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Banker v. Moulton

United States District Court, Second Circuit

October 17, 2013

Brooks Banker, Plaintiff,
v.
Carl Moulton, Defendant.

REPORT AND RECOMMENDATION (Doc. 51)

JOHN M. CONROY, Magistrate Judge.

This case arises out of a contract for the sale of land in Charlotte, Vermont. The sale never occurred, in part because the Town did not grant the buyer, Plaintiff Brooks Banker, a permit to build a single-family home. Banker now brings this pro se diversity action against the contemplated seller, Defendant Carl Moulton, seeking the return of $50, 000 in escrowed funds and other alleged damages. Moulton denies that Banker is entitled to the escrowed funds, and has filed counterclaims for slander of title and breach of contract. Presently before the Court is Banker's motion pursuant to Fed.R.Civ.P. 12(c) for judgment on the pleadings on (1) Moulton's counterclaims, and (2) Counts One and Two of the Amended Complaint, which seek declaratory and injunctive relief. For the reasons set forth below, I recommend that the motion (Doc. 51) be DENIED.

Factual Background

In reviewing a motion for judgment on the pleadings pursuant to Rule 12(c), the Court must accept the non-moving party's allegations as true and draw all reasonable inferences in that party's favor. L-7 Designs, Inc. v. Old Navy, LLC, 647 F.3d 419, 422 (2d Cir. 2011); Johnson v. Rowley, 569 F.3d 40, 43-44 (2d Cir. 2009). When, as in this case, a plaintiff moves for judgment under Rule 12(c) on claims in his own pleading, allegations in that pleading that have been denied by the non-moving party are generally deemed to be false. 5C Charles Alan Wright et al., Federal Practice and Procedure ยง 1368 (3d ed. & Supp. 2013); Hal Roach Studios, Inc. v. Richard Feiner & Co., Inc., 896 F.2d 1542, 1550 (9th Cir. 1990) ("[T]he allegations of the non-moving party must be accepted as true, while the allegations of the moving party which have been denied are assumed to be false."). Mindful of these controlling standards of law, and for purposes of this motion only, the Court makes the following factual findings.

On August 4, 2004, Banker and Moulton executed a written Purchase and Sale Agreement ("Agreement") whereby Banker agreed to purchase 34 acres of land in Charlotte, Vermont from Moulton for the sum of $650, 000. Banker subsequently delivered $50, 000 to a real-estate agent, with the understanding that the funds would be held in escrow until closing. The Agreement provided that the closing was contingent upon the Charlotte Planning Commission's written approval of Banker's plans to improve the parcel by constructing a single-family residence. The Agreement further provided that if Banker was not satisfied with the conditions imposed upon him by the Charlotte Planning Commission, he had the right to cancel the Agreement. The Charlotte Planning Commission ultimately did not approve Banker's planned construction of a single-family residence on the land.

Banker commenced this action in 2008, seeking specific performance of the Agreement. In his original Complaint, he alleged that Moulton had made certain representations and warranties, including representations that the condition of the property was in compliance with various local, county, and state rules and regulations, and that there were no easements on the property. The Complaint alleged that, in fact, the property was subject to an access easement in favor of an adjoining land owner, and that Moulton had created an unspecified dangerous condition on the property. Banker also claimed that after entering into the Agreement, Moulton violated its terms by mortgaging the property to secure a $250, 000 loan. Banker further alleged that a single-family house could not be built on the property, and that Moulton was in default. In addition to his claim for specific performance, Banker sought an abatement of $100, 000 in the purchase price. (Doc. 1.)

On December 7, 2011, this case was stayed after Moulton provided the Court with notice of his bankruptcy filing in the United States Bankruptcy Court for the District of New Hampshire. (Doc. 25.) In addition to ordering the stay, the Court ordered Moulton's counsel, Michael Harris, Esq., to file periodic reports to keep the Court apprised of the status of the bankruptcy proceedings. No specific reporting requirements were imposed, and Attorney Harris filed regular six-month status reports with the Court. The Court lifted the stay on March 20, 2013, after receiving notice that the bankruptcy case had been dismissed. (Doc. 37.)

The Court subsequently granted Banker leave to amend his pleadings, and he filed an Amended Complaint on June 13, 2013. (Doc. 48.) The Amended Complaint realleges that the parties entered into the Agreement for the sale of land, and that Banker delivered $50, 000 to the escrow agent. Banker also alleges that the Charlotte property has now been sold to a third party, but that Moulton refuses to release the escrowed funds. Accordingly, Banker brings new causes of action seeking: (1) a declaratory judgment declaring him the sole owner of the funds; (2) an injunction requiring the escrow agent to release the funds, with interest; and (3) damages for Moulton's alleged conversion of the funds.

Banker also brings a fourth cause of action for abuse of process. This claim focuses upon the status reports submitted to this Court by Attorney Harris. Banker alleges that Moulton is liable because Attorney Harris declined to disclose: that the Bankruptcy Court had "rejected" the Purchase and Sale Agreement; that Banker had requested the return of the escrowed funds in 2009; that Moulton refused to return the funds; that the Bankruptcy Court had authorized the sale of property; and that the property had been sold to a third party. Banker seeks $50, 000 and additional punitive damages on this claim.

In his Counterclaims, Moulton alleges that he supported Banker's efforts to seek approval from the Charlotte Planning Commission, and through counsel, indicated to the Planning Commission that he "was prepared to address any concerns that were under his control as land owner." (Doc. 54 at 3.) When the Planning Commission suggested that Banker explore alternate building sites, Banker allegedly responded that no other site would be acceptable. Moulton claims that Banker subsequently demanded that he "obtain all permits and approvals for [Banker] and also reduce the purchase price by $100, 000.00" ( Id. )

Moulton asserts that after failing to obtain approval from the Planning Commission, Banker's available remedies under the Agreement were to either close on the property, or cancel the Agreement and receive back the escrowed funds. Instead, Banker recorded the Agreement in the Charlotte town land records. Moulton claims that the act of recording "effectively cast a cloud on [his] title to the property thereby unlawfully interfering with Defendant's ability to sell his property to other prospective buyers, until he filed for bankruptcy protection in 2009." ( Id. at 4.) Moulton also contends that Banker defaulted by failing to exercise his available remedies under the Agreement, and by refusing to discharge the recording until Moulton obtained "all of Plaintiff's permits and approvals." ( Id. at 5.) The Counterclaims thus set forth causes of action for slander of title and breach of contract.

It is undisputed that the parties entered into the Agreement, and that Banker placed $50, 000 with the escrow agent. It is also undisputed that the Bankruptcy Court rejected the original Agreement, that Moulton has not authorized the return of the funds to Banker, and that the money remains in escrow. The parties dispute whether Banker is entitled to the funds. The contents of Attorney Harris's status reports are also undisputed, as they are part of the record in this case. Moulton argues, however, that the reports are irrelevant because the omitted information was not required to be reported to the Court. He also contends that the Bankruptcy Court's approval of the rejection of the Agreement did not render the Agreement void. Now before the Court is Banker's Motion for Judgment on the Pleadings with respect to each of Moulton's counterclaims, as well as Banker's own claims for declaratory and injunctive relief.[1]

Discussion

I. Standard of ...


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