Court Opinion

ID: 4156031
Source: CourtListenerOpinion
Date Created: 2017-03-28 16:01:27.174318+00
Date Added: 2024-06-11T07:46:39.633045
License: Public Domain

UNITED STATES DISTRICT COURT
                            FOR THE DISTRICT OF COLUMBIA

    COVEY RUN, LLC,
        Plaintiff,
        v.                                              Civil Action No. 1:15-1997 (CKK)
    WASHINGTON CAPITAL, LLC, et al.,
        Defendants.

                                  MEMORANDUM OPINION
                                     (March 28, 2017)

         Plaintiff Covey Run, LLC (“Covey Run” or “Plaintiff”) brings this action alleging that

Defendants Washington Capital, LLC (“Washington Capital”), Jemel Lyles, Melvin Sanders, and

Steve Evans perpetrated a fraudulent scheme that culminated in the alleged theft of $1.2 million

from Covey Run. Covey Run alleges that Defendant Washington Capital breached its contract

with Covey Run by accessing $1.2 million held in escrow without the prior written knowledge

and consent of Covey Run. Covey Run further alleges that Defendants L. Gregory Loomar and

the Law Offices of L. Gregory Loomar P.A. (collectively, the “Loomar Defendants”), committed

professional negligence and failed to meet their fiduciary duties as the escrow agent for the funds

in question, and that Defendant Michael Blackwell negligently misrepresented to Covey Run that

Defendant Washington Capital was a reputable private equity firm.

         Two motions to dismiss are currently pending before the Court: the Loomar Defendants’

[44] Motion to Dismiss Plaintiff’s Amended Complaint for lack of subject matter jurisdiction,

and Defendant Blackwell’s [98] Motion to Dismiss for lack of personal jurisdiction and for

various other reasons. Upon consideration of the pleadings, 1 the relevant legal authorities, and

1
 The Court’s consideration has focused on the following documents: Loomar Defs.’ Mot. to
Dismiss Pl.’s Am. Compl., ECF No. 44 (“Loomar Mot.”); Pl.’s Opp’n to Loomar Defs.’ Mot. to
Dismiss, ECF No. 49 (“Pl.’s Opp’n to Loomar Mot.”); Loomar Defs.’ Reply in Support of Mot.

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the record as a whole, the Court DENIES both motions. The Court concludes that it has subject

matter jurisdiction over this action and personal jurisdiction over Defendant Blackwell. It further

concludes that the various other grounds for dismissal urged by Blackwell lack merit.

                                       I. BACKGROUND

       The Court has already set forth the factual background of this case in detail in its July 11,

2016 Memorandum Opinion, which is incorporated by reference and made part of this

Memorandum Opinion. See generally Covey Run, LLC v. Washington Capital, LLC, 196 F.

Supp. 3d 87 (D.D.C. 2016). After that Memorandum Opinion and accompanying Order were

issued, Plaintiff filed the now operative Amended Complaint in order to add a claim for

professional negligence against the Loomar Defendants. Pl.’s Am. Compl., ECF No. 38. The

Loomar Defendants then filed the pending Motion to Dismiss Plaintiff’s Amended Complaint, in

which Defendants contend that this Court lacks subject matter jurisdiction over this action

because complete diversity among the parties is absent. 2

to Dismiss, ECF No. 51 (“Loomar Reply”); Pl.’s Response to October 25 Order and Surreply,
ECF No. 52; Def. Blackwell’s Am. Mot. to Dismiss, ECF No. 98 (“Blackwell Mot.”); Pl.’s
Opp’n to Def. Blackwell’s Am. Mot. to Dismiss, ECF No. 102 (“Pl.’s Opp’n to Blackwell
Mot.”); and Def. Blackwell’s Resp. to Pl.’s Opp’n to Def. Blackwell’s Am. Mot. to Dismiss,
ECF No. 108 (“Blackwell Resp.”). In an exercise of its discretion, the Court finds that holding
oral argument in this action would not be of assistance in rendering a decision. See LCvR 7(f).
2
  In the “Preliminary Statement/Introduction” portion of the Loomar Defendants’ Memorandum
of Law, Defendants also state that the Court should dismiss Plaintiff’s Amended Complaint
because it fails to state a claim for which relief may be granted and because the Court should
abstain from exercising its jurisdiction under the Colorado River doctrine. These arguments,
which were raised in the Loomar Defendants’ first Motion to Dismiss in this case and previously
rejected by the Court, see Memorandum Opinion, ECF No. 32, appear to have been mistakenly
referenced, as the Loomar Defendants present no argument in support of them in the remainder
of their memorandum. To the extent these arguments were not referenced mistakenly, the Court
notes that it rejects them now for the same reasons stated in its July 11, 2016 Memorandum
Opinion. The Court will not repeat the analysis in that Opinion here, although it incorporates it
by reference into this Memorandum Opinion.

