1 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
JOHN COON , Plaintiff,

v. EDWARD WOOD , et al. , Defendant s . Civil Action No. 13

- 1400 (BAH) Judge Beryl A. Howell

MEMORANDUM OPINION The plai ntiff, John Coon, proceeding pro se , brings numerous state law claims arising out of allegedly incorrect advice provided to him by his real estate agent regarding a sale of property in 2010. Pending before this Court is the defendants’ Motion to Dismiss the Complaint, ECF No. 5. For the reasons st ated below , the defendants’ motion is granted in part and denied in part.
I. B ACKGROUND In 2000, the plaintiff purchased a property “for investment purposes” in Washington D.C. (“the D.C. Property”). See Compl. , ECF No. 1, ¶ 9. T he plaintiff was represented in this
trans action by the defendant Edward Wood, who is an “associate broker” at defendant City
Houses D.C

. , which is a licensed an d registered real estate agency, with its principal place of busin ess in the District of Columbia. Id. ¶¶ 3, 5, 9. Brooke Meyer , the th ird and final defendant, owns City Houses D

. C

. and is its “principal broker

. ” Id. ¶ ¶ 1, 4.
I n 2010, the plaintiff decided to sell the D.C. Property and use the proceeds to finance a new investment property consisting of farm land near Charles Town, West Virginia (“the Farm”). Id. ¶ 10. To do so, the plaintiff once again retained Wood and City Houses, to assist him. Id. On June 17, 2010, the plaintiff and City Houses executed a Listing Agreement for2 Improved Real Property (the “Brokerage Agreement”). 1 See Defs

. ’ Mem. Supp. Mot. Dismiss (“Defs.’ Mem.”), Ex. A, ECF No. 5

- 2. The seven - page Brokerage Agreement provides , in part, that the “purpose” of the agreement is to “grant [] to [ the d efendants] the exclusive right to sell, exchange or convey the [ D.C. Property.]” Id. ¶ 3. Additionally, under the Brokerage Agreement, the d efendants earn their fee when the p laintiff “enters into a sales contract . . . with any buyer procured by seller . . . provided the buyer performs and settles on said c ontract.” Id. ¶ 6(a). Shortly after entering the Brokerage Agreement, the plaintiff executed a Regional Sales Contract (the “Sales Agreement”) , o n June 30, 2010, with another person for the sale of the D.C. Property. See Defs’ Mem., Ex. B, ECF No. 5

- 3

. The Sales Agreement provides that City Houses was “retained solely as a real estate agent and not as an attorney, tax advisor, lender, appraiser, surveyor, structural engineer, mold or air quality expert, home inspector or other professional service pro vider.” Id. ¶ 27(d). The Sales Agreement also advises that: “The Broker can counsel on real estate matters, but if legal advice is desired by either party, such party is advised to seek legal counsel. Purchaser and Seller are further advised to seek app ropriate professional advice concerning the condition of the Property or tax and insurance matters.” Id. ¶ 27.

1 Although the p laintiff did not attach, or quote, either the Brokerage Agreement or the Sales Agreement in either his Complaint or briefing during the Motion to Dismiss, see generally Compl., the Court may nonetheless consider the agreements, which were attached to the d efendants’ Motion to Dismiss and whose authenticity was not challenged by the plaintiff. A document outside the complaint may be considered on a motion to dismiss under Rule 12(b)(6), without converting the motion to one for summary judgment, if it is “re ferred to in the complaint” and is “integral to” the plaintiff's claim. Kaempe v. Myers , 367 F.3d 958, 965 (D.C. Cir. 2004); see also Abhe & Svoboda, Inc. v. Chao , 508 F.3d 1052, 1059 (D.C. Cir. 2007) ; Stewart v. Nat'l Educ. Ass'n , 471 F.3d 169, 173 (D.C. Cir. 2006) ; Saunders v. Mills , 842 F. Supp. 2d 284, 293 n.2 (D.D.C. 2012) ; Pearson v. Dist

