment and thre e subseque nt pay ments require d under the pay ment plan. Se e id
. E x. C–E. Finally , Fr emont contends that it also ac ted consistent with the settlement agree ment when it cease d its efforts to for eclose on the Carr olls’ home, seeF re mont’ s Re ply to P ls. ’ O pp ’n

to Fr emont Mot. Dismis s Ex . 1 ¶ 12, and of fer ed them a loa

n modification on Marc h 27, 2007 that would reduc e the inter est rate to 7.5 perc ent, seeFr emont Mot. Dismis s Ex . F. The Car rolls rejoin that there is no binding settlement agree ment that includes a le g al rele ase be cause it was neve r their intention to agree to the entire f our pag e contr act. Instead,
acc ordingto the Carrolls, by signingand sendingback only the first pag e, they

made a counter offe r to Fr emont, an agree ment consisting only of the fir st pag e. As e vidence that they did not intend to ag ree to the entire a g ree ment, they point to the fact that on the f irst pag e of the ag ree ment, they

struck out a pr ovision which rea ds, “B orrowe r ac knowledg es the De fault and the Debt and f

urther a cknowledg es B orrowe r has no de fense or leg al objection to the Note, the Mortg ag e, the L oan or the Debt.” SeePls. ’ O pp ’n to F re mont Mo t. D ism iss Ex. 2 3. Str iki ngthi s pr ov isi on , th e y

argue , is inc on sis te nt w ithan inte nt t o a g re e to t he e nti re fo ur

pa g e a g re e me nt, wh ic h in c lud e d th e le g a l r e le a se , a s is the ir dis mis sa l of

the pr ior su it without

prejudice. The Carr oll s f ur the r p oint to Mo nic a

Carr oll ’s de c laratio n, wh ic h s tate s: 40. The a cknowledgment to the rele ase w as stripped of the rema ining pa g es that we would not agree to and it was sig ned and pa ragraph 3 of

pag e 1 wa s st ru c k thro ug h. We r e fu se d to sign th e 4- pa g e a g re e me nt. 41. We never

ag ree d to a re lease and we struck throug h ¶ 3.9

42. The dismissal of the lawsuit was ba sed on the a dvice of counsel a nd we pla nn e d o n r e fi lin g it. I t w a s n ot a c on dit ion

to a de a l w ithF re mont. Pls.’ Opp’n to Fre mont Mot. Dism iss Ex . E. The Car rolls also contend that the pa y ments they
ma de to F re mont w e re no t in c on fo rm ity

wi th t he a g re e me nt, but w e re me re ly the monthl y
amou nt d ue on the loa n, and that F re mont’ s p ur

po rt e d o ff e r o f a loa n mo dif ic a tio n h a d n oth ingto do with the settlement ag ree ment, but was a simple for m letter. Fr emont replies that the Ca rrolls admit that their counse l rec eived a four- pag e docume nt with a one- pag e pay

ment plan. The only

corr espondenc e betwe en the Car rolls’ attorney

and F re mont f oll ow ingthe Carr oll s’ re c e ipt of the fo ur -p a g e a g re e me nt i s a le tte r s tatin g , “ Ijus t
rec eived the ‘ For

bear ance Ag ree ment.’ I t was fax ed her e late yesterda y . Paragraph 3 state s conditions that we did not discuss. Ithink this para g raph g oes to [si c] far a nd ask that it be struck.” SeePls.’ Opp’n to Fre mont Mot. Dism iss Ex . 20. Fr emont points out t hat this letter do e s n ot s tate any

ob je c tio n to the re ma ini ngtw e nty-t wo pa ra g ra ph s tr ans mitte d to the Carr oll s or say any thing a bout pag es two throug h four of the agree ment. Fr emont states that it did not object to striking pa

ragraph thre e, and thus a cce pted this modification to the ag ree ment. The
no tio n th at th e Carr oll s a g re e d o nly to t he fi rs t pa g e , a c c or din g to F re mont, i s unte na ble , b e c a us e if that wer e the c ase, the ag ree ment would conclude with the last line of the first pa g e of the ag ree ment, which states, “ In consideration of the mutual benef its of this Agre ement, B orrowe r and L ender

ag ree as follows:”. See Pls.’ Opp’n to Fre mont Mot. Dism iss at 1. In the District of Columbia Circuit, the issue of “[w]hether par ties have r eac hed a settlement is a question of contr act law .” United States v. Mahone y , 2 47 F .3 d 2 79 , 2 85 (D .C. Cir . 2 00 1) ; se e Br own v . B ro wn , 3 43 A. 2d 59 , 6 1 ( D. C. 1 97 5) (“ In th is j ur isd ic tio n, it i s w e ll10

established that settlement a g ree ments are entitled to enforc ement under g ener al principles of contra ct law . . . .” ). State law g overns the e nforc ement of se ttlement ag ree ments. Makins v. Di str ic t of Colum bia , 277 F.3d 544, 547 ( D.C. Cir. 2002). In the District of Columbia, a
c omp le te e nf