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       In addition, Defendant Blackwell—who is representing himself pro se—has sent the

Court various documents entitled “Motion to Dismiss.” These include an “Amended Motion to

Dismiss Due to Lack of Personal Jurisdiction,” a “Motion to Dismiss Due to Frivolous Lawsuit

against Michael Blackwell,” a “Motion to Dismiss Due to Judicial Corruption,” and a “Motion to

Dismiss Due to Violations of 18 U.S. Code 241 & 242.” ECF No. 98. The Court granted

Blackwell leave to file those documents, and instructed Plaintiff that it could treat them as a

single Motion to Dismiss for the purposes of responding. Plaintiff filed a timely response to

Defendant Blackwell’s motions, ECF No. 102, and Blackwell filed a reply, ECF No. 108.

                                    II. LEGAL STANDARDS

A. Subject Matter Jurisdiction under Rule 12(b)(1)
       A court must dismiss a case pursuant to Federal Rule 12(b)(1) when it lacks subject

matter jurisdiction. In determining whether there is jurisdiction, the Court may “consider the

complaint supplemented by undisputed facts evidenced in the record, or the complaint

supplemented by undisputed facts plus the court’s resolution of disputed facts.” Coalition for

Underground Expansion v. Mineta, 333 F.3d 193, 198 (D.C. Cir. 2003) (citations omitted); see

also Jerome Stevens Pharm., Inc. v. Food & Drug Admin., 402 F.3d 1249, 1253 (D.C. Cir. 2005)

(“[T]he district court may consider materials outside the pleadings in deciding whether to grant a

motion to dismiss for lack of jurisdiction.”). “At the motion to dismiss stage, counseled

complaints, as well as pro se complaints, are to be construed with sufficient liberality to afford

all possible inferences favorable to the pleader on allegations of fact.” Settles v. U.S. Parole

Comm’n, 429 F.3d 1098, 1106 (D.C. Cir. 2005). In spite of the favorable inferences that a

plaintiff receives on a motion to dismiss, it remains the plaintiff’s burden to prove subject matter

jurisdiction by a preponderance of the evidence. Am. Farm Bureau v. Envtl. Prot. Agency, 121
F. Supp. 2d 84, 90 (D.D.C. 2000). “Although a court must accept as true all factual allegations

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contained in the complaint when reviewing a motion to dismiss pursuant to Rule 12(b)(1), [a]

plaintiff[’s] factual allegations in the complaint . . . will bear closer scrutiny in resolving a

12(b)(1) motion than in resolving a 12(b)(6) motion for failure to state a claim.” Wright v.

Foreign Serv. Grievance Bd., 503 F. Supp. 2d 163, 170 (D.D.C. 2007) (internal citations and

quotation marks omitted).

B. Personal Jurisdiction under Rule 12(b)(2)
        When personal jurisdiction is challenged under Federal Rule 12(b)(2), the plaintiff bears

the burden of establishing a factual basis for asserting personal jurisdiction over a defendant. See

Crane v. N.Y. Zoological Soc’y, 894 F.2d 454, 456 (D.C. Cir. 1990). At this stage, the plaintiff

“can satisfy that burden with a prima facie showing.” Mwani v. bin Laden, 417 F.3d 1, 7 (D.C.

