UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
MARC HIMMELSTEIN,
Plaintiff, v. Civil Action No. 12-1475 (JEB) COMCAST OF THE DISTRICT, L.L.C, et al.,
Defendants.
MEMORANDUM OPINION
Dissatisfied with his cable provider, Plaintiff Marc Himmelstein terminated his service
agreement with Comcast in June 2010. His services were subsequently disconnected, and
Comcast’s equipment was removed from his home. A modem was mistakenly left behind,
however, and his account was charged $220 for the unreturned equipment. This outstanding
balance was then forwarded to a collection agency – Defendant Credit Protection Association,
L.P. (CPA) – and was ultimately reported to the national credit-reporting agencies. Upon
discovering the mix-up, Himmelstein returned the modem to Comcast and sought to have the
company correct his account. Despite reassurances from Comcast that the issue was resolved,
the mistake remained on his credit report, which ultimately resulted in Himmelstein’s having to
pay an additional $26,000 when he sought to refinance the mortgage on his home.
Plaintiff thus brought this suit, asserting four causes of action against Comcast and three
against CPA. 1 Himmelstein asserts claims of breach of contract (Count I), breach of the implied
covenant of good faith and fair dealing (Count II), negligence (Count III), and constructive fraud
1 Although Plaintiff names two different Comcast entities as Defendants, the Court, for ease of reference, will simply refer to them jointly as “Comcast.”
1 (Count IV) against Comcast. He sues CPA for negligence (Count V), constructive fraud (Count
VI), and violations of the Fair Credit Reporting Act (Count VII). Although CPA has filed an
Answer, Comcast now moves to dismiss Counts II-IV under Rule 12(b)(6) for failure to state a
claim upon which relief may be granted. The Court, agreeing with some defense arguments, will
grant the Motion as to Counts II and IV, and deny it as to Count III. Because Comcast has not
challenged Count I, that claim, as well as those against CPA, may also proceed.
I. Background
According to the Complaint, which must be presumed true at this stage, Himmelstein was
a long-time customer of Comcast, receiving residential cable and high-speed internet services at
his home in Northwest Washington. See Compl., ¶ 9. These services were provided pursuant to
a service contract with Comcast. See id., ¶ 10 & Exh. A (Comcast Agreement for Residential
Services). Himmelstein elected to terminate his contract around June 2010, contacting Comcast
to schedule a time for services to be disconnected and the equipment to be removed from his
home. See id., ¶¶ 12, 14.
A Comcast technician came to his residence on June 17, 2012, to remove the equipment,
picking up the cable box, but inadvertently leaving behind a modem. See id., ¶¶ 15, 19, 21.
Himmelstein, under the impression that all equipment had been picked up by the technician and
that he would be receiving a credit for $123.19 when his account was terminated, contacted
Comcast in August 2010 to inquire about the refund. See id., ¶¶ 15-19. On this call, he was
informed for the first time that he owed Comcast approximately $220 for cable-modem
equipment that had not been returned. See id. “Shortly thereafter, Himmelstein received a
demand letter from a collection agency [CPA] seeking to recover, on Comcast’s behalf, the
alleged $220.00 outstanding balance.” Id., ¶ 21. He then contacted Comcast again regarding the
2 status of the account and was told that the charge would be removed and corrected when he
returned the missing modem. See id. Himmelstein located the missing modem and returned it
immediately to Comcast. See id., ¶ 22.
Despite contacting Comcast “on at least three occasions,” Himmelstein received no
written confirmation from Comcast that they had received the modem, but he was told that his
account balance had been corrected and he would be issued a refund check. See id., ¶ 23.
Himmelstein never received the refund check, however, and CPA continued to pursue collection
of the $220 balance. See id., ¶¶ 24-25. The collection agency, moreover, reported the debt to
the national credit-reporting agencies in December 2010. See id., ¶ 26. When Himmelstein
contacted CPA to dispute the debt, it acknowledged the error, ceased collection on the account,
and contacted Comcast to report the account for deletion – but never contacted the national credit
bureaus regarding the mistake. See id., ¶¶ 27-28.