. of Columbia , 644 F. Supp. 2d 23, 29 n.1 (D.D.C. 2009)

. The Court may properly consider the documents at issue on this motion to d ismiss because the plaintiff's C omplaint plainly references the agreements, see Compl. ¶¶ 16

– 20, and alleges that the defendants breached their obligations under the agreements.3 During the course of Wood and City House’s representation, the p laintiff asked Wood whether “the sale of the [D.C.] Property could be accomplished in a way to avoid any capital gains on the [D.C.] Property.” Compl. ¶ 11. Under 26 U.S.C. § 1031, “no gain or loss shall be recognized on the exchange of property held for . . . investment if such property is exchanged sol ely for property of like kind . . . .” T his transaction is known as a “Starker Exchange.” In
response to the p laintiff’s inquiry , Wood advised that the purchase of the D.C. Property in 2000 as a Starker Exchange

— a transaction on which Wood had served as the plaintiff’s real estate agent

— meant the sale of the D.C. Property in 2010 could not be structured so as to avoid payment of capital gains . Compl. ¶ 11. As a result of Wood’s representation , the p laintiff proceeded with the sale of the D.C. Property “ without implementing the appropriate transaction to qualify” as a Starker Exchange under 26 U.S.C. § 1031

. Compl. ¶ 13

. The p laintiff alleges

— and the defendant s have not disputed

— that this advice was incorrect. Compare Compl. ¶ 12 with Defs.’ Mem.
On September 14, 2010, the p laintiff completed the sale of the D.C. Property and received a check for $545,000. Compl. ¶ 13. The p laintiff used the funds to purchase and make improvements to the Farm. Id. In 2011, the plaintiff “went to his accountant at H&R Block to file his taxes for 2010” and owed in excess of $75,000 in capital gains taxes as a result of the sale
of the D.C. Property, which taxes remain outstanding. Id. ¶¶ 14, 15. On September 13, 2013, the p laintiff, now residing in West Virginia , brought this diversity action against defendants Wood, Meyer, and City Houses alleging breach of contract, negligent misrepresentation, breach of fiduciary duty, and violations of D.C. Code §42

- 1701, et
seq. , relat ing to the sale of the D.C. Property. T he p laintiff seeks to recover damages and4 attorneys ’ fees. The d efendant s ha ve moved to dismiss all counts for failure to state a claim

. See generally Def s .’ Mem.
II. L EGAL S TANDARD Federal Rule of Civil Procedure 8(a)(2) requires that a complaint contain “a short and plain statement of the claim showing that the pleader is entitled to relief,” to encourage brevity and, at the same time, “give the defendant fair notice of what the

. . . claim is and the grounds upon which it rests.” Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 555 (2007) (ellipses in original; internal quotations and citations omitted); Tellabs, Inc. v. Makor Issues & Rights, Ltd. , 551 U.S. 308, 319 (2007). To survi ve a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the “complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Wood v. Moss , 134 S. Ct. 2056, 2067 (2014) (quoting Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) ). A claim is facially plausible when the plaintiff pleads factual content that is more than “‘ merely consistent with’ a defendant's liability,” but

“ allows the court to draw the reasonable inference that the def endant is li able for the misconduct alleged. ” Iqbal , 556 U.S. at 678 ( citing Twombly , 550 U.S. at 556); see also Rudder v. Williams , 666 F.3d 790, 794 (D.C. Cir. 2012). Although “detailed factual allegations” are not required to withstand a Rule 12(b)(6) motion, a complaint must offer “more than labels and conclusions” or “formulaic recitation of the elements of a cause of action” to provide “grounds” of “entitle[ment] to relief,” Twombly , 550 U.S. at 555 (a lteration in original), and “ nudge[ ] [the] c laims across the line from conceivable to plausible,” id. at 570. Thus, “ a complaint [does not] suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’” Iqbal , 556 U.S. at 678 (quoting Twombly , 550 U.S. at 557). In considerin g a motion to dismiss for failure to plead a claim on which relief can be granted, the court must consider the complaint in its entirety, accepting all5 factual allegations in the complaint as true, even if doubtful in fact. Twombly at 555; Sissel v.
U