Cir. 2005) (quoting Edmond v. U.S. Postal Serv. Gen. Counsel, 949 F.2d 415, 424 (D.C. Cir.

1991)). To do so, the plaintiff cannot rest on bare allegations or conclusory statements but “must

allege specific acts connecting [the] defendant with the forum.” Second Amendment Found. v.

U.S. Conference of Mayors, 274 F.3d 521, 524 (D.C. Cir. 2001) (internal quotation marks

omitted). “To make such a showing, the plaintiff is not required to adduce evidence that meets

the standards of admissibility reserved for summary judgment and trial[;]” but rather, the

plaintiff may “rest her arguments on the pleadings, ‘bolstered by such affidavits and other

written materials as [he] can otherwise obtain.’” Urban Inst. v. FINCON Servs., 681 F. Supp. 2d
41, 44 (D.D.C. 2010) (quoting Mwani, 417 F.3d at 7).

C. Failure to State a Claim under Rule 12(b)(6)

        Pursuant to Federal Rule 12(b)(6), a party may move to dismiss a complaint on the

grounds that it “fail[s] to state a claim upon which relief can be granted.” Fed. R. Civ. P.

12(b)(6). “[A] complaint [does not] suffice if it tenders ‘naked assertion[s]’ devoid of ‘further

factual enhancement.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.

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Twombly, 550 U.S. 544, 557 (2007)). Rather, a complaint must contain sufficient factual

allegations that, if accepted as true, “state a claim to relief that is plausible on its face.”

Twombly, 550 U.S. at 570. “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.” Iqbal, 556 U.S. at 678.

                                          III. DISCUSSION

        The Court will DENY both of the pending motions to dismiss. First, the Court will (A)

deny the Loomar Defendants’ Motion to Dismiss for lack of subject matter jurisdiction. The

Court finds that it has diversity jurisdiction over this lawsuit because the parties’ citizenships are

diverse and the amount in controversy exceeds $75,000. Second, the Court will (B) deny

Defendant Blackwell’s Motion to Dismiss. The Court finds that it has personal jurisdiction over

Blackwell as a result of his transacting business in the District of Columbia, and that the

remainder of Blackwell’s arguments in support of dismissal lack merit.

A. Loomar Defendants’ Motion to Dismiss

        The Loomar Defendants’ Motion to Dismiss questions this Court’s subject matter

jurisdiction over this action. Plaintiff has invoked the Court’s diversity jurisdiction, which

requires both a complete diversity of citizenship between the parties and an amount in

controversy exceeding $75,000. 28 U.S.C. § 1332(a)(1). The parties do not dispute that the

amount in controversy requirement is satisfied in this case. The parties do, however, dispute

whether complete diversity is present. Plaintiff contends that it is a citizen of Minnesota,

Wyoming and Wisconsin, and that Defendants are citizens of Virginia, Maryland, Texas, Ohio

and Florida. Pl.’s Opp’n to Loomar Mot. at 1. Loomar Defendants’ Motion to Dismiss seeks to

show that diversity is absent by challenging the citizenship of three parties or entities.

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        First, Defendants challenge whether Augustana Care, a member of the Plaintiff Limited

Liability Company (“LLC”), is actually a citizen of Minnesota as alleged by Plaintiff. Augustana

Care’s citizenship is relevant here because Plaintiff is an LLC whose citizenship is determined

by the citizenship of its members. See Hoch v. Eli Lilly & Co., 736 F. Supp. 2d 219, 220 (D.D.C.

2010) (“a limited-liability company’s citizenship is determined by the citizenship of its

members.”). Plaintiff alleges in its Amended Complaint that Augustana Care is a citizen of

Minnesota, see Pl.’s Am. Compl. ¶ 1 (“Augustana Care, a citizen of the State of Minnesota”), and

this allegation is supported by all of the evidence currently before the Court. A “corporation is

‘deemed to be a citizen of every State and foreign state by which it has been incorporated and of

the State or foreign state where it has its principal place of business.” Diaz v. Neighbors

