United States District Court, E.D. Virginia, Alexandria Division
Leonie M. Brinkema United Stales District Judge
On January 13, 2016, plaintiff, acting pro se, filed a complaint in the Circuit Court of Fairfax County to enforce a mechanic's lien that plaintiff had filed against a five-acre property located at 12792 Yates Ford Road, Clifton, Virginia ("the Property") on April 26.2013 and had refiled on October 13, 2015. See Compl. [Dkt. No. 1-1] ¶¶ 6-10. Plaintiff named multiple defendants in his complaint, including JPMorgan Chase & Co., which defendants state should be correctly identified as JPMorgan Chase Bank, N.A. ("Chase"); Jamie Dimon, personally and as a Director; Linda B. Bammann, personally and as a Director; James A. Bell, personally and as a Director; Crandall C. Bowles, personally and as a Director; Stephen B. Burke, personally and as a Director; James S. Crown, personally and as a Director; Timothy P. Flynn, personally and as a Director; Laban P. Jackson, Jr., personally and as a director; Michael A. Neal, personally and as a director; Lee R. Raymond, personally and as a Director; and William C. Weldon, personally and as a Director (collectively, "defendants").
Defendants, all of whom are diverse from plaintiff, a Virginia resident, removed the complaint to this court and filed a motion to dismiss. Notice of Removal [Dkt. No. 1], Feb. 4, 2016; Defs.' Mot. to Dismiss Pl'.s Compl. to Enforce Mechanic's Lien [Dkt. No. 3], Feb. 9, 2016. Responding to defendants' motion to dismiss, plaintiff filed an 82-page amended complaint as well as an opposition to the motion to dismiss. Am. Compl. [Dkt. No. 7], Feb. 24, 2016; Pl'.s Mem. in Supp. of Opp'n to Defs Mot. to Dismiss [Dkt. No. 9] ("Pl'.s Opp'n"), Feb. 24, 2016. Defendants withdrew their original motion to dismiss, Notice [Dkt. No. 10], Mar. 1, 2016, and filed a new motion to dismiss plaintiffs amended complaint. Defs.' Mot. to Dismiss Pl'.s Am. Compl. [Dkt. No. 19], Mar. 11, 2016.
The essence of plaintiff s claim as expressed in both his original and amended complaints is that from 2007 through 2015 he performed various work worth $195, 000 on the Property, which was owned by James High III and Ann High. Compl. ¶¶ 7-8; Compl. at 7; Am. Compl. ¶¶103-105. By inference, he appears to allege that the Highs did not pay for his services, which led him to file the first mechanic's Hen on the Property on April 26, 2013. It also appears that by 2013 the Highs were having problems paying the mortgage on the Property. See Pl'.s Ex. 5 [Dkt. No. 9-7], Combined Emergency Mot. for TRO or Prelim. Inj., Mot. to Stay Sale, & Mot. to Allow Counterclaim. The Property went into foreclosure proceedings in 2015 and defendant Chase eventually purchased the Property for $1.4 million. Compl. ¶13; Defs.' Ex. 1 [Dkt. No. 20-1], Deed of Foreclosure. Plaintiff claims that defendants failed to provide him with proper notice of the foreclosure, Compl. ¶¶ 13-14; Am. Compl. ¶¶ 46-47, and in his lawsuit he seeks $195, 000 based on the mechanic's lien, with interest running from May 5, 2013, the date on which he believes his first lien was recorded. Compl. at 7.
In plaintiffs amended complaint he attempts to also raise a claim under the Racketeer Influenced and Corrupt Organizations Act ("RICO") against defendants, alleging that Chase has been fined $30 billion as a result of various federal agencies' actions and that defendants have engaged in a pattern of racketeering to defraud him out of the $195, 000 he is owed for maintaining and improving the Property. See Am. Compl. ¶¶ 6-7. As a result, he is "claiming . .. partial ownership of the property." Id. ¶ 7.