Later that spring, Himmelstein sought to refinance his mortgage with Citibank. See id., ¶
29. His credit report continued to reflect the Comcast debt, despite Himmelstein’s repeated
efforts to redress this with both Comcast and CPA. See id. Because of this outstanding debt,
Citibank required Himmelstein to pay an additional $26,000 (1% of the value of the mortgage)
for the same loan. See id., ¶ 30. In addition to these added financing costs, he has never
received the $123.19 credit he was owed upon termination of his account. See id., ¶ 33.
II. Legal Standard
Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of an action where a
complaint fails to “state a claim upon which relief can be granted.” When the sufficiency of a
complaint is challenged under Rule 12(b)(6), the factual allegations presented in it must be
presumed true and should be liberally construed in a plaintiff’s favor. Leatherman v. Tarrant
3 Cnty. Narcotics & Coordination Unit, 507 U.S. 163, 164 (1993). Although the notice-pleading
rules are “not meant to impose a great burden on a plaintiff,” Dura Pharm., Inc. v. Broudo, 544
U.S. 336, 347 (2005), and “detailed factual allegations” are not necessary to withstand a Rule
12(b)(6) motion, Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007), “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) (internal quotation omitted). Plaintiff must
put forth “factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Id. Though a plaintiff may survive a 12(b)(6)
motion even if “recovery is very remote and unlikely,” Twombly, 550 U.S. at 556 (citing
Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)), the facts alleged in the complaint “must be
enough to raise a right to relief above the speculative level.” Id. at 555.
III. Analysis
In moving to dismiss, Comcast raises putative defects in three of the four causes of action
asserted against it (Counts II, III & IV). It does not, however, seek to dismiss the breach-of-
contract claim (Count I). The Court will address the three challenges in turn.
A. Count II: Breach of the Implied Covenant of Good Faith and Fair Dealing
Defendant first contends that Himmelstein has failed to allege facts that would permit the
Court to infer that Comcast acted with the bad faith required to state a claim for breach of the
implied covenant of good faith and fair dealing. See Mot. at 6-8. Plaintiff counters that it has
alleged sufficient bad faith in “Comcast’s repeated egregious behavior and misrepresentations
made throughout the collections process,” and the “fact that Comcast’s errors and
misrepresentations occurred at least three (3) times to a single customer is sufficient to infer that
Comcast’s actions were not merely a simple ‘mistake, misunderstanding, or oversight,’ . . . but
4 rose to the level of bad faith.” Opp. at 12. The Court disagrees. The accounting mistakes made
by Comcast in handling Himmelstein’s account – while unquestionably frustrating – do not raise
an inference of bad faith sufficient to state a claim for breach of the covenant.
The District of Columbia recognizes that “in every contract there is an implied covenant
that neither party shall do anything which will have the effect of destroying or injuring the right
of the other party to receive the fruits of the contract, which means that in every contract there
exists an implied covenant of good faith and fair dealing.” Hais v. Smith, 547 A.2d 986, 987
(D.C. 1988) (internal quotation marks and citation omitted); see also Allworth v. Howard Univ.,
890 A.2d 194, 201 (D.C. 2006) (“all contracts contain an implied duty of good faith and fair
dealing”) (internal citation omitted). A party may be liable for a breach of this duty if it “evades
the spirit of the contract, willfully renders imperfect performance, or interferes with performance
by the other party.” Paul v. Howard Univ., 754 A.2d 297, 310 (D.C. 2000).
In Allworth, the court looked to the Restatement for guidance on the meaning of “good
faith” in the context of a breach of the covenant, noting:
The phrase “good faith” is used in a variety of contexts, and its meaning varies somewhat with the context. Good faith performance or enforcement of a contract emphasizes faithfulness to an agreed common purpose and consistency with the justified expectations of the other party; it excludes a variety of types of conduct characterized as involving “bad faith” because they violate standards of decency, fairness or reasonableness.
