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LLC v. Neal

United States District Court, D. Maryland, Southern Division

March 8, 2017

5050 TUXEDO, LLC, Plaintiff,
v.
STEPHEN W. NEAL, Defendant.

          MEMORANDUM OPINION

          GEORGE J. HAZEL, UNITED STATES DISTRICT JUDGE

         Plaintiff 5050 Tuxedo. LLC. brings this case against Defendant Stephen W. Neal. seeking to enforce a statutory right to redeem real property seized by the Internal Revenue Service ("IRS") and subsequently sold to Defendant at a public tax sale. ECF No. 1. Pending before the Court are the following motions: Defendant's Motion to Dismiss, or in the Alternative, for Summary Judgment. ECF No. 6; Defendant's Motion to Strike Plaintiffs Response in Opposition to Defendant's Motion to Dismiss, or in the Alternative, for Summary Judgment. ECF No. 8: and Defendant's Motion to Strike Tyrone Pate's Affidavit, ECF No. 10. These issues have been lull[1] briefed and a hearing is unnecessary. Loc. R. 105.6 (D. Wd, 2016). For the reasons staled below, the Court will convert Defendant's Motion to Dismiss into a Motion for Summary Judgment and grant it in full. Furthermore, the Court will grant Defendant's Motion to Strike Plaintiffs Response in Opposition and will deny as moot Defendant's Motion to Strike Tyrone Pate's Affidavit.

         I. BACKGROUND[2]

         Plaintiff seeks ownership of real property, presently in the Defendant's possession. located at 5050 Tuxedo Road. Hyattsville. Maryland 20781 ("the Property"). ECF No. 1 ¶ 51. The Property was previously owned by Wamo Welding. Inc. ("Wamo"). Id.[3] 11. Because Wamo failed to pay state and federal taxes, the Property was subject to several tax liens, Id. ¶ 12. Pursuant to its authority under 26 U.S.C. § 6331(a)-(b). the IRS provided notice of its intent to seize and sell the Property to collect sufficient funds to re-coup the unpaid federal taxes. Id. *' 13. The IRS held a sale of the Property on October 21. 2015. ECF No. 6-4 at 2; ECF No. 6-5 at 2? Defendant was the successful bidder and was issued a "Certificate of Sale of Seized Property" from the IRS. ECF No. 1 ¶ 15.

         Prior to the tax sale, on October 2. 2015. Wamo and Winston Marshall[4] executed a "Commercial Contract of Sale" with Plaintiff, to provide Plaintiff with an assignment and interest in the Property sufficient to redeem the Property pursuant to federal law. Id. ¶¶ 9-10. On October 24. 2015, a few days after the public auction. Plaintiff entered into an agreement to lease the Property to Mr. Marshall. Id. ¶ 16.

         According to the Complaint, the IRS identified April 18. 2016 as the final date to redeem the Property, but "the parties" agreed to extend the time for redemption beyond this deadline to allow Plaintiff to "close the transaction." Id. ¶¶ 18-19. Specifically. Plaintiff alleges that on April 18. 2016. David Carris. Esq.[5] presumably on behalf of the Plaintiff, emailed Defendant. requesting instructions for where to wire money in order to redeem the Property. Id. ¶ 20. Defendant forwarded the email to his employee, Sharon Neal. who provided the hank and wiring information to Plaintiff at 5:27 p.m. that same day. Id. ¶ 22. On the following day. April 19. 2016, Plaintiff paid Defendant $244, 145.74. which the IRS had determined was the amount needed to redeem the property, Id. ¶ 23. However. Defendant rejected Plaintiffs attempt to redeem the property and returned the transferred funds stating that Plaintiffs attempted redemption occurred after the 180-day statutory redemption period had expired. Id. ¶ 25.

         Plaintiff initiated this case on June 3. 2016. claiming that Defendant's refusal to accept its redemption breached their agreement to extend the statutory redemption period, and thus. violated its right to redeem the property pursuant to 26 U.S.C. § 6337. Id. % 39. In addition to requesting damages for their breach of contract claim. Plaintiff alternatively argues that it has "no adequate remedy at law." and requests that the Court specifically enforce the contract and order Defendant to transfer title and possession of the Property to Plaintiff. Id. ¶ 40. Plaintiff also brings a state law claim for quiet title, alleging that its claim is superior to that of Defendant and requesting that the Court declare Plaintiff the "absolute owner* of the Property. Id. ¶¶ 49-51.

         On June 29. 2016. Defendant filed a Motion to Dismiss, or in the Alternative, for Summary Judgment. ECF No. 6-1 at 19-28. Plaintiff responded on August 1. 2016. ECF No. 7. and Defendant promptly filed a Motion to Strike Plaintiffs Response as untimely. ECF No. 8. On August 1 8. 2016. Defendant filed a Motion to Strike the affidavit of Tyrone Pate, which had been submitted by Plaintiff with its Response. ECF No. 10. That same day. Defendant also submitted a Reply in Support of its Motion to Dismiss, or in the Alternative, for Summary Judgment. ECF No. 11.