.S. Dep ’ t of Health & Human Servs. , No. 13

- 5202, 2014 U.S. App. LEXIS 14397 (D.C. Cir. 2014) (in considering Rule 12(b)(6) motion, the “court assumes the truth of all well

- pleaded factual allegations in the complaint and construes reasonable inferences from those allegations in the plain tiff's favor, but is not required to accept the plaintiff's legal conclusions as correct” (internal citations omitted) ) . In addition, courts may “ordinarily examine” other sources “when ruling on Rule 12(b)(6) motions to dismiss, in particu lar, documents incorporated the complaint by reference, and matters of which a court may take judicial notice.” Tellabs , 551 U.S. at 322 ; see also En glish v. Dist

. of Columbia , 717 F.3d 968, 971 (D.C. Cir. 2013).
Pro se plaintiffs are “[held] to less stringent standards than formal pleadings drafted by lawyers.” Haines v. Kerner, 404 U.S. 519, 520 (1972); see also T ate v. Dist

. of Columbia , 627 F.3d 904, 912 (D.C. Cir. 2010)

. Nevertheless, “even a pro se complainant must plead ‘factual matter’ that permits the court to infer ‘more than the mere possibility of misconduct.’” Atherton

v. Dist. of Columbia Office of Mayor, 5 67 F.3d 672, 681

– 82 (D.C. Cir. 2009) (quoting Iqbal, 556 U.S. at 679). In this Circuit, dismissals with prejudice under Rul e 12(b)(6) are disfavored and the

“‘ standard for dismissing a com plaint with prejudice is high. ’ ” Rudder v. Williams , 666 F.3d 790, 794 (D.C. Cir. 2012) (quoting Belizan v. Hershon, 434 F.3d 579, 583 (D.C. Cir. 2006) ) ; see also Rollins v. Wackenhut Services, Inc. , 703 F.3d 122, 132 (D.C. Cir. 2012) (Kavanaugh, J., concurring) (noting that this Circuit ’ s “ decisions have imposed a ‘ high ’ bar for Rule 12(b)(6) dismissals with prejudice, ” and that such “ case law on Rule 12(b)(6) dismissals is not fully aligne d with the Rules ” since “ [o]n the contrary, Rule 41(b) contemplates that a Rule 12(b)(6) dismissal ordinarily operates as a dismissal with prejudice , unless the district court in its6 discretion states otherwise. ” )

. D ismissal with prejudice may be appropriate, however, “when a trial court determines that the allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency.” Firestone v. Firestone, 76 F.3d 1205, 1209 (D.C. Cir. 1996) (internal quotation marks and citations omitted)

. III. D ISCUSSION The d efendants have moved, under Federal Rule of Civil Procedure 12(b)(6), to dismiss all four of t he p laintiff ’s state law claims for breach of contract, negligent misrepresentation, breach of fiduciary duty, and violations of D.C. Code § 42

- 1701, et seq
. 2 Federal jurisdiction in this case is based on diversity of citizenship, 28 U.S.C. § 1332, and , accordingly, state law provides the substantive rules of law with re gard to all claims in this case. S ee Erie R.R. Co. v. Tompkins, 304 U.S. 6 4, 78 (1938). 3 Therefore, the Court will apply District of Columbia law to this case. See Burke v. Air Serv Int'l, Inc. , 685 F.3d 1102, 1107 (D.C. Cir. 2012) (“ The ‘broad command of Erie,’ of course, is that ‘federal courts are to apply state substantive law and federal procedural law’ when sitting pursuant to their diversity jurisdiction. ” ( quoting Hanna v. Plumer , 380 U.S. 460, 465 (1965)) ) ; see also Arias v. DynCorp , 752 F.3d 1011, 1013 (D.C. Cir. 2014); Cordoba Initiative Corp. v. Deak , 900 F. Supp. 2 d 42, 46 n.3 (D.D.C. 2012) ( applying District of Columbia law in diversity suit where “ [b] oth parties applied District of Columbia law in their motion papers without engaging in any choice of law analysis ”); P iedmont Resolution, L.L.C. v. Johnston, Rivlin & Foley, 999 F. Supp. 34, 39 (D.D.C. 1998) ( same). The Court addresses the sufficiency of each of the plaintiff’s claims seriatim below.

