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Green v. Jenkins Services, LLC

United States District Court, D. Maryland

April 10, 2017

JENKINS SERVICES, LLC, et al., Defendants


          Paul W. Grimm United States District Judge.

         In January 2014, a fire completely destroyed Plaintiffs Mark and Marcia Green's (“the Greens”) house. Fortunately, Marcia Green's USAA Casualty Insurance Company (“USAA”) homeowners-insurance policy covered the couple's losses, but disagreements over a portion of the Greens' insurance payout resulted in this litigation. At USAA's urging, the Greens entered an agreement and a purported contract with Defendant Jenkins Services, LLC (“Jenkins”) for their insurance proceeds to fund restoration of the damaged property. USAA issued a check for $127, 437.48, which named Jenkins, Marcia Green, and her father, Mark Green's predecessor in interest, as payees. According to Jenkins, the Greens endorsed the check, which the LLC deposited in its bank account. After Jenkins razed the damaged structures on the property and performed other preparatory work, the Maryland State Department of Health and Mental Hygiene and State Department of Assessments and Taxation determined that the property could not sustain an on-site sewage disposal system, making reconstruction impossible. Nevertheless, Jenkins retained the money it had already collected. The Greens seek to recover that money from Jenkins, alleging that a Jenkins employee forged their signatures on the check and, in any event, that they are entitled to the money under either breach-of-contract or unjust-enrichment theories. Jenkins disputes the forgery allegations and argues that it is entitled to the money to cover the cost of work it has already performed. Pending now is Jenkins's Motion for Judgment on the Pleadings. Def.'s Mot., ECF No. 31. Jenkins filed a Memorandum in support of its Motion, Def.'s Mem., ECF No. 31-2, and the Greens filed an Opposition, Pls.' Opp'n, ECF No. 54, but Jenkins never filed a Reply. No hearing is necessary. Loc. R. 105.6 (D. Md.). Because I find that the Greens have stated claims against Jenkins, I will deny the Motion.


         On January 15, 2014, a fire destroyed the Greens' home at 16631 Gardner Road in Waldorf, Maryland, rendering the dwelling uninhabitable. Am. Compl. ¶¶ 31-32, ECF No. 29. Prior to the fire, the property had been co-owned by Elijah Girven, Jr. and his daughter, Marcia Green. Am. Compl. ¶¶ 1-2, 4. After Girven's death, Marcia's spouse, Mark Green, acquired his father-in-law's interest in the property. Id. ¶ 5.

         Marcia Green owned a homeowners-insurance policy through USAA. It insured the property and the buildings and personal property on it. Id. ¶¶ 28-30, 34; USAA Homeowners Policy, Am. Compl. Ex. 5, ECF No. 29-7. The Greens filed a claim with USAA, and the insurance company acknowledged that their claim was covered by the policy. Id. ¶ 35. USAA recommended that the Greens use Jenkins, one of its preferred contractors, to restore or reconstruct the damaged home. Id. ¶ 36. Wells Fargo Bank NA (“Wells Fargo”), which holds a mortgage on the Greens' property, agreed to hold the insurance proceeds in a restricted escrow account to be used for restoration or reconstruction or to reduce the couple's debt to the bank. Id. ¶¶ 8, 40-43. Subsequently, USAA made several insurance payments to the escrow account and to the Greens. Id. ¶¶ 44-45. These payments included a check for $127, 437.38, which named Jenkins, Marcia Green, and Elijah Girven, but not Mark Green, as payees. Id. ¶¶ 81-82; Check, Am. Compl. Ex. 11, ECF No. 29-17. The Greens allege that an unknown employee at Jenkins forged their signatures on the back of the check, endorsing it over to Jenkins. Id. ¶ 89.

         On February 2, 2014, the Greens signed an agreement with Jenkins, which authorized the contractor to make “necessary repairs to [the] property” and USAA “to name Jenkins Restorations along with [the insureds] on all drafts issued in regard to the insurance claim.” Id. ¶ 37, Authorization for Work: Repair Agreement & Assignment of Insurance Benefits, Am. Compl. Ex. 7, ECF No. 29-9 [hereinafter Authorization]. Although the Authorization mentions only “repairs” to the property, the Greens maintain that they intended all along for Jenkins to raze the damaged structures and construct a new house. Am. Compl. ¶ 129. They also allege that Mark Green informed Jenkins that the company would have to perform a percolation (“perc”) test on the property before beginning construction work in order to determine whether the property could continue to support a septic system. Id. ¶ 130. A handwritten note appears on the Authorization with the words “septic” and “well” under the heading “P.G. County, ” a common shorthand for Prince George's County, Maryland. Am. Compl. ¶ 133; Authorization, Am. Compl. Ex. 7. The Greens allege that they signed the Authorization after Jenkins's agent, Bob Hoffman, informed Mark Green that a perc test was not necessary. Am. Compl. ¶ 131. On March 12, 2014, the Greens signed a Construction Contract with Jenkins that authorized the company to “perform . . . the scope of the work . . . in accordance with specifications set forth” in documents purportedly attached to the document for a contract price of $581, 222.90 (subject to additions and deductions) and charging Jenkins with responsibility for “comply[ing] with applicable building codes and with all local requirements for building permits, inspections and zoning.” Contract ¶¶ 2, 5, Am. Compl. Ex. 8A, ECF No. 29-11; see also Am. Compl. ¶¶ 146, 148. The Greens contend that Jenkins never prepared a description of the scope of the work that it was to perform. Am. Compl. ¶ 154. The Contract stated that work would commence approximately on June 1, 2014, and would be substantially completed by January 15, 2015. Id. ¶ 149; Contract ¶ 4. It also set forth a progress payment schedule with an initial payment of $131, 8762.19 due upon execution of the Contract. Contract ¶ 6. In addition, the Contract assigned the Greens' insurance proceeds to Jenkins, authorizing “direct payment of any such proceeds to Jenkins Restorations” and obligating the Greens to endorse any payments made to them by USAA over to Jenkins. Id. ¶ 7. Both Jenkins and the Greens contractually agreed to waive their right to recover “consequential damages arising out of the Contract.” Id. ¶ 9.

