United States District Court, E.D. Virginia, Alexandria Division
JACOB ZUBERI, et al.. Plaintiffs,
DIANA HIREZI, et al., Defendants.
MEMORANDUM OPINION AND ORDER
Anthony J. Trenga United States district Judge
Jacob and Ashley Zuberi ("plaintiffs" or the
"Zuberis") claim that they were the victims of
fraudulent and other wrongful conduct when in July 2015 Jacob
Zuberi purchased an Alexandria, Virginia house from
Defendants Diana and Manuel Hirezi (the "Hirezis")
for $465, 000. Briefly summarized, plaintiffs allege that the
Hirezis concealed with cosmetic fixes serious structural
defects that make the house uninhabitable and unsellable.
Included as defendants in addition to the Hirezis are the
Hirezis' listing agent and his real estate company and
various contractors that the Hirezis hired to perform certain
agreed upon repair work identified during a pre-closing
their 64-page, 287-paragraph, twenty-eight-count Amended
Complaint, plaintiffs assert claims against the Hirezis for
fraud (Count I), fraudulent inducement (Count II),
constructive fraud (Count III), breach of contract (Count
IV), negligence per se (Counts V-VI), and violation of the
Virginia Consumer Protection Act (Count VII). It asserts
similar claims against Defendants Classic Realty, Ltd. and
George Greene (Counts VIII-XI), Defendant M&M Plumbing, LLC
(Counts XII-XVI), Defendant S. Unlimited, LLC (Counts
XVII-XXIII), and Defendant Advance Structural Concepts, LLC
(Counts XXIV-XXVII). Finally, plaintiffs have alleged a civil
conspiracy claim against all defendants (Count XXVIII).
pending are four motions to dismiss the Amended Complaint
(collectively, the "Motions"). Defendants Classic
Realty, Ltd. and George Greene [Doc. No. 51], S. Unlimited,
LLC [Doc. No. 54], and M&M Plumbing, LLC [Doc. No. 58] move
to dismiss the Amended Complaint in its entirety on the
grounds that it fails to state a claim against them. On the
same grounds, Defendants Diana and Manuel Hirezi move to
dismiss all counts against them except Count IV, alleging a
breach of contract [Doc. No. 61].
reasons stated below, (1) the motions filed by Defendants
Classic Realty, Ltd. and George Greene, S. Unlimited, and M&M
Plumbing, LLC are GRANTED and all claims against them will be
motion filed by Defendants Diana and Manuel Hirezi will be
GRANTED as to all claims filed by plaintiff Ashley Zuberi,
who lacks standing to bring any claims pertaining to the
purchase of the house; GRANTED as to Counts I, III, V, and VI
filed by Plaintiff Jacob Zuberi alleging fraud, constructive
fraud, and negligence per se; and otherwise DENIED, leaving
for further proceedings Jacob Zuberi's claims for
fraudulent inducement (Count II), breach of contract (Count
IV), violation of the Virginia Consumer Protection Act (Count
VII), and civil conspiracy (Count XXVIII).
following alleged facts are taken as true for the purposes of
November 2014, the Hirezis purchased the house located at
6024 Telegraph Road, Alexandria, Virginia for $385, 000 (the
'"Property")- Am. Compl. ¶ 13. The Hirezis
are in the business of "'flipping'
properties." Id. ¶ 3. During their
renovation of the Property, the Hirezis learned of structural
and related serious issues, which they masked with cosmetic
fixes in order to sell it. Id. ¶¶ 15-16.
Defendant George Greene ("Greene") was the listing
agent for the Property. Id. ¶ 21. Greene works
for Defendant Classic Realty Ltd. ("Classic
Realty"), and the Property listing included Greene's
name and his association with Classic Realty. Id.
¶ 27. His listing stated that the property condition was
"Renov/Remod" and described the property as,
"Fully renovated & updated home...." Id.