Consejo, 77 F. Supp. 3d 227, 229 (D.D.C. 2015) (quoting 28 U.S.C. § 1332(c)(1)). Plaintiff has

submitted a sworn declaration that states that Augustana Care is a corporation registered in

Minnesota that has its headquarters in Minnesota. See Decl. of Andrew Auger, ECF No. 49-1

(“First Auger Decl.”), at ¶ 5. Plaintiff also provides Augustana Care’s registration papers as

evidence of these facts. Id., Ex. 1. Loomar Defendants make no attempt to contest this

evidence, offer any rebutting facts, or even suggest alternative places of citizenship. The Court

accordingly finds that Augustana Care is a citizen of Minnesota, as alleged by Plaintiff, and does

not upset the diversity of parties in this case.

        Second, Defendants challenge the citizenship of Atlantis Information Systems, LLC

(“Atlantis”). Defendants argue that Plaintiff failed to address in its Amended Complaint the fact

that Atlantis is a Virginia LLC. Plaintiff concedes that Atlantis is a Virginia LLC, but asserts that

Atlantis was not a member of Plaintiff’s LLC at the time this lawsuit was filed, and accordingly

its citizenship is not relevant to the Court’s jurisdictional analysis. The Court agrees.

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        As part of the transaction at issue in this case, Plaintiff added Atlantis as a member of its

LLC by amending its Member Control Agreement (“MCA”) on or around September 22, 2014.

See First Auger Decl. at ¶ 7. Defendant Steve Evans, as Atlantis’ President, signed an “Investor

Commitment Letter” issued by Plaintiff, stating that Atlantis would contribute to Plaintiff

$660,000 in exchange for its membership interest. See Decl. of Andrew Auger, ECF No. 52-1

(“Second Auger Decl.”), Ex. A. The parties agreed on November 25, 2014 as a closing date for

this transaction. Id. ¶ 10. The closing never occurred, and Atlantis never provided the $660,000.

Id. ¶ 19.

        Accordingly, Plaintiff’s Board of Governors subsequently voted to terminate Atlantis’

membership interest for failing to make the required capital contribution. Section 3.6 of the

MCA expressly gave Plaintiff the authority to take this action in the case of a defaulting member,

after notice had been provided. See Second Auger Decl., Ex. B at 6-7 (“If a Member fails to

make any required Capital Contribution to fund an Unfunded Commitment on or before the date

on which such amount is due, the Member will be deemed to be in default . . . and written notice

of default will be given . . . if the Defaulting Member does not cure a default . . . within ten (10)

business days of the receipt of the notice . . . the Company (in its sole discretion) may . . .

declare, by notice of forfeiture to the Defaulting Member, that the Defaulting Member’s interest

in the Company . . . is forfeited.”).

        The necessary notice was provided here. On July 21, 2015, Plaintiff sent Atlantis a letter

in which Plaintiff stated that Atlantis had failed to provide the $660,000 to Plaintiff at the

determined closing date of November 25, 2014. See First Auger Decl., Ex. 3. The letter declared

that this was a “breach of the Contribution Agreement,” demanded the contribution be made by

August 13, 2015, and stated that “if payment is not made, [Plaintiff] will . . . cancel the

                                                   7
Contribution Agreement.” Id. The letter expressly stated that “[a]ll membership interests in the

Company owned by Atlantis will be forfeited.” Id. Atlantis never responded to this letter or

funded the promised amount. On August 14, 2015, Plaintiff sent Atlantis a second letter in

which it stated that Atlantis had failed to make the required investment and that Plaintiff

accordingly “exercises its remedies . . . to cancel the Contribution Agreement and your

Membership Interest.” See First Auger Decl., Ex. 4. The letter stated: “Please take notice that

your Membership Interest in Covey Run, LLC is hereby cancelled.” Id. The termination of

Atlantis’ interest was made effective as of August 14, 2015. See Second Auger Decl. ¶ 22.

Atlantis has never challenged this termination to this day. This lawsuit was filed roughly three

months later, on November 13, 2015. See Compl., ECF No. 1. Atlantis’s citizenship is

accordingly irrelevant.