         Jenkins did not apply for a perc test with the Prince George's County Health Department until March 19, 2015, Am. Compl. ¶ 150; Percolation Test Application, Am. Compl. Ex. 15, ECF No. 29-21, and the Department administered the test on May 7, 2015, Am. Comp. ¶150; Percolation Test Report, Am. Compl. Ex. 16A, ECF No. 29-22. Based on the perc test, the Maryland State Department of Health and Mental Hygiene and State Department of Assessments and Taxation determined that the Greens' property was “unsuitable to support an on-site sewage disposal system, ” rendering the property off limits to development “until public sewerage facilities are made available.” Letter from Manfred Reichwein, Chief, Envtl. Eng'g/Policy Program, Prince George's Cty., to Daniel Puma, Supervisor, Md. State Dep't of Assessments & Taxation (June 9, 2015), Am. Compl. Ex. 17, ECF No. 29-24; see also Am. Compl. ¶¶ 150, 163-64. Despite being unable to go forward with the construction, Jenkins kept the $127, 437.38 to cover its costs associated with razing the damaged house and conducting preparatory work for the new construction. Am. Compl. ¶¶ 172, 182-83.

         The Greens filed a Complaint in the Circuit Court for Prince George's County against Jenkins, its unknown employee who allegedly forged the couple's signatures, and the company's bank, TD Bank, as well as Wells Fargo and USAA. Compl., ECF No. 2. With the other Defendants' consent, Wells Fargo removed the case to this Court, Notice of Removal, ECF No. 1.[1] The Greens voluntarily dismissed TD Bank from the case, ECF No. 72, and reached a settlement with Wells Fargo and USAA, ECF No. 74. The remaining claims against Jenkins include fraud (Count I);[2] conversion and misappropriation; (Count II), conversion of a negotiable instrument (Count IX), breach of contract (Count XI), and money had and received (Count XII). Am. Compl. ¶¶ 216-33, 265-69, 281-303. Jenkins filed an Answer to the Amended Complaint, ECF No. 30, along with the pending Motion.

         Standard of Review

         Courts apply “the same standard for Rule 12(c) motions [for judgment on the pleadings] as for motions made pursuant to Rule 12(b)(6), ” alleging failure to state a claim. Burbach Broadcasting Co. of Del. v. Elkins Radio Corp., 278 F.3d 401, 406 (4th Cir. 2002). That rule'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.” Id. (quoting Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006)). To that end, the Court bears in mind the requirements of Fed.R.Civ.P. 8, Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), when considering a motion to dismiss pursuant to Rule 12(b)(6). Specifically, a complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief, ” Fed.R.Civ.P. 8(a)(2), and must state “a plausible claim for relief, ” as “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice, ” Iqbal, 556 U.S. at 678-79. See Velencia, 2012 WL 6562764, at *4 (discussing standard from Iqbal and Twombly). “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.

         Rule 9(b) states that “in alleging a fraud or mistake, a party must state with particularity the circumstances constituting the fraud or mistake.” Fed.R.Civ.P. 9(b). Such allegations [of fraud] typically “include the ‘time, place and contents of the false representation, as well as the identity of the person making the misrepresentation and what [was] obtained thereby.' ” Piotrowski v. Wells Fargo Bank, N.A., No. DKC-11-3758, 2013 WL 247549, at *5 (D. Md. Jan. 22, 2013) (quoting Superior Bank, F.S.B. v. Tandem Nat'l Mortg., Inc., 197 F.Supp.2d 298, 313-14 (D. Md. 2000)).

         When reviewing a motion for judgment on the pleadings, I “may consider documents attached to the complaint, as well as documents attached to the motion . . ., if they are integral to the complaint and their authenticity is not disputed.” Sposato v. First Mariner Bank, No. CCB-12-1569, 2013 WL 1308582, at *2 (D. Md. Mar. 28, 2013); see also CACI Int'l v. St. Paul Fire & Marine Ins. Co., 566 F.3d 150, 154 (4th Cir. 2009); Fed.R.Civ.P. 10(c) (“A copy of a written instrument that is an exhibit to a pleading is a part of the pleading for all purposes.”). Consideration of documents that the plaintiff references and relies upon does not convert a motion to dismiss into a motion for summary judgment. See Sec'y of State for Defence v. Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir. 2007). The Greens attached and make reference to numerous documents in their Amended Complaint. Accordingly, I will consider those documents in ruling on Jenkins's Motion.

         Choice of Law

          “In an action based upon diversity of citizenship, the relevant state law controls. The district court must apply the law of the forum state, including its choice of law rules.” Limbach Co. LLC v. Zurich Am. Ins. Co., 396 F.3d 358, 361 (4th Cir. 2005) (citing Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938)). The Greens' claims against Jenkins are common-law claims that sound in ...

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