¶ 22, Ex. C. Other than this listing, Greene and Classic
Realty's only involvement in the transaction was
Greene's signing the lead paint disclosure. See
Id. ¶ 34, Ex. A.
27, 2015, Plaintiff Jacob Zuberi and the Hirezis entered a
contract for the purchase of the Property for the price of
$465, 000, which was conditioned upon a home inspection
(among other contingencies) (the "Contract").
Id. The inspection revealed displacement cracks in
the foundation, primarily around the garage, and other issues
such as moisture in the basement wall and plumbing issues in
the lower-level bathroom. Id. ¶ 35, Ex. B.
result of the inspection, on July 3, 2015, the parties
entered an addendum to the Contract (the
"Addendum"), which provided that prior to closing
the Hirezis would address certain issues identified by the
inspection. Id. ¶¶ 35-38, Ex. B. To do so,
the Hirezis engaged Defendants S. Unlimited, LLC ("S.
Unlimited"), M&M Plumbing, LLC ("M&M
Plumbing") and Advance Structural Concepts, LLC
("Advance"). Id. ¶¶ 48, 55, 62.
Unlimited is a licensed contractor (but not a licensed
engineer) that frequently does work for the Hirezis.
Id. ¶ 55. The Hirezis hired S. Unlimited to fix
doors that would not close and to fix certain cracks in the
foundation around the garage area. Id. S. Unlimited
also certified, presumably in its invoice to the Hirezis,
that the foundation was structurally sound. See Id.
¶¶ 57-59. The Hirezis used the invoice from S.
Unlimited to represent to the Zuberis that work listed in the
Addendum had been adequately completed. Id. ¶
59. Similarly, the Hirezis hired M&M Plumbing to switch the
hot and cold water controls in a lower-level bathroom and to
check the basement wall for moisture and leaks. Id.
¶¶ 48, 52. M&M Plumbing is not a licensed plumbing
or home improvement contractor. Id. ¶ 48. The
Hirezis also used M&M Plumbing's invoice to demonstrate
to the Zuberis their completion of certain work set forth in
the Addendum. Id. ¶ 53.
23, 2015, following the work done by S. Unlimited and M&M
Plumbing, the Zuberis' real estate agent observed a large
crack in the foundation wall. Id. ¶ 61. The
Hirezis then hired Advance, an engineering firm, to evaluate
the structure of the home. Id. ¶ 62. At the
Hirezis' request, Advance limited the scope of its
evaluation to the garage area in order to issue a report
certifying that there was no "structural problem"
with the home. Id. ¶¶ 64-66. Thereafter,
the Hirezis emailed the Zuberis' agent on July 26, 2015,
stating there were "[n]o issues on the structure."
Id. ¶ 67.
29, 2015, the transaction closed, and the Zuberis moved into
the home in August. Id. ¶ 70. Subsequently,
latent issues connected to the faulty foundation became
apparent. Id. ¶ 71-73. By January 2016, cracks
had formed in the drywall at nearly every window and doorway.
Id. ¶ 73. In February 2016, the Zuberis had to
hire a plumber to fix backed up sewage in the basement shower
drain and discovered that the drain was misaligned and could
not be repaired. Id. The Zuberis moved out in March
2016 after they hired a professional engineer who advised
them that the foundation was compromised and posed a serious
safety hazard. Id. ¶ 74. The Zuberis filed this
action on August 22, 2016.
12(b)(6) motion to dismiss tests the legal sufficiency of the
complaint. See Randall v. United States, 30 F.3d
518, 522 (4th Cir. 1994); Republican Party of N.C. v.
Martin, 980 F.2d 943, 952 (4th Cir. 1994). A claim
should be dismissed "if, after accepting all
well-pleaded allegations in the plaintiffs complaint as true
... it appears certain that the plaintiff cannot prove any
set of facts in support of his claim entitling him to
relief." Edwards v. City of Goldsboro, 178 F.3d
231, 244 (4th Cir. \999);see also Trulock v. Freeh,
275 F.3d 391, 405 (4th Cir. 2001). In considering a motion to
dismiss, "the material allegations of the complaint are
taken as admitted, " Jenkins v. McKeithen, 395
U.S. 411, 421 (1969) (citations omitted), and the court may
consider exhibits attached to the complaint, Fayetteville
Investors v. Commercial Builders, Inc., 936 F.2d 1462,
1465 (4th Cir. 1991).
