United States District Court, E.D. Michigan, Southern Division
Malcolm Smith, Steven Graysmark, John Eccles, Camille Abdo Faraj, Paramjit Hough, Ampect Investments, LLC, Brad Lamel, Brett Specter, Andrew Sherris, Christine Sherris, Barney Edwards, Amanda Edwards, Campello, LLC, Mark Llewellyn-Jones, Kathryn Llewellyn-Jones, and Isabel Knight, Plaintiffs,
Kelly O'Malley, Escrow and Title Services Inc., and Chicago Title Insurance Company, Defendants.
K. Majzoub, Mag. Judge
OPINION AND ORDER GRANTING DEFENDANTS KELLY
O'MALLEY AND CHICAGO TITLE INSURANCE COMPANY'S
MOTIONS FOR JOINDER [28, 30], GRANTING IN PART
DEFENDANTS' MOTION TO DISMISS , AND DISMISSING
E. LEVY United States District Judge
3, 2013, plaintiffs Mark and Kathryn Llewellyn-Jones, along
with several others, sued a collection of real estate
companies and their associates. See Llewellyn-Jones v.
Metro Property Group, LLC, Case No. 13-cv-11977 (E.D.
Mich.). That case asserted a civil claim under the Racketeer
Influenced and Corrupt Organizations Act
(“RICO”), stating that the sixteen defendants in
that case engaged in a mail and wire fraud scheme arising
from the fraudulent sale of purported rental properties in
the Detroit area. Llewellyn-Jones, Complaint, Dkt.
Llewellyn-Joneses, along with the other plaintiffs in this
case, now bring suit against defendants Escrow and Title
Services Inc., Kelly O'Malley, and Chicago Title
Insurance Company for their alleged roles in this scheme.
Each plaintiff alleges that the defendants, as a part of the
enterprise alleged in Llewellyn-Jones, also engaged
in fraud related to the closings of their respective
transactions. For the reasons set forth below,
defendants' combined motion to dismiss (Dkt. 21) is
GRANTED IN PART and this case is DISMISSED.
allege that from “April 2011 until February 2013,
” they were the victims of “a scheme to defraud
investors, primarily foreign investors.” (Dkt. 1 at
15.) The participants in that scheme are identified as Metro
Property Group, LLC, Metro Property Management, LLC, Global
Power Equities, LLC, Apex Equities, LLC, and Summit
Acquisitions, LLC. (Id.) Each of those companies was
previously named as a defendant in Llewellyn-Jones
as a part of this same scheme. Llewellyn-Jones,
Complaint, Dkt. 1.
further allege that Bell Title and O'Malley, acting as
Bell Title's agent, were recruited by the Metro Property
group to assist in the fraudulent scheme. (Dkt. 1 at 16.) The
purported scheme involved the Metro Property Group buying
properties in Detroit, misrepresenting the physical condition
of the properties, the existence of tenants for the
properties, and the profit-generating history of the
properties. (Id. at 16-390.) Bell Title is generally
alleged to have known about these misrepresentations and
failed to disclose the true nature of the transactions to
plaintiffs at or before closing, and to have misrepresented
the true dates of closing on each of the properties.
plaintiffs filed suit on November 17, 2016. (Id.)
Each plaintiff brings claims against Bell Title and
O'Malley for some combination of silent fraud, civil
conspiracy, breach of contract, conversion, and negligent
misrepresentation, all under Michigan law. (See generally
id.) Chicago Title Insurance Company is also alleged to
have participated in some of the transactions as a title
insurer, and is alleged to have breached a title insurance
policy it issued with respect to a property purchased by
Paramjit Hough. (Id. at 278.)
plaintiffs also bring general claims against Bell Title and
O'Malley for silent fraud, civil conspiracy, negligent
misrepresentation and breach of fiduciary duty, and violation
of RICO, as well as an agency claim against Chicago Title and
Insurance Company. (Id. at 390-400.) It is unclear
how the general state law claims differ from the specific
claims asserted for each plaintiff.
January 27, 2017, Bell Title filed a motion to dismiss
plaintiffs' complaint. (Dkt. 21.) O'Malley and
Chicago Insurance and Title each filed motions to join in
Bell Title's motion. (Dkts. 28, 30.) The motion to
dismiss is now fully briefed, and the Court determines that
oral argument is not necessary to determination of this
motion pursuant to E.D. Mich. Local R. 7.1(f).
deciding a motion to dismiss under Fed.R.Civ.P. 12(b)(6), the
Court must “construe the complaint in the light most
favorable to the plaintiff and accept all allegations as
true.” Keys v. Humana, Inc., 684 F.3d 605, 608
(6th Cir.2012). “To survive a motion to dismiss, a
complaint must contain sufficient factual matter, accepted as
true, to state a claim to relief that is plausible on its
face.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). A plausible claim need not contain “detailed
factual allegations, ” but it must contain more than
“labels and conclusions” or “a formulaic
recitation of the elements of a cause of action[.]”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
threshold matter, the O'Malley and Chicago Title's
motions (Dkts. 28, 30) to join in Bell ...