United States District Court, M.D. Pennsylvania
REPORT AND RECOMMENDATION
C. Carlson United States Magistrate Judge
case, which comes before us for consideration of a motion to
dismiss filed by the defendant, Weichert Realtors Trademark,
(Doc, 45), underscores the importance of procedural precision
in litigation. The plaintiffs initially filed a complaint in
May of 2017, (Doc. 1), which alleged that Weichert and others
were involved in a far-reaching real estate fraud scheme.
Three months later, on August 8, 2017, the plaintiffs filed
an amended complaint in this case. (Doc. 25.) That amended
complaint involved the same basic core of operative facts,
but changed the legal claims brought against a number of
defendants, including Weichert, adding some claims while
deleting other causes of action.
amended complaint is now the operative pleading in this case.
Nonetheless, when defendant Weichert filed this motion to
dismiss, its motion attacked the legal sufficiency of the
plaintiffs' original complaint. (Doc. 50.) This somewhat
misplaced attack inspired a rejoinder from the plaintiffs
which invited the court to simply discount this motion since
it sought dismissal of a complaint which was no longer the
relevant pleading in this case. (Doc. 53.) That rejoinder, in
turn, caused Weichert to file a reply which acknowledged that
the defendant's motion was aimed at the wrong complaint
in this case, but nonetheless invited us to consider the
defendant's motion to dismiss as it related to
overlapping claims found in both the original and the amended
complaints. (Doc. 54.)
we have accepted this invitation, at least in part, for the
reasons set forth below, it is recommended that this motion
to dismiss be DENIED.
Statement of Facts and of the Case
considering this motion, and the sufficiency of the
plaintiffs' allegations as they relate to Weichert
Realtors, we are guided by the well-pleaded facts set forth
in in the plaintiffs' 45-page, 368-paragraph amended
civil complaint. (Doc. 25.)
complaint describes a pattern of fraudulent real estate
transactions involving defendant Ignacio Beato, who is
alleged to have obtained money from the 16 plaintiffs by
fraudulently representing that he was authorized to negotiate
the sale of certain real estate. In fact, according to the
amended complaint Beato had no such authority and was simply
and systematically cheating unsophisticated buyers by
inducing them to pay him for the purchase of properties which
Beato had no authority to sell. Relying upon these false and
fraudulent pretenses, representations and promises, the
victim-plaintiffs allege that they entrusted moneys to Beato,
funds which Beato stole and converted for his own use and the
use of others. (Id.)
much of the complaint focuses on this extensive pattern of
fraud allegedly committed by Beato, the amended complaint
also contains allegations that, if true, may plausibly state
a basis for liability against Weichert as well. Specifically,
according to the amended complaint, between 2014 and May of
2015, Beato was employed by, and affiliated with, Weichert.
(Doc. 25, ¶¶ 30, 34, 80-81.) Holding himself out as
an agent of Weichert, and often acting at a time when he was,
in fact, allegedly employed by Weichert, the amended
complaint alleges that Beato induced a number of
victim-plaintiffs to entrust funds to him ostensibly for the
purchase of real estate. (Id., ¶¶ 30, 34,
80-81, 97, 160, 162-64, 170, 171, 176-79, 196-200, 210, 212,
215, 219, 227, 230, 233-34, 241, 244-54.) However, instead of
applying these funds for their stated purpose, it is alleged
that Beato converted these moneys to his benefit and to the
benefit of others.
against the backdrop of these well-pleaded facts, the
plaintiffs have lodged six counts against Weichert in this
amended complaint: two counts of common law fraud and
fraudulent misrepresentation; (Id., Counts V and
XII), two counts of violations of Pennsylvania's Unfair
Trade Practices and Consumer Protection statute,
(“UTPCPL”); (Id., Counts, VI and XIII),
a claim of conversion, (Id., Count XI), and a claim
of negligent supervision and negligent misrepresentation.