Allworth, 890 A.2d at 201-202 (quoting Restatement (Second) of Contracts § 205 cmt. a). The
court further observed that bad faith “‘may be overt or may consist of inaction,’” involving
“‘evasion of the spirit of the bargain, lack of diligence and slacking off, willful rendering of
imperfect performance, abuse of a power to specify terms, and interference with or failure to
cooperate in the other party’s performance.’” Id. (quoting Restatement § 205 cmt. d).
5 Significantly, the court noted that “‘[b]ad faith means more than mere negligence . . . .’” Id.
(quoting Gupta v. New Britain Gen. Hosp., 687 A.2d 111, 122 (Conn. 1996)); see also Maljack
Prod., Inc. v. Motion Picture Ass’n of America, Inc., 52 F.3d 373, 375 (D.C. Cir. 1995)
(applying California law, but noting breach of covenant requires “a conscious and deliberate act,
which unfairly frustrates the agreed common purposes and disappoints the reasonable
expectations of the other party thereby depriving that party of the benefits of the agreement,”
rather than “honest mistake, bad judgment or negligence”) (internal quotations and citations
omitted).
Plaintiff has failed to allege facts here that would permit the Court to infer that Defendant
acted with the requisite bad faith or willfully rendered imperfect performance. Defendant’s
actions amount to a series of mistakes and were not the result of an interested or corrupt motive.
See Burnsed Oil Co. Inc. v. Grynberg, 320 Fed. App’x 222, 230 (5th Cir. 2009) (applying
Mississippi law in holding, “Bad faith is more than bad judgment or negligence: it is a neglect or
refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake as
to one’s rights or duties, but by some interested or sinister motive and implies the conscious
doing of a wrong because of dishonest purpose or moral obliquity.”) (internal quotation marks
and citation omitted). While Himmelstein consistently attempts to frame Comcast’s actions as
“bad faith” conduct, see Compl., ¶¶ 46-49, the Court must look beyond “‘labels and conclusions’
or ‘a formulaic recitation of the elements of a cause of action,’” when evaluating a Rule 12(b)(6)
motion. See Iqbal, 556 U.S. at 678 (internal citation omitted). The Court cannot infer that
Comcast’s bungled handling of Himmelstein’s account was motivated by a malevolent intent;
indeed, it appears that Comcast sought to redress its errors, though ultimately failing to do so,
since it mailed Himmelstein a shipping box for the missing modem and “informed [him] that if
6 the missing modem were located and returned, the charge would be removed and corrected.”
Compl., ¶ 21. Additionally, “Comcast notified Himmelstein that his account balance had been
corrected and a refund check would be issued automatically.” Id., ¶ 23. These allegations do
not permit a sufficient inference of bad faith, even if Comcast ultimately failed to make good on
these assurances. The Court will thus grant Defendant’s Motion as to Count II.
B. Count III: Negligence
Comcast next maintains that Plaintiff’s negligence claim fails because he did not
sufficiently allege that Comcast owed him any duty of care; without such a duty, the mere
negligent breach of a contract cannot sustain an action sounding in tort. See Mot. at 9-10.
Himmelstein disputes this, arguing that the special relationship between a creditor and a debtor
gives rise to an independent duty upon which his negligence claim is based. See Opp. at 15-17.
After first discussing this duty question, the Court will address two other issues related to the
negligence claim: the liability-limitation provision in the contract and the economic-loss
doctrine.
1. Duty
To establish a negligence claim, a plaintiff must show “(1) a duty, owed by the defendant
to the plaintiff, to conform to a certain standard of care; (2) a breach of this duty by the
defendant; and (3) an injury to the plaintiff proximately caused by the defendant’s breach.” Dist.
of Columbia v. Fowler, 497 A.2d 456, 462 n.13 (D.C. 1985). A negligence claim based solely
on a breach of the duty to fulfill one’s obligations under a contract, however, is duplicative and
unsustainable. See, e.g., Choharis v. State Farm Fire and Cas. Co., 961 A.2d 1080, 1089 (D.C.