or c e a ble c on tr a c t e xists wh e n th e re is ( 1) an a g re e me nt a s to a ll the mate ri a l te rm s; and (2) an intention of the pa rties to be bound.” Ho od v . D ist ric t of Colum bia , 211 F. Supp. 2d 176, 179 (D.D.C. 2002). “ The District of Columbia adhe res to the ‘ objective law of contra cts,’ meaningthat the Court must look at the parties’ objec tive manifestations of intent in interpre ting settlement ag ree ments.” Id . at 18 0; see also He rcules &Co., Lt d. v. Shama Re st. Corp. , 613 A. 2d 91 6, 92 7 ( D. C. 1 99 2) (“ Th e fi rs t and mos t im po rt ant s te p in

a sc e rt a ini ngtha

t in te nt i s
ex am i n at i o no f t h e c o n tra cti t s el f, ” f o r “ i f ad o cu m en ti s fa ci al l y un am b i gu o u s , i t s l an gu age should be relied upon a s providing the best objective ma nifestation of the pa

rties’ intent.”) (interna l quotation omit ted). “The deter

mination of whether

an enf orce able c ontrac t exi sts, when base d on the contra ct documents, is a question of law . . . .” Rosenthal v. Nat’l Produce Co. , 573 A.2d 365, 369 n.9 (D.C. 1990). The party

asser ting the e x istence of

a settlement a g ree ment bear s the burden of pr oo f a nd mus t sh owthat an e nf

or c e a ble c on tr a c t e xists a s to a ll e le me nts inc lud inga g re e me nt t o all materia l terms, and the intention of the pa rties to be bound. Kilpat rick v . Paige , 193 F. Supp. 2d 145, 152 (D.D.C. 2002). To de termine whe ther the pa rties intended to be bound, the Court must ex amine the pa

rties objective ma

nifestations of intent. See A kassy v . W illiam Penn Apartments Ltd. , 891 A.2d 291, 299 (D.C. 2006) ( “[T] he re asonable person standa rd is applied both to the circumstanc es surroundingthe contra ct and the c ourse of conduct of

the par ties under the contra ct.”) (citing1901 W yoming Av e. Coop. Ass’n v. Lee , 3 45 A. 2d 45 6, 46 1- 62 (D .C.11

1975)). “ When there is a g enuine dispute a bout whether

the par ties have e ntere d into a binding settlement, the district court must hold an evide ntiary hear ing.” Mahoney , 247 F. 3d at 285. F re mont argue s th at by

signin g the se ttl e me nt a g re e me nt o n th e fi rs t pa g e , th e Carr oll s ob je c tiv e ly manif e ste d th e ir

int e nt t o a g re e to t

he e nti re se ttl e me nt a g re e me nt. Th e Carr oll s respond that they

only signe d (and only

ag ree d to) the first pag e of the settlement ag ree ment and that the first pag e constituted the e ntirety of the e nforc eable contra ct. Fr emont replies that whe re the Carr olls signed the se ttlement ag ree ment is imm ater ial. Th e re is s c ant l aw a dd

re ssi ngthi s is su e . T he sin g le pe rt ine nt D istri c t of Col umb ia

c a se is ambig uous. See A ltman v. De J ong , 113 A.2d 747 (D.C. 1955). While it may not matter whe re a party signs a contra ct, see M

aster Palletizer Sys., Inc . v. T.S. Ragsdale Co., Inc. , 725 F. Supp. 1525, 1531-32 (D. Colo. 1989) ( “A pa rty need not sig n ever

y pag e of a contra ct for the whole of the document to be e ffe ctive.”) , this is onl y true insofa

r as ther e is a mee ting of

the minds and an intention to be bound, se e Pe tri e v. Haddoc k, 119 A.2d 45, 46-47 (Pa. 1956) (“The re is no require ment that a contr act be signe d at any particula r plac e so longas the sig natories attest the meetingof their minds on the basis of the a g ree d-upon writing s and their intention to be obligated ac cording ly .”). Her e, the ve ry

question is whether the Carrolls intended to be bound. T here fore , the Court must look t o other objec tive manifestations of intent. The Court concludes that Fre mont has not
m eti t s b urd en o f s h o wi n g th atan en fo rc eab l e c o n tra ctex i s t s atth e s u m m ary j u d gm en ts t age beca use it has not shown that the Carr olls’ objective manife stations evidence d an intent to be bound to pag es two throug h four of the contra ct. Afte r re ceivingthe four pa g e contr act, the12

Carr oll s f a xed ba c k o nly

the fi rs t pa g e of

the c on tr a c t and

signe d o nly

a t th e bo tto m of

the fi rs t pag e despite the fac t that the contra ct had initial or sig nature lines on eac h of the four pag es. Fur ther, the Court a g ree s with the Carrolls that the fa ct that they struck throug h para g raph three of the c ontrac t, which provided that they had “no de fense or leg al objection to the Note,” Fr emont Mot. Dismis s Ex . B, is inconsistent with an intent to be bound to par ag raph f ourtee n, wh ic h r e le a se d F re mont f ro m “ any and a ll c la ims kn ow n o r u

nk no wn , w hic h [th e Carr oll s] ha[ve] aga inst [ Fr emont] which in any way arise f rom or re late to the L oan.” Such “ claims . . . which in any

way arise f rom or re late to the L oan” a re “ leg al objections to the Note.” Nor do the Carrolls’ four