2 The defendants also challenge the plaintiff’s claims for attorneys’ fees as n either the contract nor D. C. § 4 2

- 1701 , et seq. , permit the p laintiff to recover attorneys’ fees

. See Defs.’ Mem. at 8 (citing Summit Valley Indus. v. United Bhd

. of Car pe nt ers & Joiners , 456 U.S. 717 (1982) )

. Moreover, t he plaintiff is proceeding pro se and is not entitled to reimbursement for any fees that would have been paid to retained counsel. Therefore, the plaintiff’s demand for attorneys’ fees is s tricken

. 3 The parties have not raised any choice of law issues, and both parties in their motion papers have relied solely upon District of Columbia law.7 A. First Cause of Action for Breach of Contract Under District of Columbia law, to state a claim for breach of contract, “a party must establish (1) a valid contract between the parties; (2) an obligation or duty arising out of the contract; (3) a breach of that duty; and (4) damages caused by the breac h.” Logan v. LaSalle Bank Nat'l Ass'n, 80 A.3d 1014, 1023 (D.C. 2013) (quoting Tsintolas Realty Co. v. Mendez, 984 A.2d 181, 187 (D.C. 2009)); Osseiran v. Int'l Fin. Corp., 950 F. Supp. 2d 201, 208 (D.D.C. 2013) (same). The p laintiff alleges , in his First Cause of Action , that the d efendants “breached the [Brokerage Agreement] by failing to structure the sale of the [D.C.] Property” in such a way as to avoid capital gains tax. Compl. ¶¶ 17, 18

. The p laintiff cites to no provision of the contract tha t the d efendants allegedly violated. The d efendants counter that they “did not have any contractual obligation to ‘structure’ [the D.C. Property’s] sale in any particular way.” Defs. ’
Mem. a t 4. In support of their argument, the d efendants cite to a pro vision of the Brokerage Agreement, which they claim set s forth the duties and obligations of the d efendants. Id. The provision provides that the “purpose” of the agreement is to “grant to [ the d efendants] the exclusive right to sell, exchange or convey the [ D.C. Property ] .” Brokerage Agreement ¶ 3. The d efendants also note that under the Brokerage Agreement, the d efendants earn their broker’s fee when the p laintiff “enters into a sales contract . . . with any buyer procured by seller . . . provided the buyer performs and settles on said contract.” Id. ¶ 6(a). The d efendants are correct that no provision of the Brokerage Agreement creates an obligation on behalf of the d efendants to either furnish tax advice or to “structure the sale of the [D.C.] Prop erty” so as to avoid capital gains taxes. See generally id

. Nor has the p laintiff in either his Complaint, or his briefing, pointed to any provision of the Brokerage Agreement8 creating such an obligation. Accordingly, because there is no “obligation or duty arising out of the contract” to structure the [D.C.] Property sale in such a way as t o avoid capital gains tax, the d efendants could not have breached such a provision. See Logan , 80 A.3d at 1023. The
p laintiff’s breach of contract claim is therefor e dismissed. Additionally, because the contract contains no language or provision creating such an obligation, and because the Court can envision no additional facts by which an amended pleading could cure such a deficiency, the p laintiff’s claim for bre ach of contract is dismissed with prejudice. See Firestone , 76 F.3d at 1209