2008) (“[T]he tort must exist in its own right independent of the contract, and any duty upon
which the tort is based must flow from considerations other than the contractual relationship.
7 The tort must stand as a tort even if the contractual relationship did not exist.”). Plaintiff must
thus allege an independent duty to support his negligence claim. Whether such a duty exists is a
question of law for the Court. Hedgepeth v. Whitman Walker Clinic, 22 A.3d 789, 811 (D.C.
2011).
At issue, then, is “essentially a question of whether the policy of the law will extend the
responsibility for the conduct to the consequences which have in fact occurred.” Id. at 793
(internal quotation marks and citation omitted); see also Islam v. Option One Mortg. Corp., 432
F. Supp. 2d 181, 195 (D. Mass. 2006) (“‘[T]he problem of duty is as broad as the whole law of
negligence, and . . . no universal test for it ever has been formulated. It is a shorthand statement
of a conclusion, rather than an aid to analysis in itself . . . . [D]uty is not sacrosanct in itself, but
is only an expression of the sum total of those considerations of policy which lead the law to say
that the plaintiff is entitled to protection.’”) (quoting William L. Prosser & W. Page Keeton,
Prosser & Keeton on Torts, § 53, at 357-58 (5th ed. 1984)).
Plaintiff maintains that District of Columbia law “expressly recognizes” a duty resulting
from the special relationship between a creditor and debtor. See Opp. at 16. He cites no
authority from this jurisdiction, however, showing that a debtor-creditor relationship standing
alone creates an independent duty that would support a negligence claim. Instead, Plaintiff
directs the Court to dicta in a footnote in Waldon v. Covington, 415 A.2d 1070 (D.C. 1980),
which noted that certain conduct may support a claim of intentional infliction of emotional
distress where there is a special relationship, such as a debtor-creditor relationship. See id. at
1076 n.21 (citation omitted). Neither Waldon – nor the 1939 D.C. Circuit case upon which it
relies – discussed the central question identified in Hedgepeth of whether, as a matter of policy,
8 the law should extend the responsibility for negligent conduct to a creditor in a simple creditor-
debtor relationship.
In fact, there are at least two cases from this District suggesting that the creditor-debtor
relationship may not create such a duty. In Overseas Private Inv. Corp. v. Industria de Pesca,
N.A., Inc., 920 F. Supp. 207 (D.D.C. 1996), Judge Paul Friedman dismissed a counterclaim
against OPIC, finding that no fiduciary duty existed between the creditor and debtor. See id. at
209-10. The Court stated that it was
not persuaded that defendants/counter-plaintiffs have alleged the basis for finding a fiduciary relationship. The relationship between a debtor and a creditor in a loan transaction is “ordinarily a contractual relationship . . . and is not fiduciary in nature.” Yousef v. Trustbank Sav., FSB, 568 A.2d 1134, 1138 (Md. 1990); see Paradise Hotel Corp. v. Bank of Nova Scotia, 842 F.2d 47, 53 (3d Cir. 1988); Reid v. Key Bank of Southern Maine, 821 F.2d 9, 16- 18 (1st Cir. 1987).
Id. at 210. The court further noted that there were “no special circumstances” or any provisions
in the parties’ contract that supported an argument that the lender had “assumed any special
relationship of trust or confidence in this particular case.” Id. Subsequently, in Ponder v. Chase
Home Finance, LLC, 666 F. Supp. 2d 45 (D.D.C. 2009), another court in this District dismissed
a borrower’s claim of negligence arising from the lender’s alleged failure to accurately deliver
loan documents, finding there was no special duty owed by the defendant to the plaintiff. Id. at
49-50. In so holding, the court recognized that “[t]he relationship between a debtor and a
creditor is ordinarily a contractual relationship and not a fiduciary relationship.” Id. at 49 (citing
Overseas Private Inv. Corp., 920 F. Supp. at 210).
