Armenian Assembly of America, Inc. v. Cafesjian, 08-255 (CKK).

• Decision Date: 19 February 2009
• Docket Number: No. 08-255 (CKK).,08-255 (CKK).
• Citation: 597 F.Supp.2d 128
• Parties: The ARMENIAN ASSEMBLY OF AMERICA, INC., et al., Plaintiffs/Counterclaim-Defendants, v. Gerald L. CAFESJIAN, et al., Defendants/Counterclaim-Plaintiffs.
• Court: U.S. District Court — District of Columbia

597 F.Supp.2d 128

The ARMENIAN ASSEMBLY OF AMERICA, INC., et al., Plaintiffs/Counterclaim-Defendants, v. Gerald L. CAFESJIAN, et al., Defendants/Counterclaim-Plaintiffs.

Civil Action No. 08-255 (CKK).

United States District Court, District of Columbia.

February 19, 2009.

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David Taylor Case, K & L Gates LLP, Washington, DC, Arnold R. Rosenfeld, Naoka E. Carey, Kirkpatrick & Lockhart Preston Gates Ellis LLP, Boston, MA, for Plaintiffs/Counterclaim-Defendants.

Nancy L. Berardinelli-Krantz, Thomas F. Cullen, Jones Day, Washington, DC, for Defendants/Counterclaim-Plaintiffs.

MEMORANDUM OPINION

COLLEEN KOLLAR-KOTELLY, District Judge.

This case represents another chapter in the very bitter and very unfortunate dispute between Plaintiffs The Armenian Assembly of America, Inc. ("the Assembly") and The Armenian Genocide Museum and Memorial, Inc. ("AGM & M") (collectively "Plaintiffs") and Defendants Gerald L. Cafesjian ("Cafesjian"), John J. Waters, Jr. ("Waters, Jr."), The Cafesjian Family Foundation, Inc. ("CFF"), and The Tomkat Limited Partnership ("Tomkat") (collectively, "Defendants"). The parties have asserted numerous claims against one another in this and other cases filed in this District.

Currently pending before the Court is Plaintiffs' [25] Partial Motion to Dismiss four counterclaims asserted by Defendants pursuant to Federal Rule of Civil Procedure 12(b)(6). After thoroughly reviewing the parties' submissions, applicable case law, statutory authority, and the entire record of the case as a whole, the Court shall DENY Plaintiffs' Partial Motion to Dismiss for the reasons that follow.

I. BACKGROUND

The following facts are drawn from Defendants' Counterclaims and are not based on any findings of fact made by the Court. On Plaintiffs' Motion to Dismiss, the Court must accept as true all well-pleaded factual allegations set forth in Defendants' Counterclaims. See Scandinavian Satellite Sys. v. Prime TV Ltd., 291 F.3d 839, 844 (D.C.Cir.2002); Ellipso, Inc. v. Mann, No. 05-1186, 2006 WL 1126814 at *1, 2006 U.S. Dist. LEXIS 23710 at *3 (D.D.C. Apr. 27, 2006).¹

From 2000 to 2003, the Assembly and CFF cooperated to promote and develop a museum and memorial to commemorate the Armenian Genocide. Counterclaims ¶ 10. Pursuant to that cooperation, an independent entity, AGM & M, was incorporated in 2003 to own, operate, and maintain the museum and memorial and to engage in various other related activities. Id. ¶ 11. AGM & M is governed by a Board of Trustees who serve as the Board of Directors of AGM & M. Id. ¶ 12. Defendant Waters, Jr. is CFF's representative member on AGM & M's Board of Trustees. Id. ¶¶ 16, 17, 19.

On November 1, 2003, Cafesjian, CFF, and the Assembly entered into a written contract called the "Grant Agreement." Id. ¶ 29. The Grant Agreement required Cafesjian and CFF to transmit funds to the Assembly to establish AGM & M and to purchase properties where the museum and memorial would be located (the "Grant properties"). Id. ¶ 30. On November 1, 2003, the Assembly and AGM & M also entered into a written contract called the "Transfer Agreement." Id. ¶ 34. This agreement required AGM & M to honor all of the Assembly's donor requirements, among other obligations. Id. ¶ 35.