In their motions to dismiss plaintiffs original and amended complaints, defendants raise multiple meritorious grounds for dismissal pursuant to Federal Rule of Civil Procedure 12(b), including lack of personal jurisdiction under Rule 12(b)(2), insufficient process under Rule 12(b)(4). insufficient service of process under Rule 12(b)(5), and "failure to state a claim upon which relief can be granted" under Rule 12(b)(6). Defs.' Mem. in Supp. of Their Mot. to Dismiss Pl'.s Am. Compl. [Dkt. No. 20] ("Defs.1 Br. 2") at 1-3, Mar. 11, 2016; Defs.' Mem. in Supp. of Their Mot. to Dismiss Pl'.s Compl. to Enforce Mechanics [sic] Lien [Dkt. No. 4] ("Defs.' Br. 1") at 1-2, Feb. 9, 2016. Pursuant to Federal Rule 12(0, defendants also move to strike a number of plaintiffs exhibits and any claim he raises related to the U.S. Department of Justice's "Petite Policy." Defs.' Br. 2 at 3; see also Am. Compl. ¶ 8 (alleging that the Petite Policy should apply but stating that "Petite is not the Plaintiffs [sic] right but the right of [sic] DOJ/Courf'). Neither plaintiffs amended complaint nor his memorandum opposing the first motion to dismiss allege any facts or make any arguments that properly respond to the dispositive issues raised in defendants' motions. Because defendants' Rule 12(b)(6) argument is the most substantial and is determinative of this action, it is the only one the Court needs to address.
A court addressing a Rule 12(b)(6) motion must dismiss a complaint if it fails "to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). "To survive a motion to dismiss, a complaint must set forth sufficient factual matter, accepted as true, to 'state a claim for relief that is plausible on its face, "' Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 547 (2007)). In assessing the plausibility of a claim, a court must take the plaintiffs alleged facts to be true and must draw all reasonable inferences in the plaintiffs favor; however, the allegations must be more than "unadorned, the-defendant-unlawfully-harmed-me accusation[s]." Id. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice, "
id., nor do "naked assertions devoid of further factual enhancement." Twombly, 550 U.S. at 557. If "the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not 'show[n]' 'that the pleader is entitled to relief.'" Iqbal, 556 U.S. at 679 (quoting Fed.R.Civ.P. 8(a)(2)).
Defendants correctly argue that they were under no obligation to notify plaintiff about the foreclosure sale and have no liability for the $195, 000 because plaintiff never had a valid mechanic's lien on the Property. Although, as defendants recognize, persons who perform labor or furnish at least $150 in materials for the construction, removal, repair or improvement of any permanently annexed building or structure may have a lien on that building or structure, Va. Code. Ann. § 43-3(A), there are strict statutory requirements that must be followed to obtain a perfected and enforceable lien. See Carolina Builders Corp. v. Cenit Equity Co., 512 S.E.2d 550, 552 (Va. 1999) ("This Court has repeatedly stated that a mechanic's lien is in derogation of the common law and that the statutes dealing with the existence and perfection of a mechanic's lien must, therefore, be strictly construed."). For example, the types of structures and materials that are "deemed permanently annexed to [a] freehold" are defined by statute,  and the term "improvement" as used by Va. Code Ann. § 43-3(A) has been interpreted to mean that "materials need not be fixed and irremovable...[but] some greater connection to the building or structure is necessary in order to sustain a mechanics' lien" and therefore "it is not sufficient for materials to simply add value to a building by their mere presence without any further connection to the building." See Summit Cmty. Bank v. Blue Ridge Shadows Hotel & Conference Ctr., LLC, 428 B.R. 231, 233-34 (W.D. Va. 2010).
Defendants contend that the types of work listed in plaintiffs lien memoranda do not constitute construction, removal, repair, or improvement of any permanently annexed structure or building and therefore do not provide the basis for a mechanic's lien. Defendants are correct that much of plaintiff s claimed labor and materials, such as "grass, shrub, flower care, " "weed killer." "tree removal/cutting, " and "general property cleanup, " Am. Compl., Pl'.s Ex. 2 [Dkt. No. 7-3], Pl'.s Liens ("Pl'.s Ex. 2"), do not appear to fall within the category of lienable items, and plaintiffs descriptions as a whole are too vague to determine whether any of the listed items are lienable. Even presuming that some of plaintiff s requested labor and material costs could support a mechanic's lien, his 2013 and 2015 liens are nonetheless defective.