Authority from outside this jurisdiction only further complicates the matter, with cases
reaching conflicting outcomes on the issue of whether the debtor-creditor relationship creates an
independent duty sufficient to support a negligence claim. Compare Verizon Advanced Data v.
9 Frognet, Inc., No. 05-955, 2010 WL 1433325, at *13 (S.D. Ohio April 2, 2010) (billing disputes
between contracting parties may only be resolved “through a contract action because Verizon did
not have any legal duties in this regard separate and apart from those it assumed in the
agreement. Without a duty owed separately from that created by the contract, FrogNet’s claim
for negligence cannot stand.”) (internal quotation marks and citations omitted); Mercado v. Bank
of America, N.A., No. 12-1123, 2012 WL 5629749, at *4 (D.N.J. Nov. 15, 2012) (dismissing
negligence claims and noting that “‘[t]he virtually unanimous rule is that creditor-debtor
relationships rarely give rise to a fiduciary duty’”) (quoting United Jersey Bank v. Kensey, 704
A.2d 38 (N.J. App. Div. 1997)); Muller-Paisner v. TIAA, No. 03-6265, 2012 WL 3205583, at *7
(S.D.N.Y. Aug. 9, 2012) (recognizing duty does not normally arise between parties in
commercial transactions – including creditor-debtor relationship – unless there is a “relationship
of confidence, trust, or superior knowledge or control”) (internal quotation marks and citations
omitted); LaPosta v. Lyle, No. 11-177, 2012 WL 1752550, at *7 (N.D.W.Va. May 16, 2012) (no
duty sufficient to support negligence claim unless plaintiffs could establish “that the relationship
between the parties was such that the creditor went above and beyond the normal relationship
between debtor and creditor so as to create a ‘special relationship’”) (internal citation omitted);
Zaffrullah v. Countrywide Home Loans, Inc., No. 09-61142, 2010 WL 503074, at *5 (S.D. Fla.
Feb. 8, 2010) (dismissing negligence claim where party “failed to plead a recognizable duty in
what was an arms-length creditor/debtor relationship”); In re Montagne, No. 08-10916, 2010 WL
271347, at *9 (Bankr. D. Vt. Jan. 22, 2010) (no duty sufficient to support negligence claim by
debtor against creditor where “the sources of ‘duty’ . . . are contract claims garbed in negligence
clothing and are therefore insufficient to state a claim. [There is no duty] owed to him,
independent of its contractual duty, and thus the negligence claim fails as a matter of law”); with
10 Vickie M. Champion v. Global Credit Card Serv., LLC, No. 12-1966, 2012 WL 3542225, at *8
(N.D. Ala. Aug. 15, 2012) (recognizing “duties owed by a creditor to individuals to whom it
issues credit are, e.g., a duty to maintain accurate records and a duty not to report false
information about those individuals to third parties”); Colo. Capital v. Owens, 227 F.R.D. 181,
188 (E.D.N.Y. 2005) (finding that creditor owed debtor “a duty of reasonable care in the
handling of his account, which includes the collection of his debt”); Tourgeman v. Collins
Financial Serv., Inc., No. 08-1392, 2010 WL 4817990, at *6 (S.D. Cal. Nov. 22, 2010) (citing
Colo. Capital as support for creditor-debtor duty).
In a lengthy analysis of whether such a duty should be recognized, a district court in
Massachusetts recognized the “uncertainty surrounding the existence of a negligence duty.”
Islam, 432 F. Supp. 2d at 198. The court there ultimately permitted the negligence claims to
move forward, but noted that if the plaintiffs were successful on those claims, “the Court may
consider it appropriate to certify this question – and the fully developed record – to the Supreme
Judicial Court of Massachusetts . . . for a definitive answer.” Id. Finding the question of duty
similarly unresolved here, the Court will permit Plaintiff’s claims to proceed at this stage of the
litigation, pending further briefing by the parties after some discovery.