       Defendants devote roughly eight pages of their reply brief to a confused and ultimately

unpersuasive argument that Atlantis’ citizenship is relevant because Atlantis was not properly

removed from Plaintiff’s LLC. In essence, Loomar Defendants’ argument appears to be that

Atlantis was not actually required to provide its $660,000 capital contribution on November 25,

2014, and that Plaintiff’s July 21, 2015 Letter demanding that amount was accordingly not a

notice of default, but merely a “capital call.” Specifically, Defendants argue that the July 21,

2015 Letter “could [ ] not possibly be interpreted by Atlantis as a notice of default but only as a

capital call for Atlantis’ entire Unfunded Commitment.” Loomar Defs.’ Reply at 11. This

argument is not persuasive for a number of reasons. First, it is not supported by any of the

evidence before the Court. Plaintiff has submitted a sworn declaration and supporting

correspondence backing up its claim that Atlantis agreed to provide its capital contribution at

closing on November 25, 2014, see Second Auger Decl. ¶¶ 8-18, and Loomar Defendants have

                                                 8
provided no contradictory evidence on this point. Second, Defendants’ interpretation of the July

21, 2015 Letter—that it could “not possibly be interpreted” as a notice of default—is not

credible. The July 21, 2015 Letter informed Atlantis that it had been required to provide its

funding by November 25, 2014, that it had failed to make the required capital contribution by

that time, and that it was being deemed in breach of the Contribution Agreement. The Court

finds that this could only reasonably be interpreted as a notice of default. Finally, and most

importantly, Defendants’ argument misses the point. Atlantis itself has never challenged the

sufficiency of the notice it was given or of its termination generally, as Loomar Defendants do

here. Accordingly, as a matter of fact, Atlantis was terminated as a member of the Plaintiff LLC

as of August 14, 2015. Loomar Defendants’ attempt to take up Atlantis’ cause and challenge its

termination long after this case was initiated cannot and does not change the fact that Atlantis

was simply not a member of the Plaintiff LLC at the time of filing. Atlantis’ citizenship

therefore does not disrupt the diversity of the parties in this case.

        Finally, Defendants raise the question of whether Defendant Steve Evans is a citizen of

Ohio, as alleged by Plaintiff, or actually a citizen of Virginia. Because no member of Plaintiff is

a citizen of Virginia or Ohio, this issue is irrelevant to the Court’s jurisdictional analysis.

        In sum, the Court rejects the Loomar Defendants’ arguments with respect to the

citizenship of these three parties or entities and finds that complete diversity is present in this

case. Accordingly, the Court will DENY the Loomar Defendant’s Motion to Dismiss for lack of

subject matter jurisdiction.

B. Defendant Blackwell’s Motion to Dismiss

        The Court will also DENY Defendant Blackwell’s Motion to Dismiss. Blackwell, who is

proceeding pro se in this matter, has entered a special appearance and moved to dismiss the

                                                   9
Complaint against him on a number of grounds. Blackwell has filed documents captioned

“Amended Motion to Dismiss Due to Lack of Personal Jurisdiction,” “Motion to Dismiss Due to

Frivolous Lawsuit against Michael Blackwell,” “Motion to Dismiss Due to Judicial Corruption,”

and “Motion to Dismiss Due to Violations of 18 U.S. Code 241 & 242.” ECF No. 98. None of

these motions have merit.

       First, Blackwell argues that the Complaint against him should be dismissed for lack of

personal jurisdiction. Plaintiff counters that personal jurisdiction is present here because

“Blackwell transacted business in this District.” Pl.’s Opp’n to Blackwell Mot. at 4. “As subject

matter jurisdiction in this case is based on diversity of citizenship, we look to District law to

determine whether there is a basis for exercising personal jurisdiction over” Defendant. Crane,
894 F.2d at 455. The District of Columbia’s long-arm statute states, in relevant part, that “[a]

District of Columbia court may exercise personal jurisdiction over a person, who acts directly or

by an agent, as to a claim for relief arising from the person’s transacting any business in the

District of Columbia.” D.C. Code § 13-423(a)(1). When considering whether to exercise

personal jurisdiction pursuant to this section of the District’s long-arm statute, “the Court must

answer two questions: whether the defendant has ‘transacted business,’ and whether the

plaintiff’s injury arises from that business.” Alkanani v. Aegis Def. Servs., LLC, 976 F. Supp. 2d
13, 24 (D.D.C. 2014).