pay ments to Fre mont, alleg edly in acc ordanc e with the ter ms of the settlement
a g re e me nt, ind ic ate a

c le ar c ours e of

c on du c t c on sis te nt w iththe se ttl e me nt a g re e me nt b e c a us e three of these pa

y ments were simply

the monthly

amount due on the loan r eg ardle ss of any
se ttl e me nt a g re e me nt. Th e Court c on c lud e s th a t F re mont’ s mo tio n f or summa ry jud g me nt m

us t be denie d. 2. Motion to Dism iss un der Rules 12(b)(6) and 9(b) In the alter

native, F remont ar g ues that the Car rolls’ amende d complaint does not asser t claims for which re lief may be g rante d under F eder al Rule of Civil P roce dure 12( b)(6) and/or do not meet the par

ticularity require ments of Fe dera l Rule of Civil Procedur e 9(b) . A cour t may dismiss a complaint or a

ny portion of it for fa ilure to state a c laim upon which re lief may be g rante d. Fe d. R. Civ. P . 12(b)( 6). A c ourt consider ing a motion to di smiss under Rule 12(b)(6) must assume that all fac tual alleg ations in the complaint are true, e ven if they are doubtful. Be ll At lan ticCor

p. v . Two mb ly , 5 50 U. S. 5 44 , 5 55 (2 00 7) ; Kowal v. MCI Comms. Corp. , 16 F.3d 1271, 1276 (D.C. Cir. 1994) (notingthat a cour t must construe the complaint “liber ally in the13

plaintiffs’ fa

vor” a nd “g rant plaintiffs the be nefit of a ll inferenc es that ca n be der ived from the fa c ts a lle g e d” ). “ [A] pl a int if f’ s o bli g atio n to pr ov ide the ‘gro un ds ’ o f h is ‘ e nti tle [me nt] t o relief ,’” how ever , “re quires more than labels a nd conclusions . . . . Fa ctual alleg ations must be enoug h to raise a

rig ht of relief

above the speculative level.” Twom bly , 550 U.S. at 555 (interna l citations omitt ed). Rule 9( b) states: “I n all aver ments of fra

ud or mistake, the c ircumstance s constituting fr aud or mistake sha ll be stated with particula rity . Malice, intent, knowle dg e, and oth e r c on dit ion

of min d o f a

pe rs on may be ave rr e d g e ne ra lly .” F e d. R. C iv. P. 9 (b ). Un de r R ule 9( b) , th e c ourt

re qu ir e s “ the ple a de r . . . [to] st a te the tim e , p la c e and c on te nt o f t

he fa lse misrepre sentations, the fa ct misrepre sented a nd what wa s retaine d or g iven up as a conseque nce of the fr aud.” Kowal , 16 F.3d at 1278. Rule 9(b)’s pa rticularity require ment serve s sever al purposes, includingdiscourag ing nuisa nce suits, safe g uardingpotential defe ndants from fr ivo lou s a c c us atio ns of

mor a l turp itu de , a

nd g ua ra nte e ingde fe nd ants su ff

ic ie nt i nf or matio n to allow for pr epar ation of a r esponse. U.S. ex rel. W illiams v. Martin-Baker Aircraft Co., Ltd. , 389 F.3d 1251, 1256 ( D.C. Cir. 2004). Th e Court

ne xt ad dr e sse s F re mont’ s mo tio n to dis mis s a s to e a c h c ount o f t he Carr oll s’ te n- c ount c omp la int
. a. Count 1 - Violati on of the District of Columbia’s Consumer Protection

Law F re mont argue s th at c ount 1 mus t be dis mis se d p ur su ant t o F e de ra l Ru le s o f C ivi l Procedur e 9(b) and 12(b) (6). Ac cordingto Fre mont, count 1 essentially alleg es fr aud, and la cks the par ticularity require d by

Rule 9(b), instead c ontaining a series of conclusoryI t is not clear that Rule 9(b) applies to the Carr oll’s DCCP PA count, as F remont asse rts. 2 Whil e this Court has previously applied Rule 9(b) to a DCCPP A claim, it was in a c ase in whic h the re levant provisions of the DCCPPA specifica lly barr ed misrepr esentations and omissi ons of materia l fac t which tended to mislead. See W itherspoon v. Philip Morris Inc. , 964 F. Supp. 455, 464 (D.D.C. 1997). H ere , the re levant provision of the D CCP PA bars makingor enf orcing un c on sc ion a

ble te rm s and

do e s n ot c le arl y

re late to f

ra ud . Wh e the r o r n ot R

ule 9( b) a pp lie s is not disposit ive, howeve r, bec ause the Court concludes that the Carrolls’s ame nded complaint complies with Rule 9(b). 14 misrepre sentations made by unidentified def

endants. The Carrolls re

join that their amende d complaint g oes we ll bey ond the par ticularity require d by