2. Limitation of Liability
Comcast also challenges the scope of damages that Plaintiff may obtain through his
negligence claim, maintaining that he is preempted from seeking consequential damages by the
limitation-of-liability provision in the contract. See Mot. at 10. Himmelstein contends that “the
actual limitation of liability clause is far narrower” than Comcast contends and thus does not bar
his claims. Opp. at 5; see also id. at 5-10. The Court agrees.
11 The parameters of these limitations are set forth in Section 11 of the Comcast Agreement
for Residential Services, which is entitled “Limitation of Comcast’s Liability.” See Mot., Exh. A
(Agreement) at 10-15. In subsection (a), entitled “Application,” the agreement states:
The limitations of liability set forth in this Section apply to any acts, omissions, and negligence of Comcast and its underlying third-party service providers, agents, suppliers, distributors, licensors and business partners (and their respective officers, employees, agents, contractors or representatives) which, but for that provision, would give rise to a cause of action in contract, tort or under any other legal doctrine.
Id. at 10-11 (emphasis added). The limitations are thus bounded by the subsequent provisions
identifying the acts and omissions that are covered by the clause. These subsequent subsections
of (b) – (g) set forth limitations on liability related to: “Customer Equipment,” “Other Services or
Equipment,” “Software,” “Disruption of Services,” “Directory Listings,” and “Third Parties.”
Id. at 11-14. In each of these subsections, the agreement identifies the specific type of harms
covered by the limitation provision, as well as the scope of remedies available to the customer
pursuant to these limitations. See id.
Defendant appears to acknowledge that none of these provisions expressly covers the
underlying actions here, but maintains that “[b]illing for services, and any alleged billing errors
and attendant collection activities, plainly result directly or indirectly from or in connection with
Mr. Himmelstein’s use of Comcast’s service. But for his subscription to and use of Comcast’s
services, Mr. Himmelstein would not have any dispute with Comcast.” Reply at 4. This
reasoning, however, would render the specific provisions identifying the covered actions in
subsections 11 (b) - (g) meaningless, as it would limit Comcast’s liability for any act or omission
of any sort, since all such acts would “plainly result directly or indirectly from or in connection
with Mr. Himmelstein’s use of Comcast’s service.” Because the agreement circumscribes the
12 limitations on liability to specific harms, and the harm here is not covered by any of these
provisions, Himmelstein is not barred from seeking consequential damages by the liability-
limitation provision in the agreement.
3. Economic-Loss Doctrine
The Court, however, cautions that it has serious concerns that Plaintiff’s claims may
alternatively be barred by the economic-loss doctrine – an issue that has not been discussed by
the parties, but should be addressed in subsequent pleadings. The economic-loss rule “bars a
plaintiff from recovering for purely economic losses under a tort theory of negligence.” In re
Michaels Stores Pin Pad Litig., 830 F. Supp. 2d 518, 528 (N.D. Ill. 2011); see also Potomac
Plaza Terraces, Inc. v. QSC Prod., Inc., 868 F. Supp. 346, 354 (D.D.C. 1994) (adopting
economic-loss doctrine); RLI Ins. Co. v. Pohl, Inc. of America, 468 F. Supp. 2d 91, 94 (D.D.C.
2006) (finding “the District of Columbia ‘has not authorized tort recovery for purely economic
losses in a contract setting’”) (quoting Furash & Co. v. McClave, 130 F. Supp. 2d 48, 56 (D.D.C.
2001)).