"the complaint is to be liberally construed in favor of
plaintiff." Id.; see also Bd. of Trustees v.
Sullivant Ave. Properties, LLC, 508 F.Supp.2d 473, 475
(E.D. Va. 2007). In addition, a motion to dismiss must be
assessed in light of Rule 8's liberal pleading standards,
which require only "a short and plain statement of the
claim showing that the pleader is entitled to relief."
Fed.R.Civ.P. 8. Nevertheless, while Rule 8 does not require
"detailed factual allegations, " a plaintiff must
still provide "more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action
will not do." Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 555 (2007). The allegations in the complaint
"must be enough to raise a right to relief above the
speculative level" to one that is "plausible on its
face." Id. As the Supreme Court stated in
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2008),
"[a] claim has facial plausibility when the plaintiff
pleads factual content that allows the Court to draw a
reasonable inference that the defendant is liable for the
claims, however, are subject to a heightened pleading
standard under Federal Rule of Civil Procedure 9(b), which
requires that "[i]n alleging fraud ... a party must
state with particularity the circumstances constituting fraud
...." These include "the time, place, and contents
of the false representations, as well as the identity of the
person making the misrepresentation and what he
obtained" as a result. Harrison v. Westinghoi4se
Savannah River Co., 176 F.3d 776, 784 (4th Cir. 1999).
But "intent, knowledge, and other conditions of a
person's mind may be alleged generally."
Fed.R.Civ.P. 9(b). A "lack of compliance with Rule
9(b)'s pleading requirements is treated as a failure to
state a claim under Rule 12(b)(6)." Harrison,
176 F.3d at 783 n.5.
A. Claims Against Defendants Diana and Manuel
Amended Complaint asserts seven counts against the Hirezis
that they move to dismiss: fraud (Count I); fraudulent inducement
(Count II); constructive fraud (Count III); negligence per se
(Count V); negligence per se against Diana Hirezi (Count VI);
violation of the Virginia Consumer Protection Act (Count
VII); and civil conspiracy (Count XXVIII).
Virginia law, six independent elements must be pled to state
a claim for fraud: "(1) a false representation, (2) of a
material fact, (3) made intentionally and knowingly, (4) with
intent to mislead, (5) reliance by the party misled, and (6)
resulting damage to the party misled." Evaluation
Research Corp. v. Alequin, 439 S.E.2d 387, 390 (Va.
1994). Constructive fraud differs from actual fraud in that
it only requires that the false representation "was made
innocently or negligently, " rather than intentionally
and knowingly with intent to mislead. Richmond Metro.
Auth. v. McDevitt St. Bovis, Inc., 507 S.E.2d 344, 347
(Va. 1998). Concealment, "whether accomplished by word
or conduct, " can constitute a false representation, but
it must be based on "a knowing and a deliberate decision
not to disclose a material fact." Lambert v.
Downtown Garage, Inc., 553 S.E.2d 714, 717-18 (Va. 2001)
(internal quotation marks omitted). A cause of action for
fraud, however, cannot arise solely out of the exercise of a
contractual right. Richmond Metro. Auth, 507 S.E.2d
three fraud-based claims against the Hirezis all allege that
misstatements caused Jacob Zuberi to enter into, and then
close on, the Contract to purchase the Property with
structural defects. In particular, the claims allege that the
Hirezis made false representations by:
• "concealing major horizontal and vertical cracks
with caulk, tape, drywall, and/or paint";
• "falsely represent[ing] that the Property had
been properly renovated and remodeled";
• "misrepresenting] their intention to fix items
listed in the Addendum as required by ...