Rule 9(b). Count 1 of the Carrolls’ amended c omplaint alleg es unconsc ionability under the District of Columbia’s Consumer Protection Proce dures Ac t, D.C. Code § 28-3901, et seq. (“D CCP PA”). Under that Act, it is unlawful to (r) m ake or

e nf or c e un c on sc ion a

ble te rm s o r p ro vis ion s o f s a le s o r l e a se s; i n applying this subsec tion, consideration shall be g iven to the following , and other fa c tor s: (1) knowle dg e by

the per son at the time cre dit sales are consummated that there was no re asonable probability of pay ment in full of the obligation by the consumer; . . . a

nd (5) that the pe rson has knowing ly taken a dvantag e of the inability of the consumer r easona

bly to protect his intere sts by rea son of ag e, phy sical or menta l infirmities, ignora

nce, illitera cy , or inability to understand the la

ng uag e of the ag ree ment, or similar fac tors . . . . D.C. Code § 28-3904(r ). In support of this count, the Carr olls alleg e that “F remont Investment 2 & L oan . . . knew

or should have known that Plaintiffs’ income had be en fa lsified and that appra ised value [sic] was fra udulently overstate d,” Am. Compl. ¶ 1, and that “[t]he Fre mont loan contains numerous unr easona ble costs that Def

endants kne w or should have known Plaintiffs could not aff

ord. De fenda

nts took advantag e of Rober t Carroll’s ag e and disa

biliti es and Monica Carroll’s disability

of extreme dy slex ia in secur ing the ir signa tures on the loan doc uments,” id . ¶ 4 5
. T h e C arro l l s fu rt h er

al l ege th at“[ a] tal l t i m es re l ev an th er ei n , th e D ef en d an tm o rt gage15

broker ag e firms, their a g ents and e mploy ees a nd the appr aiser w ere the ag ents of F remont. . . . Their a cts and omissions are bindingon Fr emont.” Id . ¶ 58 . T he Court

c on c lud e s th a t th e se
a lle g atio ns are no t f

ri vo lou s and

are su ff ic ie ntl y de ta ile d to a llo w F re mont to pr e pa re its response . See U

.S. ex re l. W

illiams , 3 89 F .3 d at 12 56 . T he Carr oll s’ ame nd e d c omp la int puts F re mont on

no tic e that th e Carr oll s a lle g e that F re mont kn e w, e ith e r a c tua lly or thr ou g h it s
a g e nts , th at th e re wa s n o r e a so na ble pr ob a bil ity tha t th e Carr oll s c ou ld p ay

the ir ob lig a tio n to Fr emont beca

use the income of the Car rolls and value of

their home we re know ingly falsified on the application. Fr emont further

argues that count 1 doe s not plead a va lid DCCP PA claim beca use the C ar r o l l s d o n o tp l e a d

a m at e r i a l m i s r e p r e s e n t a t i o no r o m i s s i o nth a th a s a

t e n d e n c y t o m i s l e a d
. In
su pp or t of thi s argume nt, F re mont c ite s Alickev. MCI Comm. Corp. , 1 11 F .3 d 9 09 , 9 12 (D .C. Cir. 1997). The pr ovisions of the DCCP PA at issue in Alicke , howeve r, we re pr ovisions (e) and (f) , eac h of which r equire d a tende ncy to misl ead. See D.C. Code § 28-3904 (e ) (“ misrepre sent as to a mate rial fa ct which ha s a tende ncy to misl ead” ); (f) (“f

ail to state a mate rial fa ct if such failure tends to mislead”). The provision of the DCCPP A that the Carr olls alleg e F remont vio late d, by

c on tr a st, do e s n ot r e qu ir e a mate ri a l mi sr e pr e se ntatio n o r o mis sio n th a t ha s a tendenc y to misl ead. See id. § 28-3904(r) (“ make or enfor ce unc onscionable te rms or provisions of sales” ). The Court c oncludes that it must deny Fr emont’s motion to dis miss as to count 1. b. Cou nt 2 - Dec laratory Judgment Fr emont argues that the Car rolls’ second c ount does not alleg e a va lid claim for a de c larator y jud g me nt a g a ins t F re mont, a nd is i ns te a d b ro ug ht a g a ins t L itt on . T he Carr oll s
re sp on d th at “ [w]hi le it i s n ot k no wn wi th c e rt a int

y wh o o wn s th e mor

tg a g e , Co un t I Iis c le arl y16

direc ted at L itton and not Fre mont.” Pls.’ Opp’n to Fre mont Mot. Dism iss at 37. The Court
c on c lud e s th at it

mus t di smi ss c ount 2 a g a ins t F re mont. c. Count 3 - Common Law Fraud F re mont argue s th at c ount 3 , w hic h is a c la im f or c omm on law f ra ud , is no t pl e d w ith sufficie nt particular ity

under F eder al Rule of Civil P roce dure 9( b). F remont states that the Carrolls do not alleg e a sing le re prese ntation or misrepre sentation made by Fr emont or any Fr emont repr esentative, and do not plead how or whe n any

such misrepre sentation was communicated. T o the extent the loan application incor rec tly stated the Car

rolls’ income, Fr emont asser

ts, that information was not pre pare d by Fr emont, and the Car

rolls review ed and
cer tified the information in the application to Fre mont. The Carrolls re join that Fre mont conspired w ith the other def endants to def

raud the m, or that the other de fenda nts were ag ents of Fr emont, and ther efor e the f raud of the other de fenda

nts may be attributed to F remont. The materia l misreprese ntation, acc ordingto the Carrolls was the false statement of their inc ome, assets and a

bility to car ry the mortg ag e in the application, which misled them into believing that the y c ou ld a ff or d th e loa