(Id., Count VII.) In each instance, the
plaintiffs' amended complaint explicitly rests the claims
against Weichert on theories of agency law, asserting that
Weichert is potentially liable for the acts of its agent
Beato. (Id.) Notably, the amended complaint eschews
a number of claims that may have been lodged against Weichert
in the plaintiffs' original complaint, including
racketeering and loss of consortium claims.
the legal landscape framed in this fashion, Weichert filed
its motion to dismiss, albeit a motion which focused on the
claims set forth in the original complaint instead of those
alleged in the amended complaint. While Weichert has
recognized this error in its reply brief, it has nonetheless
invited us to consider its arguments as those arguments may
pertain to any overlapping claims found in both complaints.
We have done so, but find that none of these claims are
subject to dismissal on the pleadings at this time.
Therefore, we recommend that this motion to dismiss be
Motion to Dismiss-Standard of Review
motion to dismiss tests the legal sufficiency of a complaint.
It is proper for the court to dismiss a complaint in
accordance with Rule 12(b)(6) of the Federal Rules of Civil
Procedure only if the complaint fails to state a claim upon
which relief can be granted. Fed.R.Civ.P. 12(b)(6). With
respect to this benchmark standard for legal sufficiency of a
complaint, the United States Court of Appeals for the Third
Circuit has aptly noted the evolving standards governing
pleading practice in federal court, stating that:
Standards of pleading have been in the forefront of
jurisprudence in recent years. Beginning with the Supreme
Court's opinion in Bell Atlantic Corp. v.
Twombly, 550 U.S. 544 (2007) continuing with our opinion
in Phillips [v. County of Allegheny, 515
F.3d 224, 230 (3d Cir. 2008)] and culminating recently with
the Supreme Court's decision in Ashcroft v.
Iqbal BU.S.B, 129 S.Ct. 1937 (2009) pleading standards
have seemingly shifted from simple notice pleading to a more
heightened form of pleading, requiring a plaintiff to plead
more than the possibility of relief to survive a motion to
Fowler v. UPMC Shadyside, 578 F.3d 203, 209-10 (3d
considering whether a complaint fails to state a claim upon
which relief may be granted, the court must accept as true
all allegations in the complaint and all reasonable
inferences that can be drawn therefrom are to be construed in
the light most favorable to the plaintiff. Jordan v. Fox
Rothschild, O'Brien & Frankel, Inc., 20 F.3d
1250, 1261 (3d Cir. 1994). However, a court “need not
credit a complaint's bald assertions or legal conclusions
when deciding a motion to dismiss.” Morse v. Lower
Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997).
Additionally a court need not “assume that a ...
plaintiff can prove facts that the ... plaintiff has not
alleged.” Associated Gen. Contractors of Cal. v.
California State Council of Carpenters, 459 U.S. 519,
526 (1983). As the Supreme Court held in Bell Atlantic
Corp. v. Twombly, 550 U.S. 544 (2007), in order to state
a valid cause of action a plaintiff must provide some factual
grounds for relief which “requires more than labels and
conclusions, and a formulaic recitation of the elements of a
cause of actions will not do.” Id. at 555.
“Factual allegations must be enough to raise a right to
relief above the speculative level.” Id.
keeping with the principles of Twombly, the Supreme
Court has underscored that a trial court must assess whether
a complaint states facts upon which relief can be granted
when ruling on a motion to dismiss. In Ashcroft v.
Iqbal, 556 U.S. 662 (2009), the Supreme Court held that,
when considering a motion to dismiss, a court should
“begin by identifying pleadings that, because they are
no more than conclusions, are not entitled to the assumption
of truth." Id at 679. According to the Supreme
Court, “[t]hreadbare recitals of the elements of a
cause of action, supported by mere conclusory statements, do
not suffice." Id. at 678. Rather, in conducting
a review of the adequacy of complaint, the Supreme Court has
advised trial courts that they must:
[B]egin by identifying pleadings that because they are no
more than conclusions are not entitled to the assumption of
truth. While legal conclusions can provide the framework of a
complaint, they must be supported by factual allegations.
When there are well-pleaded factual allegations, a court
should assume their veracity ...