. B. Second Cause of Action for Negligent Misrepresentation The p laintiff next brings a claim for negligent misrepresentation against the d efendants. Under District of Columbia law , a claim for negligent misrepresentation requires that: (1) the defendant make “a false statement or omit[] a fact that he had a duty to disclose;” (2) the false statement or omission “involve[] a material issue;” and (3) the plaintiff “reasonably rel[y] upon the false statement or omission to his detriment.” Redmond v. State Farm Ins. Co. , 728 A.2d 1202, 1207 (D.C. 1999); see also Parr v. Ebrahimian , 774 F. Supp. 2d 234, 240 (D.D.C. 2011). “While reasonable reliance can be a jury issue, dismissal for fa ilure to state a claim is proper when no reasonable person would have relied on the representation.” Davis v. World Sav. Bank,
FSB , 806 F. Supp. 2d 159, 173 (D.D.C. 2011); see also Alicke v. MCI Commc’ns Corp. , 111 F.3d 909, 912 (D.C. Cir. 1997) (discussing requirement that “the plaintiff acted in reliance upon the alleged misrepresentation”).
T he d efendant s do not challenge

— and thereby concede

— that the p laintiff has alleged sufficient facts to satisfy the first two requirements for negligent m isrepresentation , namely, the making of a false statement involving a material issue . The d efendant s do challenge , however,9 whether the reliance by the p laintiff on statements regarding the “tax status” of the D.C. Property

was reasonable. See Defs. ’ Mem

. a t 6. In support of their argument , the d efendant s cite three

cases from this Court for the proposition that where an alleged representation contradicts the clear terms of a written contract, reliance upon the representation is unreasonable as a matter of law

. See id . (citing Davis , 806 F. Supp.2d at 173; In re United States Office Prods. Co. Sec. Litig ., 251 F. Supp.2d 58, 74

– 75 (D.D.C. 2003); Smith v. Washington Metro Area Transit Auth ., No. 95

- 0687 , 1997 WL 182286 (D.D.C. Apr. 4, 1997) ). For example, in Davis , the plaintiff claimed fraud and negligent misrepresentation on the part of a mortgage lender because “ although the Note stated on its face that it is fixed

- rate, it is really an adjustable rate note.” 806 F. Supp. 2d at 174. The cou rt painstakingly reviewed the
Note at issue and determined that “[o] n its face it expressly and clearly provided that the while the interest rate is fixed, the minimum payment might” fluctuate depending on various factors

. Id . Consequently, the plaintiff failed to allege reasonable reliance to state a claim “[b]ecause the claims for fraud and negligent misrepresentation are flatly contradicted by the express terms of the Note.” Id. Similarly , in Smith , the court found that the p laintiff could not demonstrate reasonable reliance on his supervisor’s oral promise that a temporary promotion would be permanent when that oral representation was “ contradicted by the express written provisions of the WMATA Manual ,” which “ establishe [d] in unambiguous term s the necessary requirements for a promotion or any other change in employment status. ” 1997 WL 182286 at *5

. Thus, the plaintiff, who was a long

- tenured employee familiar with the employer’s practices, “ could not reasonably believe that his promotion co uld be effected without a Personnel Action Report authorizing it ” or that his supervisor “ acting alone, had actual authority to effect, without any documentation, a10 permanent promotion. ” Id. By contrast to both Davis and Smith , the alleged misrepresentat ion at issue i n the present

case do es not “flatly contradict ” the express terms of the agreement . According to the Complaint, d efendant Wood made a misrepresentation with the state ment that “the purchase of the [D.C.] Property as a ‘Starker Exchange’ in 2000 barred another exchange in 2010.” Compl. ¶ 22; see also id

. ¶ 11. Neither the Brokerage Agreement nor the Sales Agreement contains any provision to the contrary. Indeed, neither discusses the tax status of the D. C. P roperty in 2000 or make s any representations regarding its status in 2010. T he Sales Agreement provides only that Defendant Wood was “retained solely as a real estate agent and not as an attorney, tax advisor, . . . or other professional service provi der.” Sales Agreement ¶ 27(d). The Sa les Agreement also advises the p laintiff “to seek appropriate professional advice concerning the condition of the Property or tax and insurance matters.” Id. ¶ 27. The issue here, therefore, is not whether the p la intiff reasonabl y rel ied on a representation flatly contradicting the express terms of a writing, as discussed in both Davis and Smith . S ee Davis , 806 F. Supp. 2d at 174 (“Because the claims for fraud and negligent misrepresentation are flatly contradicted by the express terms of the Note, they fail to state a claim.”); Smith , 1997 WL
182286 , at *5 (“[N] o reasonable trier of fact could conclude that plaintiff was entitled to rely upon oral representations of his superior that were contradicted b y the express written provisions of the WMATA Manual .” ). R ather, the issue is whether the p laintiff’s reliance on d efendant Wood ’s representation regarding a tax matter involving a real estate transaction was reasonable in light of the admonitions contain ed in the contract. 4 This is a closer call

