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Jaggars v. Sandy Spring Bank

United States District Court, W.D. Virginia, Lynchburg Division

June 25, 2014



NORMAN K. MOON, District Judge.

This matter is before the Court upon consideration of the motion to dismiss filed by Defendant Sandy Spring Bank ("Defendant, " or "Sandy Spring"). Principally, I must decide whether the claim raised by Plaintiff Christopher Jaggars ("Plaintiff") under the Virginia Business Conspiracy statutes, Va. Code §§ 18.2-499 and 18.2-500, sufficiently pleads harm to a business interest, as opposed to a personal interest. As I determine that the complaint fails to do so, I will grant the motion to dismiss. However, I will dismiss the complaint without prejudice and grant Plaintiff leave to file an amended complaint.


A. Plaintiff's Allegations

In early 2008, Plaintiff and his wife, Ashley Jaggars, were approached by Suzanne Johnson regarding the DpFunder Program that she was promoting on behalf of Global Direct Sales, L.L.C. ("Global Direct"). Global Direct is a forfeited Maryland limited liability company owned by Ryan Hill, who also owns and operates Rycho Funding, L.L.C. ("Rycho"), also a Maryland limited liability company. Johnson marketed the DpFunder Program through her own limited liability company, LMFL Investments, L.L.C, and showed Plaintiff a PowerPoint presentation that sought to persuade him to sign a "DpFunder Residential Dealer Agreement, " pursuant to which Plaintiff would be paid sales commissions by Global Direct if he sold memberships with sham benefits to the "client associations" of Global Direct. Plaintiff declined to participate.

Thereafter, Johnson forged DpFunder forms, purchased 1510 Club Drive in Lynchburg, Virginia from Phillip Booth at a foreclosure sale for $194, 746, and then sold it to Plaintiff for $231, 234. Johnson obtained a loan for Plaintiff from Gateway Mortgage Group in the amount of $275, 000, which provided loan proceeds in excess of the purchase price. Prior to closing, Rycho falsely claimed, in a letter to the Settlement Agent, that Plaintiff owed Rycho a debt pursuant to a non-existent "Assignment of Funds." At closing, the Settlement Agent paid $49, 600 of the loan proceeds to Rycho.

Rycho paid to Global Direct the funds it received pursuant to the fraudulent "Assignment of Funds, " and Global Direct opened a savings account in Plaintiff's name at Sandy Spring without Plaintiff's knowledge or consent. Defendant bypassed its normal procedures and, in violation of the Patriot Act, allowed an account to be opened in Plaintiff's name without any verification and without obtaining his consent. On January 26, 2009, Global Direct issued a fraudulent Form 1099, falsely showing that it had paid $43, 500 in sales commissions to Plaintiff in 2008. The purpose of the form was allegedly to allow Global Direct to conceal the loan proceeds that it received from Rycho and to shift tax liability from Global Direct to Plaintiff, who suffered a personal tax liability of approximately $12, 021.

B. Procedural Background

On January 22, 2014, this action was filed in the Circuit Court of the City of Lynchburg. On April 21, 2014, Defendant filed a demurrer. After briefing on the demurrer, the Circuit Court granted Plaintiff's motion to amend the ad damnum clause of the complaint, adding a claim for $350, 000 in punitive damages, and on May 1, 2014, Defendant removed the case to this Court pursuant to 28 U.S.C. § 1441.


The appropriate pleading standard for considering a motion to dismiss for failure to state a claim upon which relief can be granted is that refined by Bell Atlantic v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009). See also Fed.R.Civ.P. 12(b)(6), Fed.R.Civ.P. 8. Plaintiffs must allege facts that "state a claim to relief that is plausible on its face, " i.e., facts that "have nudged their claims across the line from conceivable to plausible." Twombly, 550 U.S. at 570. A claim is plausible if the complaint contains "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged, " and if there is "more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 556 U.S. at 678. The following long-held rule still stands: "In evaluating a Rule 12(b)(6) motion to dismiss, a court accepts all well-pled facts as true and construes these facts in the light most favorable to the plaintiff in weighing the legal sufficiency of the complaint." Nemet Chevrolet, Ltd. v., Inc., 591 F.3d 250, 255 (4th Cir. 2009) (citations omitted).


To establish a claim for business conspiracy under Virginia Code §§ 18.2-499 and 18.2-500, the plaintiff must prove that there was:

(1) a combination of two or more persons; (2) for the purpose of willfully and maliciously injuring the plaintiff in reputation, trade, business or profession; ...

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