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Landmark Collegiate Acquisitions, LLC v. Solomon

United States District Court, N.D. West Virginia

June 21, 2017

CYNTHIA SOLOMON; GARY SOLOMON; VICTOR SOLOMON, II; VIC'S GARAGE, INC.; and STEVEN SOLOMON, Defendants/Cross-Defendants/ Counterclaimants/Crossclaimants.



         On February 28, 2017, the plaintiffs, Landmark Collegiate Acquisitions, LLC (“Landmark”), and The Standard at Morgantown, LLC (“The Standard”), filed this action against siblings Cynthia Solomon, Gary Solomon, Victor Solomon, II, and Steven Solomon, as well as Vic's Garage, Inc. (“Vic's Garage”) (Dkt. No. 1). Acting pro se, defendant Steven Solomon answered the complaint and filed a three-count counterclaim (Dkt. No. 21). Now pending is the plaintiffs' motion to dismiss the counterclaim for failure to state a claim upon which relief can be granted (Dkt. No. 26). For the reasons that follow, the Court GRANTS the plaintiffs' motion.

         I. BACKGROUND

         When considering the plaintiffs' motion to dismiss, the Court is obligated to accept as true the well-pleaded facts in the counterclaim, and view them in the light most favorable to Steven Solomon. De'Lonta v. Johnson, 708 F.3d 520, 524 (4th Cir. 2013).

         A. The Plaintiffs' Complaint

         Landmark and The Standard are affiliated entities that sought to construct a large student housing development called “The Standard at Morgantown” in downtown Morgantown, West Virginia (“the Project”) (Dkt. No. 1 at 1). The Project involved planning the development, acquiring property, and seeking approvals and variances from the local government. Id. at 1, 3-4. The plaintiffs allege that they ultimately were forced to abandon the Project because of the defendants' breaches of contract, misrepresentations, and interference. Id. at 2.

         On April 16, 2015, Landmark entered into a contract with Cynthia Solomon, Gary Solomon, Victor Solomon, II, and Vic's Garage[1] (“the Seller Defendants”) to purchase three parcels of real estate for the Project (“the Solomon Contract”). Id. at 4. These three parcels of real estate comprise two tracts. The First Tract is identified as Tax Map 26A, Parcel 13. Gary Solomon owns a one-fourth interest in this tract, and the remaining three-fourths is owned by the Estate of Lena Solomon that is anticipated to pass to defendants Cynthia Solomon, Gary Solomon, and Victor Solomon, II. Vic's Garage owns the Second Tract, identified as Tax Map 26A, Parcels 14 and 15. Id. at 4-6.

         In the Solomon Contract, the individual Seller Defendants warranted that they had marketable title to the First Tract, including the right to deliver it at closing. Id. at 5-6. They further represented that they had obtained all necessary corporate consents and permissions to sell the Second Tract, and agreed to keep the terms of the contract confidential. Id. at 6-7.

         Following execution of the Solomon Contract, the parties became involved in a number of legal actions. On July 2, 2015, Steven Solomon filed a complaint in the Circuit Court of Monongalia County, West Virginia (“Circuit Court”), against the Estate of Lena Solomon, in which he alleged that a 1975 deed conveying his interest in the First Tract to Lena Solomon had been forged (“fraud suit”). Id. at 7. On September 29, 2015, Landmark and the Seller Defendants, with the exception of Vic's Garage, filed a complaint for partition in the Circuit Court, seeking to clear title to the property at issue (“partition suit”). Id. at 7-8. On November 25, 2015, Steven Solomon filed a second complaint, this time against the Seller Defendants, in the Circuit Court (“contract suit”), alleging that the Solomon Contract was not enforceable, in part because it had not been properly executed on behalf of Vic's Garage (“contract suit”). Id. at 8.

         The Circuit Court dismissed the contract suit on March 4, 2016, primarily on the basis that Steven Solomon was not a party to the Solomon Contract and therefore lacked standing to challenge its enforceability. The Circuit Court then dismissed the fraud suit on March 9, 2016, finding that Steven Solomon had failed to sufficiently plead a cause of action for fraud, and that, in any case, his claims were barred by the statute of limitations. Id. at 9.[2]

         On March 10, 2016, Morgantown's Planning Commission held a hearing on The Standard's Application for a Type III Site Plan Review for Developments of Significant Impact, which it had filed on October 2, 2015. Id. at 9. Steven Solomon appeared at the hearing and spoke in opposition to the application. In his remarks, he accused the plaintiffs of providing fraudulent statements to the Planning Commission, questioned the authenticity of studies the plaintiffs had submitted, alleged that the plaintiffs had filed a partition suit despite having no legal interest in the property, accused the plaintiffs of organizing an unlawful meeting of Vic's Garage, and stated that the plaintiffs had coerced Gary Solomon into signing an extension of the Solomon Contract. Id. at 10-11.

         On July 28, 2016, as a result of alleged breaches by the Seller Defendants, Landmark notified them that it was terminating the Solomon Contract and demanded the return of $230, 000 in earnest money. On August 4, 2016, the Seller Defendants disputed termination of the Solomon Contract and directed the escrow agent not to release the earnest money to Landmark. Id. at 11. Thereafter, on February 28, 2017, the plaintiffs filed the instant suit, seeking compensatory and punitive damages for breach of contract, defamation, and tortious interference with business and contractual relationships. Id. at 11-17.

         B. Steven Solomon's Counterclaim

         On March 28, 2017, Steven Solomon filed a counterclaim against the plaintiffs (Dkt. No. 21). In the first count, entitled “refusal to comply with order, ” he alleges that, on December 15, 2015, Monongalia County Circuit Judge Philip Gaujot ordered the parties in the partition suit to “appear at mediation and negotiate in good faith.” Id. at 9. According to Solomon's counterclaim, Landmark appeared at the mediation but “refused to engage in any good faith negotiations with [him], refused to put any offer in writing, continually threaten [sic] to bury him with more legal action, tried to intimate [sic] him with Landmarks [sic] unlimited resources and high price lawyers.” Id. Although Landmark produced a 60-page proposed settlement agreement the next day, Steven Solomon contends it was a one-sided document that would have given Landmark “an unfair, unlawful advantage.” He alleges that Landmark refused to negotiate the contents of the agreement, and failed to mediate in good faith. Id. at 9-10.

         In his second count, Steven Solomon contends that Landmark tortiously interfered with the “internal business process” of Vic's Garage, and more particularly with Steven Solomon's rights as a one-third owner. Id. at 10-11.[3] He alleges that Landmark, by its attorneys, orchestrated and conducted a special shareholder meeting for Vic's Garage. He further contends that the purpose of the meeting was to suppress his opposition to breaches of fiduciary duties by Cynthia Solomon and Gary Solomon, and to “attempt to legitimize the infamous” Solomon Contract seven months after it had been signed without the requisite corporate resolution. Id. at 10. As a result, Steven Solomon contends that Landmark removed him “from the purchasing process, removed his ability to protect his interest in Vic's, [and] removed his ability to stop corporation actions not in the best interest of the corporation and the Shareholders.” Id. at 11.

         Liberally construed, the third count alleges that the plaintiffs engaged in three acts of fraud. Id. at 11-14. First, The Standard filed its application with the Planning Commission, indicating it was the “owner, ” although it did not yet own the properties at issue. Id. at 12. Second, The Standard submitted a traffic study to the Planning Commission, that concluded the Project would result in a decrease in traffic. According to Steven Solomon, this was fraudulent because “[n]o unbiased person would believe that a development of the magnitude of Standard's project would result in a net decrease in the ...

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