         II. STANDARD OF REVIEW

         To survive a motion to dismiss invoking 12(b)(6). "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) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544. 570 (2007)). "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. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. (citing Twombly, 550 U.S. at 555) ("a plaintiffs obligation to provide the 'grounds' of his 'entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of a cause of action's elements will not do.").

         Fed. R. Civ. P. 12(b)(6)"s purpose "is to test the sufficiency of a complaint and not to resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Presley v. City of Charlottesville, 464 F.3d 480. 483 (4th Cir. 2006) (citation and internal quotation marks omitted). When deciding a motion to dismiss under Rule 12(b)(6). a court "must accept as true all of the factual allegations contained in the complaint." and must "draw all reasonable inferences [from those facts] in favor of the plaintiff." E. 1. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435. 440 (4th Cir. 2011) (citations and internal quotation marks omitted). The Court need not, however, accept unsupported legal allegations, see Reverie v. Charles County Comrn 'rs. 882 F.2d 870. 873 (4th Cir. 1989). legal conclusions couched as factual allegations. Papasan v. Attain, 478 U.S. 265. 286 (1986). or conclusory factual allegations devoid of any reference to actual events. United Black Firefighters of Norfolk v. Hirst. 604 F.2d 844. 847 (4th Cir. 1979).

         Defendant's motion is styled as a Motion to Dismiss, or in the Alternative, for Summary Judgment under Fed.R.Civ.P. 56. If the Court considers materials outside the pleadings, as the Court does here, the Court must treat a motion to dismiss as one for summary judgment. Fed.R.Civ.P. 12(d). When the Court treats a motion to dismiss as a motion for summary judgment. "[a]ll parties must be given a reasonable opportunity to present all the material that is pertinent to the motion." Id. When the moving party styles its motion as a "Motion to Dismiss, or in the Alternative, for Summary Judgment." as is the case here, and attaches additional materials to its motion, the nonmoving party is, of course, aware that materials outside the pleadings are before the Court, and the Court can treat the motion as one for summary judgment. See Laughlin v. Metropolitan Wash. Airports Auth., 149 F.3d 253, 260-61 (4th Cir. 1998). Further, the Court is not prohibited from granting a motion for summary judgment before the commencement of discovery. See Fed. R. Civ. P. 56(a) (stating that the court "shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact" without distinguishing pre-or post-discovery).

         However, summary judgment should not be granted if the nonmoving party has not had the opportunity to discover information that is essential to his opposition to the motion. Anderson v. Liberty Lobby. Inc.. 477 U.S. 242. 250 n.5. (1987). If the nonmoving party feels that the motion is premature, that party can invoke Fed. R. Civ. Pro. 56(d). See Celotex Corp. v. Catrett. 477 U.S. 317. 326 (1986). Under Rule 56(d). the Court may deny a motion for summary judgment if the non-movant shows through an affidavit that, for specified reasons, he or she cannot properly present facts, currently unavailable to him or her. that are essential to justify an opposition. Fed. R. Civ. Pro. 56(d). ""[T]he failure to file an affidavit... is itself sufficient grounds to reject a claim that the opportunity for discovery was inadequate."" Harrods Lid. v. Sixty Internet Domain Names, 302 F.3d 214, 244 (4th Cir. 2002) (citations omitted). But a failure to file an affidavit may be excused "if the nonmoving party has adequately informed the district court that the motion is premature and that more discovery is necessary" and the ""nonmoving party's objections before the district court served as the functional equivalent of an affidavit." Id. at 244-45 (citations and internal quotation marks omitted).

         Here. Plaintiff has not filed an affidavit under Rule 56(d) or made an equivalent showing of the need for more discovery. Thus, the Court will convert Defendant's Motion to Dismiss into a Motion for Summary Judgment.

         Summary judgment is appropriate if "materials in the record, including depositions. documents, electronically stored information, affidavits or declarations, stipulations .... admissions, interrogatory answers, or other materials." Fed.R.Civ.P. 56(c). show that there is "no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); see also Celolex Corp.. 477 U.S. at 322. The party moving for summary judgment bears the burden of demonstrating that no genuine dispute exists as to material facts. Pulliam Inv. Co. v. Cameo Props.,810 F.2d 1282. 1286 (4th Cir. 1987). If the moving party demonstrates that there is no evidence to support the nonmoving party's case, the burden shifts to the nonmoving party to identify specific facts showing that there is a genuine issue for trial. See Celolex, 477 U.S. at 322-23. A material fact is one that "might affect the outcome of the suit under the governing law." Spriggs v. Diamond Auto Glass.242 F.3d 179. 183 (4th Cir. 2001) (quoting Anderson v. Liberty Lobby. Inc.,477 U.S. 242. 248 (1986)). A dispute of material fact is only "genuine" If sufficient evidence favoring the nonmoving party exists for the trier ...


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