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Ries v. Curtis

United States District Court, Third Circuit

June 24, 2013

MICHAEL P. RIES and AMY J. RIES H/W Plaintiffs,
v.
CRAIG T. CURTIS, et al. Defendants.

MEMORANDUM

RONALD L. BUCKWALTER, S.J.

Currently pending before the Court are three Motions to Dismiss filed by Defendants Larrabee, Cunningham, and McGowan, P.C., American International Relocation Solutions, LLC, and Penn Land Transfer Company. For the following reasons, the Motions are granted in part and denied in part.

I. FACTUAL AND PROCEDURAL BACKGROUND

This suit centers on the sale and purchase of a property, 8 Sunrise Drive, Doylestown, Pennsylvania (“the Property”). The facts, as set forth in the Complaint, are as follows. On or about August 19, 2006, Defendants Craig and Susan Curtis purchased the Property. (Compl. ¶ 12.) On an unknown date, but believed to be in 2011, the Curtises listed the Property for sale with Defendant Fox & Roach, LP (“Prudential”) and Defendant Nanci Presti, an agent and employee of Prudential. (Id. ¶ 15.) On or about July 9, 2011, the Curtises prepared a Seller’s Property Disclosure Statement to be provided to prospective buyers of the Property. (Id. ¶ 16.)

This form was provided to the Curtises by Defendant American International Relocation Solutions, LLC. (“AIReS”). (Id. ¶ 17.) The form contained the following questions and answers:

Question 6a: “Are you aware of any past or present water leakage in the house or other structures?”
Answer: No.
Question 6f: “Are there any defects in flooring, including stains?”
Answer: No.
Question 13e: “Do you know of any past or present drainage or flooding problems affecting the property?”
Answer: No.

(Id. ¶¶ 18–20.) These same questions were asked on a Seller’s Property Disclosure Statement provided by Ms. Presti, and the Curtises provided the same answers. (Id. ¶ 21–22.) Plaintiffs allege, however, that the Curtises’ answers were knowingly false, as they knew that during significant rain storms, substantial amounts of water flowed from the patio under the rear kitchen door and into the kitchen. (Id. ¶ 23.) Plaintiffs also allege that the Curtises knew there was a defect in the kitchen floor because holes had been drilled through the kitchen floor in front of the door in an effort to drain water entering the kitchen into the basement and a crawl space. (Id. ¶ 24.) In or around November, 2011, Ms. Presti showed the property to Plaintiffs and provided them with the two allegedly false Property Disclosure Statements. (Id. ¶ 26.) When Plaintiffs visited the Property, the Curtises covered the drain holes in the kitchen floor with a mat. (Id. ¶ 27.) On or about November 3, 2011, Plaintiffs submitted a proposed agreement of sale for purchase of the Property to Ms. Presti. (Id. ¶ 28.) This proposed agreement of sale listed the Curtises as the Property’s sellers. (Id. ¶ 29.) This offer of sale was rejected by the Curtises and/or AIReS. (Id. ¶ 30.) The Property remained unsold and vacant through February, 2012. (Id. ¶ 31.)

In or around March, 2012, Ms. Presti, still acting in the course and scope of her employment with Prudential, again showed the Property to Plaintiffs. (Id. ¶ 32.) The holes drilled in the kitchen floor were again covered by a mat. (Id. ¶ 33.) Upon information and belief, Plaintiffs state that Ms. Presti and Prudential knew that substantial amounts of water entered the kitchen during rain storms and that the Property Disclosure Forms were false when they showed the property to Plaintiffs. (Id. ¶ 34.) On or about March 20, 2012, Plaintiffs submitted a second proposed agreement of sale for purchase of the Property to Ms. Presti. (Id. ¶ 36.) This proposal listed AIReS as the seller. (Id. ¶ 37.) The proposal also included an AIReS-required Addendum to Purchase and Sale Agreement, which stated that AIReS had provided Plaintiffs with the two prior Seller Disclosure Agreements prepared by the Curtises and a new Seller Disclosure Agreement prepared by AIReS. (Id. ¶¶ 38–39.) This new Seller Disclosure Agreement did not mirror the language of the previous two, but stated on each page, “We [AIReS] are a relocation company, and as such we have never occupied this property. We make no guarantee, warranty, or representation about the condition of the property.” (Id. ¶ 40.) The Addendum also provided the following language:

[T]he company to issue the title insurance policy shall be: Larrabee & Cunningham . . . [and] . . . [T]hat the closing shall be through the agency listed above for Title.