.

4 Under both federal and District of Columbia law , t he p laintiff has an obligation to read the contract. See Shelton v. The Ritz Carlton Hotel Co. , 550 F. Supp. 2d 74, 80 (D.D.C. 2008) (“[U]nder both D.C. and federal law one who signs a contract has a duty to read it and is obligated according to its terms.” (citing Paterson v. Reeves, 304 F.2d 950, 951 (D.C. Cir. 1962); Pers Travel, Inc. v. Canal Sq uare Assoc., 804 A.2d 1108, 1110 (D.C. 2002))).11 O n this point, In re United States Office Prods. Co. Sec. Litig ., 251 F. Supp. 2d 58, 74

– 75 (D.D.C. 2003) , which is relied upon by the defendants, proves instructive but not helpful to the defendants . In Unit ed States Office Products , the c ourt addressed whether a plaintiff ’ s reliance on an alleged oral contract modification was reasonable in light of a written contract’s express requirement that all modifications be made in writing. Id . at 75. The c ourt concluded that such reliance was unreasonable, absent additional facts explaining why the plaintiff reasonably believed the written contract terms did not apply to the oral representations. Id. In the c ourt’s estimation, “the plaintiff ’ s reliance on the alleged misrepresentations regarding the compensation by the defendants resembles blind reliance . . . .” Id. at 75. Absent a fiduciary duty, “one cannot close his eyes and blindly rely upon the assurances of another . . . .” Id. at 74

– 75 (quoting
Hercu les & Co. v. Shama Rest. Corp. , 613 A.2d 916, 934 (D.C. 1992)). The instant case is distinguishable from United States Office Products

. First , distinct from United States Office Products , and the other cases relied upon by the d efendants , the instant

case does concern a fiduciary duty. See Vicki Bagley Realty, Inc. v. Laufer 482 A.2d 359, 364 (D.C. 1984) (“A real estate broker, like any other agent, owes a fiduciary duty to his principal. ”). Second , and unlike in United States Office Products , the plaintiff here allege s additional facts to justify his reliance upon the representation of his real estate agent , defendant Wood. According to the Complaint, defendant Wood was the p laintiff’s real estate agent during the original 2000 purchase of the D.C

. Property, which was structured as a Starker Exchange. Compl. ¶¶ 9, 13. Drawing all inferences favorable to the p laintiff, the 2000 purchase of the D.C. Property suggests that Defendant Wood was, at a minimum, familiar with Starker Exchanges and that th e plaintiff was aware of this fact

.12 Accordingly, the p laintiff alleges additional facts

— beyond merely the alleged misrepresentation

— to explain his reliance on the d efendant s ’ representation concerning the tax status of the D.C. Property. The defendants owed the plaintiff a fiduciary duty and the defendants had prior experience in precisely the type of transactions inquired of by the plaintiff

. In light of these additional facts, the p laintiff’s reliance was not unreasonable as a matter of law such as to warrant dismissal on a Rule 12(b)(6) motion. 5 Where a real estate agent

— experienced
in a specific type of transaction

— makes an affirmative representation to the principal regarding that same type of transaction, the principal is not unreasonable as a matter of law to rely upon the representation. Therefore, the Court denies the d efendan ts’ M otions to D ismiss the Complaint with respect to Count II. C. Third Cause of Action for Breach of Fiduciary Duty
In his Third Cause of Action, the p laintiff alleges that the d efendants failed in their fiduciary duty to the p laintiff by “failing to either notify Plaintiff of the tax exemption or taking the necessary steps to create a like

