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Alami v. Lincoln Property Co.

United States District Court, E.D. Virginia, Alexandria Division

November 24, 2014

FOUAD ALAMI, et al., Plaintiff,
v.
LINCOLN PROPERTY COMPANY, et al., Defendants

Page 552

For Fouad Alami, Cynthia Alami, Plaintiffs: John Leon Marquardt, Jr., LEAD ATTORNEY, Marquardt Law, Washington, DC.

For Lincoln Property Company, Defendant: Christopher Allan Glaser, LEAD ATTORNEY, Jackson & Campbell PC (DC), Washington, DC.

For Pembroke Real Estate, Inc., 1201-1225 New York Avenue SPE LLC, Defendants: Christopher Allan Glaser, LEAD ATTORNEY, Mitchell B. Weitzman, Jackson & Campbell PC (DC), Washington, DC.

For LPC Commercial Services, Inc., Intervenor: Christopher Allan Glaser, LEAD ATTORNEY, Jackson & Campbell PC (DC), Washington, DC.

Page 553

MEMORANDUM OPINION AND ORDER

Gerald Bruce Lee, United States District Judge.

THIS MATTER is before the Court on Defendants Pembroke Real Estate, Inc. (" Pembroke" ) and 1201-1225 New York Avenue SPE, LLC's (" SPE" ; " landlord" ) Motion to Dismiss the First Amended Complaint (" Motion to Dismiss" ) (Doc. 11) and Defendants LPC Commercial Services, Inc. (" LPCCSI" ) and Lincoln Property Company's (" Lincoln" ) Motion to Dismiss the First Amended Complaint (" Motion to Dismiss" ) (Doc. 17) (collectively " Defendants" ; " Motions to Dismiss" ).[1] This case arises from Defendants'

Page 554

alleged failure to timely complete the " buildout" of the Alamis' business located at 1201 New York Avenue NW, Washington, D.C.[2] The first issue is whether the Court should grant Pembroke and SPE's Motion to Dismiss. The second issue is whether the Court should grant LPCCSI and Lincoln's Motion to Dismiss.

The Court GRANTS Defendants' Motions to Dismiss for four reasons. First, the Plaintiffs' breach of Work Agreement claim must be dismissed because the language of the Lease bars any delay in buildout claims. Second, the Plaintiffs' negligence claim must be dismissed because District of Columbia law precludes recovery for negligence claims based on a breach of contract under the economic loss doctrine. Third, the Plaintiffs' promissory estoppel claim must be dismissed because it is insufficiently plead. Fourth, the Complaint must be dismissed because this Court should abstain from exercising jurisdiction and defer the claims to an ongoing state court proceeding. Additionally, the Court also GRANTS Pembroke and SPE's Motion to Dismiss Plaintiffs' claims because Pembroke cannot be personally liable as a disclosed agent.

I. BACKGROUND

Plaintiffs Fouad and Cynthia Alami (" the Alamis" ) are owners and operators of a District of Columbia shoe repair and dry cleaning business. (Doc. 3 ¶ 10.) The Alamis are Virginia citizens. ( Id. ¶ 1.) The Alamis opened " 12th and G Street Cleaners and Shoe Repair" in June 2003. ( Id. ¶ 10.) In March 2012, the Alamis were told that they must vacate their location by December 31, 2012. ( Id. ¶ 13.) The Alamis found a new location for their business at 1201 New York Avenue NW, and on August 1, 2012, entered into a five year Retail Lease Agreement (" Lease" ; Doc. 3-5 at 2) with Defendant SPE to rent space therein (" the Premises" ). SPE is a Delaware corporation headquartered in Washington, D.C., and served as the Alamis' landlord. (Doc. 3 ¶ 4.) The lease term was set to commence on January 1, 2013, subject to Section 3(a) of the Lease, which defines " Commencement Date." (Doc. 3-5 at 2.)

Although the Lease contemplates a separate Work Agreement, no such document was ever executed. (Doc. 3 ¶ 17.) However, the Alamis contend that a Work Agreement " arose between the Alamis, Pembroke, SPE and Lincoln through the communications between these parties and their agents following the execution of the Lease." ( Id.) The Alamis further contend that " [t]he 'punch list,' in turn, likewise so-arose and, per the Lease, was to be executed 'in accordance with the terms of the Work Agreement,' not the Lease itself." ( Id.)

On October 4, 2012, the Alamis provided Lincoln with their security deposit and first month's rent. ( Id. ¶ 19.) The Lease was not executed until November 7, 2012. ( Id. ¶ 20.) The Lease was signed by Pembroke Senior Vice President David Lucey. ( Id.) During this time the Alamis still

Page 555

thought the work would be completed in time for their January 1, 2013 move-in date. ( Id. 120.)

On December 26, 2012, Mrs. Alami emailed Lincoln project manager Bob Knopf stating that " [they] are scheduled to move this Saturday, 12/29," and inquiring whether " the space [will] be ready?" ( Id. ¶ 27.) The Alamis received no response from Mr. Knopf for several days and moved in on December 31, 2012. ( Id. at ¶ 28.) Upon moving in, the Alamis discovered several problems: (1) it appeared that construction had recently started as the entire space " had the look of a construction site" ; (2) there was no dedicated plug for their shoe repair machine; and (3) the new store front door was not installed. ( Id. ¶ 29.) That same morning, Mr. Knopf replied to the Alamis' December 26th email, stating that " [w]e are still a few weeks out for the store front to be installed" and that they had not " received our full permitted drawings from the architect in order to obtain our permits." ( Id. ¶ 29.) Mr. Knopf promised to update the Alamis when he had " some dates." ( Id.)

The Alamis opened their shop for business on January 2, 2013. ( Id. ¶ 30.) On January 8, 2013, the Alamis learned that (1) Lincoln still did not have a permit to do work on " the exterior and close up the interior walls" --Lincoln anticipated obtaining this permit by the end of January; and (2) the store front installation would not be complete until late February 2013. ( Id. ¶ 36.) Lincoln acquired the building permit in early February; however, the Alamis still could not obtain a certificate of occupancy from the District of Columbia government until a final inspection was done on the construction. ( Id. ¶ ¶ 41-42.) Construction did not begin until mid-March and the Alamis did not receive a certificate of occupancy until April 15, 2013. ( Id. 146.) " [A]s late as May 9, 2013, carpeting remained incomplete, damage to the wall remained, and painting had yet to be done." ( Id. ¶ 47.)

The Alamis allege that the resultant effect of the construction delays on their business was " substantial." ( Id. ¶ 48.) " Customers complained both about having to go into the interior of the building just to drop things off and about the general conditions of the store." ( Id.) They claim that monthly revenue at the new location was fifty percent less than what it was at their former location. ( Id. ¶ 50.) The Alamis were barely meeting their expenses. ( Id.) As a result of the sharp decline in revenue and profitability, in August 2013 the Alamis decided to close the business. ( Id. ¶ ¶ 50-51.)

The Alamis filed their Amended Complaint on August 8, 2014, asserting claims of negligence, promissory estoppel, and breach of the Work Agreement. Defendants' ...


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