n. Th e Court

c on c lud e s th a t th e Carr oll s h ave state d th e ir fr a ud c la im with sufficient pa

rticularity to allow Fr emont to prepa re a response . Her e, the Car

rolls alleg e that Fr emont or its ag ents falsified the ir income a nd assets on the loan a

pplication, there by

inducing the Carr olls to enter into a loan they could not aff

ord. Ther efor e, the Court denie s Fre mont’s mot ion to d ism iss wi th r e sp e c t to the Carr oll s’ fr a ud c ount. d. Count 4 - Permanent I njunction Fr emont argues that count four must be dismis sed ag ainst it because it no longer holds the loan. The Car

rolls respond that count 4 should not be dismissed beca use it is unproven who17

owns the mortg ag e. The Carrolls’ amended c omplaint, however , states that Fr emont assig ned the mortg ag e to L itton and does not contain any fac ts to support an alleg ation that Fr emont holds the loa n. Am . Co mpl . ¶

1. Th e re fo re , th e Court

dis mis se s c ount 4 a g a ins t F re mont.
e . Co un ts 5, 8

, a nd 10- B re ac h o

f F idu c iar yDu ty , Ne gli ge nc e an d G ro ss Negligence Fr emont argues that counts 5, 8 and 10 should be dismiss ed ag ainst it because Fr emont did no t ow e a

le g a l duty

to t he Carr oll s b e y on d th e c on tr a c tua l r e latio ns hip . T he Carr oll s respond that F remont conc edes that it could have a f iduciary relationship wit h the Carr olls, and that there was a

standard of

car e and duty

to meet the standa

rd re quired by

that relationship, wh ic h F re mont f

a ile d to me e t. T he Carr oll s f a il t o s tate any

fa c ts t hat w ou ld s up po rt

a le g a l duty owed to them, instead statingonly the eleme nts of the claims alleg ed in a c onclusory fashion. There fore , the Court dismiss es these c ounts. See O verse as Private Inv . Corp. v. Industria de Pesco, N.A., I

nc. , 920 F. Supp. 207, 210 (D.D .C. 1996) (“The relationship between a debtor a nd
a c re dit or in a loa n tr ans a c tio n is or din ari ly a c on tr a c tua l r e latio ns hip
. . . a nd is n ot f idu c iary in nature .”) ( internal quotation omitted).

f. Counts 6 and 7 - Cons piracy and Aiding and Abetting F re mont argue s th at th e Carr oll s’ c on sp ir a c y and a idi ngand

a be tti ngc la ims do no t st a te valid claims for se vera l rea sons, including that these claims are not rec og nized under District of Columbi a law a s independe nt torts, that the Carrolls do not alleg e that F remont wa s party to any ag ree ment with or provided substantial assistanc e to another , and that a c orporation cannot conspire w ith its ag ents or employ ees. The Carrolls re join that the amended c omplaint lay s out18

in d e ta il the fi na

nc ia l mo tiv atio ns and

be ne fi ts that de fe nd ants de ri ve d, ho w the un lawf ul a c ts
w e r e c ar r i e d o u t , an d h o wd e f e n d an t s p ur s u e d

a c o m m o no b

j e c t i v e – m o n e y. Civil conspirac y

is not recog nized as an indepe ndent tort in the District of Columbia, but “is a mea ns for e stablishing vica

rious liability

for [an] underlying tor

t.” Exe c. Sandwich Shoppe v. Carr Realty Corp. , 7 4 9 A. 2 d 7 2 4 , 7 3 8 (D
. C
. 2 0 0 0 ) ( qu o t i n g Halberstam v. W elch , 705 F.2d 472, 479 (D.C. Cir. 1983). A c orporation cannot, howeve r, conspire with its employ ees or ag ents, bec ause “ a cor

poration and its ag ents constitute a sing le leg al entity that cannot c onspire with itself.” Tab b v . D ist ric t of Colum bia , 4 77 F . Su

pp . 2 d 1 85 , 1 90 (D .D .C. 20 07 ); se e als o Fraidin v. W

eitzman , 611 A.2d 1046, 1078 (Md. App. 1992) . The Car rolls alleg e that Premier Mortg ag e and its employ ees a nd ag ents wer e ag ents of F remont and w ere actingon behalf of F re mont. C omp l. ¶

58 . B e c a us e F re mont c ann ot c on sp ir e wi th i ts a g e nts , th e Carr oll s’ conspirac y

claim must be dismissed. A claim of a iding a

nd abettingis also not an independe nt tort, but a means of e stablishing vicar ious liabili ty

in the District of Columbia. See H alberstam , 705 F.2d at 476. To preva il on an aidingand abe tting cla im, a plaintiff must show three e lements: “(1) the par ty whom the defe ndant aids must perfor m a wrong ful ac t that cause s an injury ; (2) the de fenda nt must be g ener ally awa re of his role as pa

rt of an ove rall illeg al or tortious ac tivity at the time that he provides the a ssistance; [and] (3) the defe ndant must knowingly and substantially

assist the principal violation.” Id . at 477. The Car rolls state that “[d] efe ndants aided a nd abetted the violations of the Consumer,” Compl. ¶ 111, but the Carrolls do not make any fac tual alleg ations reg ardingthe way in which F re mont su

bs tanti a lly

a ssi ste d a

ny oth e r d e fe nd ant i n unla

wf ul c on du c t. B e c a

us e the Carr oll s19

have not a lleg ed that F remont provided substantial a ssistance to anothe r par ty , their aidingand abettingclaim must be dismissed.