- kind exchange to qualify for the [28 U.S.C. § 1031] tax

e xe mption . . . .” Compl. ¶ 30. 6 To state a claim for breach of fiduciary duty under District of Columbia law, a plaintiff must allege that “ ‘(1) defendant owed plaintiff a fiduciary duty; (2) defendant breached that duty; and (3) to the extent plaintiff seeks compensatory damages

— the bre ach proximately caused an

5 T his conclusion is limited to the facts alleged in the pleading that must, at the motion to dismiss stage, be assumed to be true, along with all reasonable inferences drawn in the plaintiff’s favor. As the case proceeds, the apparent sophistication of the p laintiff in this matter, the relative simplicity of the contracts at issue , and any caveats to the representation made by the defendants may very well make the plaintiff’s reliance unreasonable. 6 Th e p laintiff has not alleged that the defendants breached a fiduciary duty by affirmatively providing incorrect guidance regarding the tax implications of the sale. See Compl. ¶ 30 (“Defendants breached their fiduciary duty by failing to either notify Plai ntiff of the tax

- emption or taking the necessary steps to create a like

- kind exchange to qualify for the 1031 tax exemption itself.”). Therefore, the Court need not address whether such allegations could state a claim for breach of fiduciary duty on the i nstant motion.13 injury.’ ” Henok v. Chase Home Fin., LLC , 915 F. Supp. 2d 109, 115 (D.D.C. 2013) (quoting Bode & Grenier, LLP v. Knight, 821 F. Supp. 2d 57, 64 (D.D.C. 2011)). “A real estate broker, like any other agent, owes a fiduciary duty to his principal. ” Laufer , 482 A.2d at 364 (citations omitted)

. “The fiduciary duty owed by a real estate agent . . . requires the exercise of the highest fidelity toward the principal. It encompasses an obligation to inform the principal of every developm ent affecting his interest . . . .” Id. at 364

– 65; Jenkins v. Strauss , 931 A.2d 1026, 1032

- 33 (D.C. 2007). D.C. statutory law pr e scribes the scope of the duties owed by real estate brokers

. See D.C. Code § 42

- 1703 ( titled “Duties of real estate brokers, salespersons, and property managers , ” and stating “The common law of agency relative to brokerage relationships in real estate transactions to the extent inconsistent with this section shall be expressly abrogated.”). A rea l estate broker is required to “exercise ordinary care,” § 42

- 1703 (a)(1)(D), and to “disclos[e] to the seller material facts related to the property or concerning the transaction of which the licensee has actual knowledge .” § 42

- 1703 (a)(1)(B)(iii). A “ma terial fact” is “information that, if known, would be likely to induce a reasonable person to enter into or not enter into or consummate a real estate transaction.” § 43

- 1702(7B). A broker is deemed “to possess actual knowledge and information only.” § 42

- 1703 (l)(3). Additionally, a real estate broker is required to “perform in accordance with the terms of the brokerage relationship,” see § 42

- 1703 (a)(1)(A), which is defined as “the contractual relationship between a client and a real estate [broker] . . . .” § 42

- 1702(2A). Therefore, the fiduciary duties owed by the real estate agent are set by statute and modified by the contractual agreement of the parties. 7

7 See also Rest atement (Second) of Agency § 376 (“The existence and extent of the duties of the agent to the principal are determined by the terms of the agreement between the parties . . . .”).14 As discussed above, no contractual provision of the Brokerage Agreement creates an obligat ion or duty to examine the tax liabilities of the potential sale or to structure the sale to avoid tax liability. Thus, the question before the C ourt is whether an obligation to examine and notify the seller of the tax consequences of a potential sale , an d to structure the sale accordingly, arises out § 42

- 17 01 et seq. and, if so, whether the Brokerage Agreement or Sales Agreement limit that duty. While no provision of the D.C. Code expressly provides such a duty, § 42