(Id. ¶ 42 (emphasis added in Complaint).)

On or about March 23, 2012, AIReS accepted Plaintiffs’ offer to purchase the Property. (Id. ¶ 43.) Plaintiffs obtained title insurance through Defendant Penn Land Transfer Company (“PLTC”), a title insurance company allegedly operated and controlled by Defendant Larrabee, Cunningham, & McGowan, P.C. (“Larrabee”). (Id. ¶ 44.) The closing for the sale took place on May 29, 2012, and was conducted by an employee, servant, or agent of PLTC. (Id. ¶ 45.) The Housing and Urban Development Settlement Statement identified the seller as American International Relocation Solution [sic]. (Id. ¶ 46.) The same employee, servant, or agent of PLTC that conducted the closing also acted as an agent for AIReS. (Id. ¶ 47.) At the closing, PLTC produced a deed prepared by Larrabee, which listed the grantors as Craig and Susan Curtis and Plaintiffs as the grantees. (Id. ¶¶ 48–49.) The deed was recorded in the office of the Recorder of Deeds for Bucks County on June 12, 2012. (Id. ¶ 52.) Attached to the deed at the time of recording were two Pennsylvania “Realty Transfer Tax Statement[s] of Value” which each indicated they were prepared by Larrabee on March 16, 2012. (Id. ¶¶ 53–54.) One of these forms stated that the Curtises conveyed 100% of their interest in the property to AIReS, and the other indicated that AIReS conveyed 100% of its interest to Plaintiffs. (Id. ¶¶ 55–56.)

Plaintiffs filed the instant suit on March 18, 2013 bringing six counts: (1) violation of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2608, against the Curtises and AIReS for “Requirement That Title Insurance Be Purchased From Larrabee & Cunningham;” (2) violation of RESPA, 12 U.S.C. § 2607 for “Failure to Give Notice of Affiliated Business Arrangement;” (3) “Failure to Disclose Material Defect” against the Curtises, AIReS, Prudential, and Ms. Presti; (4) violation of the Unfair Trade Practices and Consumer Protection Law (“UTPCPL”), 73 Pa. C.S. § 201-9.2, against the Curtises, AIReS, Prudential, Ms. Presti, and PLTC; (5) Common Law Fraud against the Curtises, AIReS, Prudential, and Ms. Presti for failure to disclose the existence of water leaks in the Property; and (6) common law fraud against the Curtises, AIReS, Larrabee, and PLTC for intentionally making false representations on the deed and tax forms and misrepresenting the owner of the Property.

On April 16, 2013, Larrabee filed a Motion to Dismiss Count VI. Plaintiffs filed a Response in Opposition on April 22, and Larrabee filed a Reply Brief on April 29. On May 6, 2013, AIReS filed a Motion to Dismiss the entirety of the Complaint. Plaintiffs filed a Response in Opposition on May 17. On May 6, 2013, PLTC filed a Motion to Dismiss Counts II, IV and VI. Plaintiffs filed a Response in Opposition on May 17. This matter is now ripe for judicial consideration.

II. STANDARD OF REVIEW

Under Rule 12(b)(6), a defendant bears the burden of demonstrating that the plaintiff has not stated a claim upon which relief can be granted. Fed. R. Civ. P.12(b)(6); see also Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005). In Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007), the United States Supreme Court recognized that “a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. at 555. Following these basic dictates, the Supreme Court, in Ashcroft v. Iqbal, 556 U.S. 662 (2009), subsequently defined a two-pronged approach to a court’s review of a motion to dismiss. “First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. at 678. Thus, although “Rule 8 marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era . . . it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.” Id. at 678–79. Second, the Supreme Court emphasized that “only a complaint that states a plausible claim for relief survives a motion to dismiss.” Id. at 679. “Determining whether a complaint states a plausible claim for relief will, as the Court of Appeals observed, be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. A complaint does not show an entitlement to relief when the well-pleaded facts do not permit the court to infer more ...


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