g. Count 9 - Negligent Supervision F re mont argue s th at th e Carr oll s’ ne g lig e nt s up e rv isi on c la im mus t be dis mis se d b e c a us e the claim is premised on a statutory violation and beca

use the Car

rolls do not alleg e that F remont employe d any of the oth e r d e fe nd ants . T he Carr oll s r e sp on d th a t th is c ount i s a sse rt e d a g a ins t Fr emont for its failure to supervise its ag ents, the mortg ag e broke r and a ppraiser defe ndants. “To e stablish a cause of ac tion for neg lige nt supervision, a plaintiff must show: that the
e mpl oye r k

ne w o r s ho uld

ha ve kn ow n it s e mpl oy e e be have d in a da ng e ro us or

oth e rw ise incompetent manne r, and that the employ er, a rmed with that ac tual or construc tive knowledg e, failed to a dequate ly

supervise the employ ee.” Phelan v. M ount Rainier , 805 A.2d 930, 937-38 (D.C. 2002) (inter

nal quotation omitted). A claim of ne g lige nt supervision must be based on a duty at common law. Griffin v. Acacia Life Ins. Co. , 9 25 A. 2d 56 4, 57 6 ( D. C. 2 00 7) . T o p re va il on a neg lige nt supervision claim, the plaintiff ne ed not prove that the par ty supervised w as an employ ee or

ag ent of the de fenda

nt. Brown v. Argenbright Sec., I nc. , 782 A.2d 752, 760 n.11 (D.C. 2001). Unde r similar fac tual circ umstances, this Court has allowed a claim of ne g lige nt
su pe rv isi on a g a ins t a le nd e r f or inj ur ie s c a

us e d b y its a lle g e d a g e nts , a

mor tg a g e br ok e r a

nd its employ ees. Se e J

oh ns on v . Lo ng

Be ac h M or tg. Loa n Trus t , 4 51 F . Su pp . 2 d 1 6, 34 -3 5 ( D. D. C. 20 06 ). He re , th e Carr oll s h ave a lle g e d th a t F re mont ne g lig e ntl y su pe rv ise d it s a g e nts . T his alleg ation is sufficient. F urther this cla im is based on a common law duty – fra ud. There fore , the Court conclude s that dismis sal of the ne g lige nt supervision claim is not warra nted.L itton ex plains in its m emora ndum that while it is i dentified in the amended c omplaint 3 as the c urre nt owner of

the mortg ag e, the a ctual owne r is HSBC B ank USA, National Association and L itton is the servic er of the loan. L itton st ates that it files this motion i n its own capa city and on beha lf of the note holde r in its capac ity as loan ser

vicer for that e ntity . L itton Mot. Dismis s at 1 n.1. 20 In c on c lus ion , th e Court

de te rm ine s th a t it

sh ou ld gra

nt F re mont’ s mo tio n to dis mis s w ith
re sp e c t to c ounts 2, 4, 5, 6, 7, 8 a nd 10 , a nd de ny F re mont’ s mo tio n to dis mis s w ithre sp e c t to counts 1, 3 and 9. B. Lit to n’ s M ot ion to Di sm iss orfor Sum m ar y J udgm e nt L itton also moves to enforce the settlement agree ment or in the alter native to dismiss t he Carrolls’ c laims ag ainst it under Fe dera l Rules of Civil Procedur e 12(b) (6) a nd 9(b). L itton

3
argue s th at a s a

tr ans fe re e , th e no te ho lde r c an a sse rt the same de fe ns e s a s F re mont to c la ims br ou g ht b y

the Carr oll s. Th e re fo re , L itt on a do pts and

inc or po ra te s b y re fe re nc e the argume nts in F re mont’ s mo tio n to dis mis s o r f or summa ry jud g me nt a

nd mov e s f or dis mis sa l on

the same g rounds. Fur

ther, L itton argues that the amended c omplaint makes no alleg ation that L itton or the note holder

participated in the orig ination of the loan or c ommitt ed any wrongwhatsoeve r. The Car rolls respond by

incorpora

ting a ll of their ar g uments with respec t to Fre mont. The Carrolls also alleg e that L itton or the note holder a cted with complicity by taking the assig nment with knowledg e of the unlawful mortg ag e tra nsaction at the inc eption of the loan a nd the
mor tg a g e fr a ud by F re mont and

the mor tg a g e br ok e rs . F or the same re a so ns that th e Cou rt de nie d F re mont’ s mo tio n f or summa ry jud g me nt, it also denies L itton’s moti on for summary judgme nt. L itton, however, r aises an a dditional argument for why

this Court shoul d g rant its motion for summary judgme nt based on the a lleg ed
se ttl e me nt a g re e me nt. L itt on argue s th a t th e Court

sh ou ld a pp ly the do c tr ine of

e qu ita ble21

estoppel, under

which “a party with full knowledg e of the fac ts, which ac cepts the be nefits of a transac tion, contrac t, statute, regulation, or order may not subsequently