- 1703 (a)(1)(B)(iii) requires the real estate broker to “disclos[e] to the seller material facts

. . . concerning the transaction of which the licensee has actual knowledge .” Yet, even a broad interpretation of this provision cannot save the p laintiff’s C omplaint. First , the statute requ ires merely that the broker furnish information concerning the transaction to the seller, not “tak[e] the necessary steps to create a like

- kind exchange . . . .” Compl. ¶ 30. It is simply an information sharing obligation

. Second , with respect to the de fendants’ oth er alleged duty

— the duty to notify the p laintiff of potential tax exemptions

— the p laintiff’s own C omplaint rebuts th e allegation that the defendant s did not “notify Plaintiff of the tax exemption.” Indeed, as alle ged in the Complaint, both th e p laintiff and defendant Wood engaged in a conversation regarding 26 U.S.C. § 1031. See Compl. ¶ 11 (discussing conversation regarding whether the D.C. P roperty was eligible for a “Starker Exchange”). The defendant was therefore plainly aware of the pot ential tax exemption. Finally, the express disclaimer provided in paragraph twenty seven of the Sales Agreement

— “Seller acknowledge[s] that the Broker is being retained solely as a real estate agent and not as an attorney [or] tax advisor . . . .”

— is sufficient to limit any potential statutory duty. At least one court, on facts similar to the current case, determined that the presence of a15 co ntractual provision disclaiming the duty to provide tax advice preempts any argument that the real estate agent owed such an affirmative duty. See Carleton v. Tortosa , 14 Cal. App. 4th 745,
754

- 58 ( Cal. Dist. Ct. App. 1993) (“[T]he contractual language in effect specifies that a real estate broker has no duty to provide legal or tax advice.”) (emphasis in original) . Indeed,

“ plaintiff's allegatio n that defendant had a duty to ‘issue

- spot’ or warn him regarding tax consequences of the transaction s is at od ds with the documents’ admonition that plaintiff should get his tax advice elsewhere. ” Id. at 756. I n light of the express contractual provisions limiting any potential duty in the instant case , see Sales Agreement ¶ 27, the Court declines to hold that a real estate agent has an affirmative duty to notify sellers of potential tax exemptions. Accordingly, the Court determines that p laintiff has failed to state a valid claim for breach of a fiduciary duty , which claim is d ismissed with prejudice

. See Firestone , 76 F.3d at 1209

. D. Fourth Cause of Action for Violations of D.C. Statutory Law Finally , the p laintiff seeks relief for violations of D.C. Code §§ 42

- 1701, et seq
. See Compl. ¶¶ 32

– 35. The defendant s argue that the p laintiff fails to identify any obligation or duty arising out of the D.C. Code that would obligate a real estate broker to “disclose . . . that the sale of the Property could and should be structured as a qualifying Section 1031 exchange.” Defs.’ Mem. at 7 (citing Compl. ¶ 33). The Court has already addressed the duties and obligations arising out of D.C. Code §§ 42

- 1701 when discussing the p laintiff’s breach of fiduciary duty claim. For the same reasons discussed above, the p laintiff’s claim is dismissed. Moreover, because the Court can envision no additional facts by which an amended pleadin g could cure such a deficiency , the dismissal of this claim is with prejudice

. See Firestone , 76 F.3d at 1209

.16 IV. C ONCLUSION For the reasons explained above, the d efendants ’ Motion to D ismiss the Complaint is granted in part and denied in part. Specifically, the defendant s ’ M otion to D ismiss the Complaint is granted with respect to the plaintiff’s claims for breach of contract , breach of fiduciary duty , and violations of D.C. Code §§ 42

- 1701 and those claims are dismissed with prejudice

. Finally, the Court denies the defendants’ M otion to D ismiss the Complaint with respect to the plaintiff’s claim for negligent misrepresentation. An order consistent with this Memorandum Opinion will be contemporaneously entered.

Date: September 18 , 201 4

__________________________ BERYL A. HOWELL United States District Judge