       Keeping in mind that Plaintiff need only make a prima facie showing to survive a motion

to dismiss for lack of personal jurisdiction at this stage, and that “factual discrepancies appearing

in the record must be resolved in favor of the plaintiff,” Crane, 894 F.2d at 456, the Court

concludes that Plaintiff has sufficiently established a factual basis for asserting personal

jurisdiction over Defendant Blackwell based on his transacting business in the District of

                                                  10
Columbia. This case is about an alleged scheme led by Washington Capital, a company located

in Washington, D.C., to steal $1.2 Million from Plaintiff. See Pl.’s Am. Compl., Ex. 1

(Washington Capital sales material listing Washington, D.C. address), Ex. 2 (Letter of

Commitment between Washington Capital and Covey Run listing Washington Capital’s

Washington, D.C. address). Plaintiff alleges that it was induced into this fraudulent scheme by

Defendant Blackwell, who introduced Plaintiff to representatives of that company, represented

that he was working on behalf of that company, and represented that the company was reputable

and had certain lucrative financial ties. Id., ¶¶ 14, 63. Plaintiff also asserts—and has provided

evidence in support of this assertion—that Blackwell was well aware that Washington Capital

was located in Washington, D.C. when he was involved in this transaction. See Decl. of Iris

Figueroa Rosario, ECF No. 102-1 (“Rosario Decl.”), Ex. C (Apr. 22, 2014 e-mail from

Washington Capital representative to Michael Blackwell listing Washington Capital’s District of

Columbia address). According to the Amended Complaint and evidence Plaintiff has provided in

opposition to Blackwell’s motion, after Plaintiff was successfully induced into this alleged fraud

Defendant Blackwell provided additional services in support of the fraud, both by making further

misrepresentations to Plaintiff regarding the status of its funds, Pl.’s Am. Compl., ¶ 44, and by

acting as a loan closer in the disputed transaction, see Rosario Decl., Ex. A (Oct. 4, 2014 e-mail

from Michael Blackwell to non-party Karen Baas regarding transaction). The result of this

allegedly fraudulent transaction which Defendant Blackwell allegedly induced Plaintiff to enter

into was that Plaintiff’s funds were transferred to the bank account of Washington Capital in

Washington, D.C. Pl.’s Am. Compl., Ex. 10 at 4. Portions of those funds were then allegedly to

be transferred to Defendant Blackwell to compensate him for his services in this scheme. See

Rosario Decl., Ex. B (Michael Blackwell’s invoice for $105,400 to Washington Capital for

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services rendered regarding transaction). Based on these facts, the Court concludes that

Blackwell has transacted business in the District of Columbia, that Plaintiff’s injuries arise from

that business, and that personal jurisdiction over Defendant Blackwell accordingly comports with

the District’s long arm statute.

       Exercising personal jurisdiction over Defendant based on this connection to the District

of Columbia also comports with due process requirements. Due process is satisfied “if the

defendant’s ‘minimum contacts’ with the District are such that subjecting it to suit would ‘not

offend traditional notions of fair play and substantial justice.’” Crane, 894 F.2d at 455-56

(quoting International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal quotation

marks omitted)). “Under the ‘minimum contacts’ standard, courts must insure that ‘the

defendant’s conduct and connection with the forum State are such that he should reasonably

anticipate being haled into court there.’” GTE New Media Servs. Inc. v. BellSouth Corp., 199
F.3d 1343, 1347 (D.C. Cir. 2000) (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S.
286, 297 (1980)). In this case, Defendant allegedly induced Plaintiff to enter into a transaction

with a District of Columbia based company whereby Plaintiff was made to transfer considerable

sums of money to that company’s bank in the District of Columbia. Defendant purported to

work on behalf of that company, allegedly assisted the fraudulent transaction, and allegedly was

to receive a share of the wrongly transferred funds. Based on these allegations, the Court is

satisfied that Defendant could reasonably have anticipated being sued in the District of

Columbia.

