Court Opinion

ID: 2659626
Source: CourtListenerOpinion
Date Created: 2014-04-03 02:55:21.141233+00
Date Added: 2024-06-11T09:26:26.572560
License: Public Domain

UNITED STATES DISTRICT C()URT
FOR THE DISTRICT OF COLUMBIA

JEROME BAILEY, )
)
Plaintiff, )
)
v. ) Case No. 13-cv-917 (RJL)
)
CITIMoRTGAGE, INC., ) F I L E D
)
Defendant. ) `]AN 1 3 2014
C|erk, U.S. Distr|ct & Bankruptcy
MEM()RANDUM ()PIN]()N Courts for the District of Co|umbia

(January  2014) [Dkt. #4]

Plaintiff Jerome Bailey ("plaintiff" or "Bailey") brings this case against
CitiMortgage, Inc. ("defendant" or "CMI"), seeking specific performance of a real estate
contract. See generally Compl. (attached as Ex. 3 to Notice of Removal) [Dkt. #l-3].
Originally filed in DC Superior Court, defendant removed the case to federal court, see
Notice of Removal [Dkt. #1], and then moved under Federal Rule of Civil Procedure
l2(b)(6) to dismiss for failure to state a claim upon which relief can be granted, see
CMI’s Mot. to Dismiss [Dkt. #4]; Statement of P. & A. in Supp. of CitiMortgage, Inc.’s
Mot. to Dismiss ("Def.’s P. & A.") [Dkt. #4-1]. Upon consideration of the parties’
pleadings, relevant law, and the entire record therein, the motion is GRANTED.

BACKGROUND

The parties entered a contract on December 2, 2011,1 whereby plaintiff agreed to

1 ln his cornplaint, plaintiff misstates the contract date as "August 6, 2012." Compl. 11 4.
Fortunately, I can consider the contract itself-without converting this motion to dismiss into a
motion for summary judgment-because it is "incorporated in the complaint," E.E.O.C. v. St.

purchase property located at 2921 Nelson Place, SE, Washington, DC, for $165,000, with
a settlement date of January 5, 2012. See Regional Sales Contract ("Contract") (attached
as Ex. l to Notice of Removal) 111 l, 6 [Dkt. #l-l]. Plaintiff delivered a $5,000 deposit,
which was to be credited toward the purchase price. See id. 1] 4. The contract required
that "[f]ee simple title to the Property, and everything that conveys with it, will be sold
free of liens except for any loans assumed by Purchaser. Title is to be good and
marketable . . . ." Ia'. 11 19. If a title report and survey could not be obtained within ten
days after the settlement date, CMI had the option of terminating the agreement and
retuming Bailey’s deposit, See id. ("The title report and survey, if required, will be
ordered promptly and, if not available on the Settlement Date, then Settlement may be
delayed for up to 10 business days to obtain the title report and survey after which this
Contract, at the option of Seller, may be terminated and the Deposit will be refunded in
full to Parchaser according to the terms of the DEPOSIT paragraph." (emphasis added)).
On January 6, 20l2, the parties entered an addendum to the contract, under which

the closing date was extended to March 27, 2012, with a provision that "if either party
fails to close by the Closing Date, the non-defaulting party shall be entitled to exercise the
remedies provided for in this Addendum," including Bailey’s right to extend the closing

date by paying "an extension fee payable in good funds in the sum of $100.00 for each

Francis Xavier Parochial Sch. , 117 F.3d 62l , 624 (D.C. Cir. 1997), and is a "document[] upon
which the plaintiffs complaint necessarily relies," Hint0n v. Corrections Corp. of Am., 624 F.
Supp. 2d 45, 46 (D.D.C. 2009) (internal quotation marks omitted).

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day of the requested extension." Counter Offer/Addendum ("Addendum") (attached as
Ex. 1 to Notice of Removal at pp. 24-33) 11 1. In the event of a breach or default by CMI,
Bailey was "entitled to a return of any earnest money as [his] sole and exclusive remedy
and to a cancellation of the Contract." Id. 11 13; see also id. 11 16 ("LIMITATION OF
DAMAGES. Buyer agrees that its sole and exclusive remedy in the event of any Seller
default is to terminate this Contract and to receive the return of any earnest money."
(emphases added)). If CMI defaulted after Bailey paid to extend the closing date, Bailey
also would be entitled to the return of his $100 per day fee. See id. 11 1.

March 27, 2012 came and went, and the closing did not take place because,
according to Bailey, "[a] defect existed in Seller’s title to the Property." Compl. 11 6.
Plaintiff contends that the defect "has now been remedied; however, Defendant refuses to
perform under the Contract." Id. Conversely, plaintiff was "[a]t all times . . . ready,
willing, and able to perform under the Contract," id. 11 7, and he asks the Court to order
specific perforrnance, see ia’. 11 12. CMI moves to dismiss for failure to state a claim. See
Mot. to Dismiss at 1.