take a n inconsistent position t o avoid the cor

respondingobligations or effe cts.” Thoubboron v. Ford Motor Co. 809 A. 2 d 1 2 0 4 , 1 2 1 2 (D
. C
. 2 0 0 2 ) ( ci t i n g First Am. Disc. Corp. v. Commodity Futures Trading Comm. , 222 F.3d 1008, 1016 ( D.C. Cir. 2000)). “The doctrine of equitable e stoppel ‘is a mea ns of pr e c lud inga

lit ig ant f ro m a sse rt ingan o the rw ise ava ila ble c la im o r d e fe ns e a g a ins t a pa rt y who has de trimentally

relied on that liti g ant’s conduc t.’” United States v. Philip Morris Inc ., 300 F. S u p p . 2 d 6 1 , 7 0 (D
. D. C
. 2 0 0 4 ) ( ci t i n g ATC Pe tro le um , I

nc . v . S an de rs , 860 F.2d 1104, 1111 (D.C. Cir. 1988)). L itt on argue s th at it

re lie d o n th e Carr oll s’ a sse nt t o th e se ttl e me nt a g re e me nt whe n it did not forec lose on their home. De trimental relianc e, howe ver, is not enoug h. The tra ditional
e le me nts of

e qu ita ble e sto pp e l are (1 ) a

“ de fi nit e ” re pr e se ntatio n to the pa rt y c la imi nge sto pp e l, (2) the pa rty relied upon its adve rsar

y ’s conduc t to its detriment, and ( 3) re liance on the repr esentation was “re asonable .” Graham v. SEC , 2 22 F .3 d 9 94 , 1 00 7 ( D. C. C ir . 2 00 0) . “ I t is not essential to the cr eation of a n equitable e stoppel . . . that the party soug ht to be estopped should have ha d an ac tual intent to deceive , defr aud, or mislead.” Cassidy v. Owen , 533 A.2d 25 3, 25 5 ( D. C. 1 98 7) (i nte rn a l c itatio ns omi tte d) . T he re mus t, h ow e ve r, be a “ de fi nit e misrepre sentation.” Se e He c k le r v . Cm ty . H

e alt h S e rv s. , 467 U.S. 51, 59 (1984). He re , w hil e L itt on

mig ht a rgue that it

wa s a de fi nit e mis re pr e se ntatio n f or the Carr oll s to sign a nd return the front pag e of the contra ct, omitting from their corr espondenc e their intent not to ag ree to the rema inder of the contra ct, this argument does not convince the Court. Whil e the C ar r o l l s ’ a c t i o n s m ay

h av e m i s l e d

Li t t o n , th e i r

o m i s s i o nw a s n o t

a d e f i n i t e m i s r e p r e s e n t a t i o n . In22

fa ct , b y s i gn i n g an d

re turn i n g on ly

the first pag e, the Car

rolls could plausibly

argue that they made no misrepr esentation at all but evidence d their intent to ag ree only to the first pag e. The Court, there fore , turns to L itton’s moti on to dismi ss. Whether the Carr olls may bring their c om mo n la w claims ag ainst L itton depends upon whethe r L itton is a holder in due cour se. See Slaughter v . Jefferson Fe d. Sav. &Loan Ass’n , 538 F.2d 397, 399- 400 (D.C. Cir. 1976). The District of Columbia Code defines a holder in due c ourse a s the holder of an instrument if: (1) “The instrument when issued or ne g otiated to the holder doe s not bear suc h appar ent evidenc e of fo rg e ry or a lte ratio n o r i s n ot o the rw ise so ir re g ula r o r i nc omp le te a s to c a ll i nto qu e sti on its
a uth e nti c ity ;” and

(2 ) “ Th e ho lde r t oo k th e ins tr ume nt ( i) fo r v a lue , ( ii) in g oo d f a ith , a nd
. . . ( vi) without notice that any

party has a de fense [aga inst it ].” D.C. Code § 28:3-302(a). Aperson ha s “notice” of a f

act whe n “(a ) he ha s actua l knowledg e of it; or (b) he has r ece ived a notice or notification of it; or (c) from all the f acts a nd circ umstances known to him at the time in question he has r eason to know that it ex ists.” D. C. Code § 28:1-201(25). Her e, the Car

rolls alleg e that def

endants (inc luding L itton) knew or should have known that the Carr olls could not afford the loan and that ther e wa s no rea sonable proba bility that the Carr oll s c ou ld p ay

it. Am . Co mpl . ¶

¶ 4 5, 75 . In th e ir

op po sit ion

to L itt on ’s mot ion

to d ism iss , pla int if fs fu rt he r e xpla in t

hat be c a us e of the ir pr ior laws uit , L itt on

wa s o n n oti c e of

the Carr oll s’ defe nses. The Court c oncludes that at this st ag e, these fac tual alleg ations are sufficie nt, and d i s m i s s i n g all

o f th e C ar r o l l s ’ c o m m o nl awc l a i m s a g a i n s tL i t t o ni s p r e m a tur e . L i t t o n ’ s l i a b i l i ty, howeve r, is only

derivative of any

liability Fr emont may

have. See B

ynum , 2005 WL818619, at * 6 (“An assig nee me rely steps into the shoes of the a ssignor . Acc ording ly , an assig nee’ s l i ab i l i ty ca nb e n o gre at er

th an th e a s s i gn o r’ s . ”) (c i t i n g SEC v. Bilzerian , 378 F.3d 1100, 100823