Among the many other defects defendants discuss in their motions to dismiss is the requirement that a lien claimant file his memorandum of lien no later than 90 days from the last day of the month in which he last performed labor on the building or structure or supplied the materials at issue or "in no event later than 90 days from the lime" the building or structure or work on the building or structure is completed. Va. Code Ann. § 43-4; see also Smith Mountain Bide. Supply. LLC v. Windstar Properties, LLC, 672 S.E.2d 845, 847 (Va. 2009) (confirming that the requirements under § 43-4 are "statutory prerequisites['] to perfect a mechanic's lien"). Although a lien may include an unlimited number of memoranda, any memorandum filed is limited to seeking "sums due for labor or materials furnished" within 150 days of the last day on which the lien-holder performed labor or furnished materials. Va. Code Ann. § 43-4. Plaintiff fails in both his 2013 and 2015 lien memoranda to make clear the dates of the work he purportedly performed or the dates on which he furnished materials. See Pl'.s Ex. 2. This omission renders both liens deficient on their face, as there is no way to verify that the memoranda were filed no later than 90 days from when plaintiff completed his work on the Property or furnished materials for that work.
Moreover, even if the 2013 lien had been filed within the 90-day timeframe and was therefore properly perfected, it is unenforceable because under Virginia law a lien holder may not bring a suit to enforce a perfected lien if more than six months have elapsed since the time that the lien holder recorded the lien memorandum or if more than sixty days have passed from the time the building or structure was completed, whichever is later. See Va. Code Ann. § 43-17. The record clearly shows that plaintiff did not seek to enforce the 2013 lien within the six months after recording the lien. In fact, plaintiffs first and only attempt to enforce the 2013 lien was on January 13, 2016, when he filed this civil action. Plaintiffs suit is therefore untimely with respect to his 2013 lien.
Defendants further argue that plaintiff is judicially estopped from claiming that he is owed $195, 000 because he foiled to list the 2013 lien as an asset on his Chapter 7 bankruptcy petition, which was filed on September 18, 2013, nearly five months after he filed his first mechanic's lien on April 26, 2013. See Defs.' Br. 2, Ex. B [Dkt. No. 20-2], Voluntary Pet. ("Bankr. Pet."). The doctrine of judicial estoppel bars "a party from adopting a position that is inconsistent with a stance taken in prior litigation, " and serves to "prevent a party 'from playing 'fast and loose' with the courts, " while "'protecting] the essential integrity of the judicial process.'" John S. Clark Co. v. Faggert & Frieden. P.C, 65 F.3d 26, 28-29 (4th Cir. 1995) (quoting Allen v. Zurich Ins. Co., 667 F.2d 1162, 1166 (4th Cir. 1982)). To determine if judicial estoppel applies to a party's position, a court should consider whether the party "'intentionally misled the court to gain unfair advantage'" or whether its "prior position was based on inadvertence or mistake." Id. at 29 (quoting Tenneco Chemicals v. William Burnett & Co., 691 F.2d 658, 665 (4th Cir. 1982)).
Here, plaintiff had an obligation "to disclose to the bankruptcy court all of the assets to which creditors could post a claim, and 'the importance of full and honest disclosure cannot be overstated/" RTC Morte. Trust 1995-S/N2 v. McMahon, 225 B.R. 604, 608-09 (E.D. Va. 1997) (quoting Ryan Operations G.P. v. Santiam-Midwest Lumber Co., 81 F.3d 355, 362 (3d Cir. 1996)). Plaintiff, who was represented by counsel in his Chapter 7 proceeding, did not disclose the 2013 mechanic's lien or any claims against the Property and the Highs as an asset, see Bankr. Pet. at 9-11, 27,  and there is no indication that this omission was the product of "inadvertence or mistake, " particularly because plaintiff had filed his mechanic's lien memorandum just five months before filing his voluntary petition. He did not file for bankruptcy and later discover what he believes to be a right to a mechanic's lien; rather, he had asserted rights to such a lien for months before filing for bankruptcy. To permit plaintiff now to recover on a lien that was not listed as an asset in bankruptcy would allow plaintiff to gain an "unfair advantage" by misleading the bankruptcy court.
Furthermore, it is obvious that the 2015 mechanic's lien is a duplicate of the 2013 lien and that the 2015 lien is therefore untimely as well. The lien memoranda are indistinguishable other than the date on which they were signed by plaintiff. See Pl'.s Ex. 2. Additionally, plaintiff admits in his amended complaint that "a Mechanics [sic] Lien was filed twice in ...