Almost all of the loss here results from the higher cost of financing for Himmelstein’s
mortgage. See Compl., ¶ 54 (“Himmelstein has suffered damages related to: unpaid refunds of
prepaid fees; fees charged by mortgage lenders on Himmelstein’s March 2011 refinance; pre-
filing attorney’s fees related to correction of the improper accounting; post-filing attorney’s fees;
and other fees and costs . . . .”). While there do not appear to be any cases within this
jurisdiction where a court has reviewed such damages under the economic-loss doctrine, there
are several cases from Texas that have rejected similar claims involving damages resulting from
increased borrowing costs. In Blanche v. First Nationwide Mortg. Corp., 74 S.W. 3d 444 (Tex.
App. 2002), the court rejected a negligence claim stemming from the lender’s handling of the
13 borrower’s account and incorrect reporting of account information to credit bureaus, where the
specified damages included “the denial of various loans and the payment of higher interest
rates.” Id. at 453. Additionally, in Belanger v. BAC Home Loans Servicing, L.P., 839 F. Supp.
2d 873 (W.D. Tex. 2011), relying upon Blanche, a district court held that Belanger’s negligence
claim was barred where “the only damages claimed by Belanger are the increased costs of
borrowing,” due to the damage to his credit score. Id. at 877; see also Sanghera v. Wells Fargo
Bank, N.A., No. 10-2414, 2012 WL 555155, at *6 (N.D. Tex. Feb. 21, 2012) (loss of
creditworthiness an economic damage arising from breach of parties’ contractual relationship,
which was barred by economic-loss rule); In re Thrash, 433 B.R. 585, 598-600 (N.D. Tex.
Bankr. 2010) (court did not reach question of whether duty existed, finding negligence claims
were otherwise barred because parties’ inability to refinance their home and increased interest
rates resulting from delinquency defendant reported to credit bureaus were not damages that
supported a negligence claim). While none of these cases is controlling, the Court nonetheless
finds the reasoning sufficiently persuasive to require Plaintiff to explain in further submissions
why his negligence claim should survive.
C. Count IV: Constructive Fraud
Finally, Defendant contends that Himmelstein’s constructive-fraud count should be
dismissed as he cannot allege the “confidential relationship” essential for such a claim. See Mot.
at 11-12. Himmelstein’s relationship with Comcast is limited to that of a cable subscriber to his
cable-services provider, Defendant argues, and there are no facts suggesting the relationship
extended beyond the terms of their contract. See id. at 12. Plaintiff responds that no confidential
relationship is required to assert a cause of action for constructive fraud and that he has alleged
sufficient facts to sustain this claim based on Comcast’s breach of its legal duty to keep an
14 accurate assessment of Himmelstein’s account and to accurately report the status of the account
to credit agencies. See Opp. at 14-15. The Court rejects Himmelstein’s attempt to eliminate the
special-relationship requirement from a constructive-fraud claim. Even if this relationship were
not required, the claim would nonetheless fail as Plaintiff has not alleged that he relied on
Comcast’s representations.
Under District of Columbia law, a plaintiff claiming fraud must prove “(1) the defendant
made a false representation; (2) in reference to material fact; (3) with knowledge of its falsity; (4)
with the intent to deceive the plaintiff; (5) the plaintiff acted in reasonable reliance on that
representation; (6) which consequently resulted in provable damages.” Essroc Cement Corp. v.
CTI/D.C., Inc., 740 F. Supp. 2d 131, 145 (D.D.C. 2010); see also Schiff v. AARP, 697 A.2d
1193, 1198 (D.C. 1997) (citing Howard v. Riggs Nat’l Bank, 432 A.2d 701, 706 (D.C.1981)).
Constructive fraud includes all the same elements as actual fraud, except the intent to deceive.
See De May v. Moore & Bruce, L.L.P., 584 F. Supp. 2d 170, 185 (D.D.C. 2008) (“neither actual
dishonesty nor intent to deceive is the essential element [of constructive fraud]; and negligence
so gross as to deceive might be such fraud”) (citing Rick v. United States, 161 F.2d 897, 899
(D.C. Cir. 1947)).