       The Court notes that it has reviewed Defendant Blackwell’s [108] Response to Plaintiff’s

Opposition to his Motion to Dismiss, in which Defendant asserts, in a conclusory manner, a

number of facts contrary to those alleged by Plaintiff. For example, Defendant appears to

                                                12
suggest—although he has not provided evidence that would support this assertion—that all of the

business he did with Washington Capital was conducted through Virginia, and not the District of

Columbia. See Blackwell Resp. at 2-3. Whatever relevance these facts may have to the Court’s

personal jurisdiction analysis, when resolving a motion to dismiss for lack of personal

jurisdiction, if true, “factual discrepancies appearing in the record must be resolved in favor of

the plaintiff.” Crane, 894 F.2d at 456. Accordingly, the Court has made its determination as to

personal jurisdiction over Defendant, as described above, based on the record with factual

discrepancies resolved in favor of Plaintiff.

       The remaining grounds for dismissal raised by Defendant Blackwell similarly lack merit.

The Court interprets Defendant’s “Motion to Dismiss Due to Frivolous Lawsuit Against Michael

Blackwell” as a challenge under Federal Rule 12(b)(6) for failure to state a claim for which relief

can be granted. This challenge is not well-taken. Plaintiff asserts a cause of action for negligent

misrepresentation against Blackwell. “In the District of Columbia, a plaintiff alleging negligent

misrepresentation must establish that (1) the defendant negligently communicated false

information, (2) the defendant intended or should have recognized that the plaintiff would likely

be imperiled by action taken in reliance upon his misrepresentation, and that (3) the plaintiff

reasonably relied upon the false information to his detriment.” Ponder v. Chase Home Fin.,

LLC, 865 F. Supp. 2d 13, 20 (D.D.C. 2012).

       Plaintiff has adequately alleged facts that, if true, would satisfy these three elements.

Plaintiff has pleaded that “Defendant Blackwell negligently represented to Covey Run that

Defendant Washington Capital was a reputable private equity firm with ties to major foreign

financial institutions,” and that “these foreign financial institutions would fund” Plaintiff’s

project. Pl.’s Am. Compl., ¶ 63. Moreover, Plaintiff alleges that “Defendant Blackwell knew or

                                                 13
should have known that these representations were false” and that he “intended or should have

recognized that Covey Run would likely be imperiled by action taken in reliance upon his

misrepresentations.” Id. ¶¶ 64-65. Plaintiff states that, had it “known the true facts, it would not

have entered into the Letter of Commitment or other agreements with Washington Capital, and

would not have transferred $1.2 million in funds for the project.” Id. ¶ 66. Assuming that these

allegations are true, as the Court must for the purposes of a motion to dismiss under Federal Rule

12(b)(6), the Court concludes that Plaintiff has sufficiently alleged a negligent misrepresentation

claim.

         Finally, little need be said about the remainder of the arguments Defendant Blackwell

raises in support of his Motion to Dismiss. Defendant moves to dismiss “due to judicial

corruption” with no specifics, and “due to violations of 18 U.S. Code 241 & 242” (criminal code

provisions relating to the deprivation of civil rights). These do not represent cognizable reasons

the Court may dismiss a civil complaint at the pleading stage.

         In sum, the Court concludes that it has personal jurisdiction over Blackwell, that Plaintiff

has sufficiently alleged a negligent misrepresentation claim against Blackwell, and that the

remainder of Defendant’s arguments for dismissing this case lack merit. Accordingly, the Court

will deny Blackwell’s Motion to Dismiss.

                                        IV. CONCLUSION

         For the foregoing reasons, the Court DENIES the Loomar Defendants’ [44] Motion to

Dismiss and also DENIES Defendant Blackwell’s [98] Motion to Dismiss.

         An appropriate Order accompanies this Memorandum Opinion.

                                                          /s/
                                                       COLLEEN KOLLAR-KOTELLY
                                                       United States District Judge

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