LEGAL STANDARD

To survive a Rule 12(b)(6) motion to dismiss, a complaint "must contain sufficient
factual matter, accepted as true, to state a claim to relief that is plausible on its face."
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks omitted). "A claim

has facial plausibility when the plaintiff pleads factual content that allows the court to

draw the reasonable inference that the defendant is liable for the misconduct alleged." Id.
"[W]here the well-pleaded facts do not permit the court to infer more than the mere
possibility of misconduct, the complaint has alleged~but it has not ‘show[n]’-‘that the
pleader is entitled to relief."’ Id. at 679 (quoting Fed. R. Civ. P. 8(a)(2)). The Court must
"treat the complaint’s factual allegations as true" and "grant plaintiff the benefit of all
inferences that can be derived from the facts alleged." Sparrow v. United A ir Lines, Inc.,
216 F.3d l111, 1113 (D.C. Cir. 2()00) (internal quotation marks omitted). But "the court
need not accept inferences drawn by plaintiff[] if such inferences are unsupported by the
facts set out in the complaint. Nor must the court accept legal conclusions cast in the
form of factual allegations." Kowal v. MCI Commc’ns Corp., 16 F.3d 1271, 1276 (D.C.
Cir. 1994).
ANALYSIS

CMI acknowledges that it did not sell Bailey the property located at 2921 Nelson
Place, SE, Washington, DC on or by March 27, 2012, see Def.’s P. & A. at 6-8 (arguing
CMI was not obligated to sell), and as a result, it is willing to return Bailey’s $5,000
deposit, see id. at 8 n.4. Regardless of whose fault it was that the title was defective or
that the sale did not occur, return of that deposit is plaintiff s only remedy under the clear
terms of the contract and addendum. See Contract11 19; Addendum 1111 13, 16.2

F or the first time in his opposition brief, plaintiff contends that the addendum is

2 Bailey’s complaint does not ask for a $5,()00 judgment, nor has Bailey moved for judgment.

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unenforceable because it was "an adhesion contract forced upon Mr. Bailey by the
Lender," and because the parties’ "bargaining power was so unequal that Mr. Bailey was
deprived of a meaningful choice of contract terms if he wanted to purchase the Property."
Pl.’s Opp’n to Mot. to Dismiss ("Pl.’s Opp’n") at 5 [Dkt. #8]. Of course, this is entirely
inconsistent with plaintiffs own complaint, which embraces the addendum’s March 27,
2012 settlement date, see Compl.11 5, not the January 5, 2012 date in the original contract,
see Contract11 6. Now confronted with the explicit provisions in the addendum that limit
his damages to the return of his deposit, plaintiff claims that those paragraphs "may be
deemed to be void and stricken from the contract at issue" because they are "incredibly
one-sided and borne of [the parties’] unequal bargaining power." Pl.’s Opp’n at 1, 5.
Plaintiff offers absolutely no factual support for this position, however, relying instead on
the few vague conclusory statements that 1 have quoted above.

Even if plaintiff offered more fulsome support for his position, 1 would still find
that the addendum is not an unenforceable adhesion contract as a matter of D.C. law.3
"[A]dhesion contracts are enforceable unless unconscionable," and "[t]o establish
unconscionability, [a] plaintiff[] must prove both that [he] lacked a meaningful choice
and that the terms of the contract were unreasonably favorable to the other party." Olle v.
5401 W. Ave. Residential, LLC, 569 F. Supp. 2d 141, 146 (D.D.C. 2008) (emphasis

added); Urban Invs., Inc. v. Branharn, 464 A.2d 93, 99 (D.C. 1983) ("Usually, the party

3 The property at issue is located in the District of Columbia, so D.C. law governs my

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seeking to avoid the contract must prove both elements . . . ." (emphasis added)); see also
Curtis v. Gordon, 980 A.2d 1238, 1244 (D.C. 2009) ("The court determines
unconscionability as a matter of law." (intemal quotation marks omitted)). The
addendum meets neither of these requirements.

First, plaintiff initialed every page, indicating that he read the agreement. See
generally Addendum (at the top of each page: "THIS 1S INTENDED T 0 BE A LEGALLY
BINDING AGREEMENT. READ IT CAREFULLY."). He also agreed that he "HAS
KNOWLEDGE AND EXPERIENCE 1N FINANCIAL AND BUSINESS MATTERS
THAT ENABLE[D] [HIM] TO EVALUATE THE MERIT AND RISKS OF THE
TRANSACTION CONTEMPLATED." Ia’. 11 5. The addendum also wamed: "This is a
legally binding contract. READ 1T CAREFULLY. 1f you do not understand the effect of
this contract, consult your attorney BEFORE signing." Id. 11 22. Having read, initialed,
and accepted these terms, plaintiff "cannot now claim that he lacked meaningful choice"
when he agreed to limit his potential recovery to the return of his deposit. Curtis, 980
A.2d at 1244.

Nor is the addendum unreasonably favorable to defendant. If CMI retums
plaintiffs $5,000, that will restore the parties to their pre-contract positions-an outcome
that is perfectly reasonable on its face. Further, 1 find it especially telling that Bailey

makes no argument that the original contract was unconscionable, and it too contains a

interpretation of the contract. See Contract at 1011 35.

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provision limiting his potential recovery to return of his deposit, in the event that a title
report and survey could not be obtained for any reason. See Contract11 19. If that clause
is reasonable-and plaintiff does not argue to the contrary~then as a matter of law, the
similar provisions in the addendum must be reasonable as well.

Accordingly, 1 find that the addendum’s limitation-on-damages provisions are
enforceable. Plaintiff thus has not~and based on the contract language clearly cannot~
plead facts sufficient to state a plausible claim for specific performance."

CONCLUSION

For the foregoing reasons, defendant’s Motion to Dismiss [Dkt. #4] is hereby

GRANTED. An appropriate order shall accompany this Memorandum Opinion.
,/litl..aw

RICHARD LLEoN
United States District Judge

4 Whether Bailey paid the $100 per day extension fee is irrelevant because that clause too limits
his recovery in the event of CMl’s default to retum of the deposit and any fees paid. See
Addendum 11 l.