In addition to these requirements, constructive fraud requires a plaintiff to demonstrate
the existence of a confidential relationship between himself and the defendant, “by which the
defendant is able to exercise extraordinary influence over plaintiff.” McWilliams Ballard, Inc. v.
Broadway Mgmt. Co., 636 F. Supp. 2d 1, 7 n.7 (D.D.C. 2009) (quoting Witherspoon v. Philip
Morris, 964 F. Supp. 455, 461 (D.D.C. 1997)) (internal quotation marks omitted); see also Lee v.
Bos, No. 11-1982, 2012 WL 2852235, at *3 (D.D.C. July 11, 2012) (citing 3D Global Solutions,
Inc. v. MVM, Inc., 552 F. Supp. 2d 1, 8 (D.D.C. 2008)) . The requisite “special relationship”
15 requires more than parties’ transacting at arms’ length and is one “in which one party has gained
the trust and confidence of the other, enabling the first party to exercise extraordinary influence
over the other.” 3D Global Solutions, Inc., 552 F. Supp. 2d at 8 (quoting Witherspoon, 964 F.
Supp. at 461) (internal quotation marks omitted); see also Cordoba Initiative Corp. v. Deak, No.
11-1541, 2012 WL 5285132, at *5 (D.D.C. Oct. 26, 2012) (special relationship where “special
trust and confidence” based on Deak’s “advising and supporting Cordoba over several years”).
In Goldman v. Bequai, 19 F.3d 666 (D.C. Cir. 1994), this Circuit, applying District of
Columbia law, provided guidance on the factors to use in determining whether such a
relationship exists: “Mental capacity, age, education, business knowledge, and the extent to
which the alleged victim entrusted her affairs to the other party are among the relevant factors in
establishing the existence of such a relation.” Id. at 674. Given this high threshold, the Court
declines Plaintiff’s invitation to find “constructive fraud, absent a confidential relationship,
where a defendant’s conduct violates a public confidence.” Opp. at 14 (pointing to authority
from outside the District of Columbia, such as “[m]any state and federal courts, including
Maryland,” but acknowledging no precedent for such an interpretation in D.C.).
Holding that a confidential relationship is required, the Court finds that Plaintiff has not
alleged sufficient facts to suggest its existence here. As a court in this District noted in
Witherspoon, “Establishing a confidential relationship is a difficult burden.” 964 F. Supp. at
461. The court there rejected the plaintiff’s argument that the manufacturer-consumer
relationship could be characterized as confidential because of its length of time – 38 years – and
the fact that the consumer had received “personalized mail” from the manufacturer, noting that
the plaintiff was “only one of millions of consumers and potential consumers targeted by
Defendant’s advertisements,” and the personalized mail the plaintiff received from the defendant
16 “is not enough to create a relationship of trust that could be likened to one with a close family
member, attorney, or a priest from whom one gets personal counseling.” Id. at 461-62; see also
Geiger v. Crestar Bank, 778 A.2d 1085, 1095 (D.C. 2001) (no special relationship where parties’
interactions were limited to contractual agreement and no facts “detailing a history of interaction
between Mr. Geiger and Crestar which extended their relationship beyond the provisions of the
account agreement”). Similarly, Himmelstein’s interactions with Comcast did not create any
relationship of special trust, nor do his phone contacts with various Comcast representatives
subsequent to the termination of services transform this basic consumer relationship into
something more.
Even if Himmelstein could allege such a relationship, he cannot satisfy the detrimental-
reliance element of constructive fraud, as he does not allege that he took any action – or refrained
from taking any – in reliance on Comcast’s representations. See Essroc, 740 F. Supp. 2d at 145.
The Court will thus grant Defendant’s Motion as to Count IV.
IV. Conclusion
For the foregoing reasons, the Court will issue a contemporaneous Order this day
granting Defendant’s Motion to Dismiss Counts II and IV and denying its Motion as to Count
III.
/s/ James E. Boasberg JAMES E. BOASBERG United States District Judge Date: December 10, 2012