(D.C. Cir. 2004)). The ref ore, the Court must di smiss t hose cla ims ag ainst L itton that is has dismiss ed ag ainst Fre mont. The Court does not dismiss counts 2 and 4, howe ver, which ar e for decla ratory and injunctive re lief, and a re a ppropriate ly

broug ht ag ainst L itton, allege dly the
curr ent holder of

the loan. The Car rolls’ statutory claims ag ainst L itton under the DCCPP A ar e g overne d by the pr ov isi on s o f t

he Di str ic t of

Col umb ia ’s c on sume r p ro te c tio n la ws . T he Carr oll s r e c og nize thi s, stating “ Def

endant L itton is named a s a De fenda nt under [the DCCPP A count] to the ex tent of
and su bje c t to D. C. C od e § 2 8- 38 08 .” Am . Co mpl . ¶ 88 . T hat pr ov isi on , h ow e ve r, is inapplicable to this ca se. See J ohnson , 451 F. Supp. 2d at 53 (D .D.C. 2006) (“ Plaintiff’s
asser tion of derivative c laims . . . pursuant to D.C. Code § 28-3808 fa ils because Plaintiff cannot
asser t claims ag ainst an assig nee e x cept ‘ as a matter of de fense or set-of f ag ainst a cla im by

the assig nee.’ ”) ( citing D .C. Code § 28-3808(b)) . Moreove r, assig nee liability under that provision appea rs to be limited to “consumer c redit sale[s],” which are limit ed to transa ctions where the
amou nt f ina nc e d d oe s n ot e xce e d $ 25 ,0 00 . D .C. Cod e §§ 28 -3 80 2 & 28 -3 80 8; see H ancock v. Homeq Se rvicing Corp. , 2007 WL1238746, at *10 (D.D .C. April 27, 2007). Ther efor e, the Court dismi sses the Carr olls’ first count as ag ainst L itton. In s um, the Court

c on c lud e s th a t it

sh ou ld gra

nt L itt on ’s mot ion

to d ism iss wi th r e sp e c t to counts 1, 5, 6, 7, 8, 9 and 10 a nd should deny

L itton’s moti on to dismi ss with respec t to counts 2, 3, and 4. C. Indi vid ualDe fend ant s’ M ot ion s t o D ism iss orforSum m ar y J udgm e nt The individual defe ndants essentially adopt Fr emont’s ar g uments. See, e .g. , Okebug wu Mot. Dismis s at 8 (“T o the extent applicable, a nd not in contradiction to Def endant Oke bug wu’s24

argument, with respec t to Defe ndant Fr emont’s Motion to Dismi ss, Defe ndant Okebugwu incorpora tes by ref ere nce, a s if fully

set forth he rein, De fenda nt Fre mont’s argument that Plaintiffs’ claims wer e re lease d pursuant to the F orbea ranc e Agree ment.”). The individual de fe nd ants do no t ma

ke any ne w a rgume nts . The Court denie s the individual defenda nts’ motions for summary judgme nt beca

use the settlement ag ree ment does not apply to the individual defenda nts. W ith respec t to the individual defe ndants’ motions to dism iss the Court gr ants them with respe ct to counts 2, 4, 5, 6, 7, 8, 9 and 10, and denie s them with respec t to counts 1 and 3 for the rea sons stated in this memorandum opinion. III . C ON CL USI ON Acc ording ly , it is t his 20 day of Jul y 2009, here by th OR DE RE D that de fe nd ant F re mont’ s mo tio n f or summa ry jud g me nt [# 50 ] is DE NI ED ; and it is further OR DE RE D that de fe nd ant F re mont’ s mo tio n to dis mis s [#4 9] is G RA NT ED wi th
re sp e c t to c ounts 2, 4, 5, 6, 7, 8, and 10 of pla int if fs ’ c omp la int

and is DE NI ED wi th r e sp e c t to counts 1, 3, and 9; and it is further OR DE RE D that de fe nd ant L itt on ’s mot ion fo r s umm ary

jud g me nt [# 66 ] is DE NI ED ; and it is further OR DE RE D that defe ndant L itton’s moti on to dismi ss [ #65] i s GRANTED with re spect to counts 1, 5, 6, 7, 8, 9, and 10 of plaintiffs’ complaint and is DENI ED with respe ct to counts 2, 3 and 4; and it is further25

OR DE RE D that defe ndants Okebugwu, Ing ram a nd Smit h’s motions for summary judgme nt [ ##67, 68, 69] are DE NI ED ; and it is further OR DE RE D that defe ndants Okebugwu, Ing ram, a nd Smit h’s motions to di smiss [ ## 67, 68, 69] are G RA NT ED with respec t to counts 2, 4, 5, 6, 7, 8, 9, and 10 of plaintiffs’ c omplaint and DENIED with respec t to counts 1 and 3.
Henr y H. Kenne dy , J r. Un i t edS t at es Di s tri ctJ u d ge