Pursuant to these agreements, Cafesjian and CFF initially donated $2,500,000 and loaned $500,000 to the Assembly for the purchase of land in Washington D.C. for the site of the museum and memorial. Id. ¶ 24. Cafesjian and CFF later donated $12,850,000 for the purchase of four adjacent properties. Id. ¶ 25. In exchange for these donations, the Assembly and AGM & M were required to "permit CFF to participate in all material decisions regarding the memorial." Id. See also id. ¶ 40 (stating that AGM & M agreed that CFF, through its Board of Trustee member, could "participate in all material decisions relating to the museum and memorial"). Finally, the Grant Agreement contained a conditional reversionary interest provision relating to Cafesjian and CFF's donations. In the event that the Grant properties were not developed prior to December 31, 2010, or if properties were not developed in substantial compliance with the plans to be approved by the AGM & M Board of Trustees, Cafesjian and CFF were entitled to the return of their donations (either in the form of the Grant property or the donated funds). Id. ¶¶ 30, 31.

Defendants allege that they were "excluded" from participating in the planning, design, and development of the museum. Id. ¶ 23. They also allege that on May 7, 2007, a portion of AGM & M's board of Trustees prevented CFF, through Waters Jr., from participating in the entirety of the Board of Trustees meeting. Id. ¶ 42. According to Defendants,

AGM & M has failed to honor the Assembly's donor requirements as required by the Transfer Agreement, including its failure to comply with the Assembly's obligations relating to Mr. Cafesjian and CFF's rights pertaining to the museum and memorial as provided by the Grant Agreement between the Assembly, Mr. Cafesjian, and CFF.

Id. ¶ 45.

After the disputes between the parties began to manifest themselves, Defendants allege that Plaintiffs and Hirair Hovnanian ("Hovnanian"), the Chairman of the Assembly, defamed Defendants on four separate occasions.² First, Hovnanian and non-party Carolyn Mugar wrote a letter addressed to "Armenian Assembly Member," which contains the allegedly false statements that:

[a]t no point did the Assembly reject Mr. Cafesjian's vision for the museum, which is his stated reason for abandoning the project and filing suit against the Assembly. Rather, the [AGM & M] Board asked Mr. Cafesjian to proceed with his vision for the museum, only to be informed that he no longer was interested in the project. In addition, the [Assembly] has sought an accounting.

Id. ¶ 46 & Ex. 5 at 1-2 (7/18/07 Assembly Letter).

Second, AGM & M issued a press release dated October 4, 2007, containing the allegedly false statements that:

(1) Cafesjian had filed a "frivolous" lawsuit that was "intended to scuttle the building of a genocide museum in Washington, D.C.";

(2) the lawsuit "has no basis in fact or law";

(3) the lawsuit is "a desperate attempt by Mr. Cafesjian to block the recent progress made by the trustees to restart the process of building [the] museum"; and

(4) AGM & M's actions with regard to Waters Jr. were proper.

Id. ¶ 47 & Ex. 6 at 1 (10/4/07 Press Release).

Third, AGM & M issued a press release dated October 31, 2007, containing the allegedly false statements that:

(1) Cafesjian "left the other trustees with serious problems, including unpaid taxes, leaking roofs, unpaid salaries, unpaid contractors, an illegal lien on the properties, no audits, and compliance problems with other donors' gifts, all of which left in tatters a project that the Armenian-American community strongly endorsed and wants completed";

(2) "In early 2007, after flat-out non-compliance with the Assembly's 501(c)(3) conflict of interest policy and after legal review, Cafesjian and John Waters were suspended from the Assembly board";

(3) "Cafesjian's formation of his personal lobbying organization, USAPAC, has caused additional damage"; and

(4) "Taking control of [AGM & M], [Cafesjian] failed to fund the project, mismanaged development, resigned, and abandoned the properties and project in 2006."

Id. ¶ 48 & Ex. 7, at 1 (10/31/07 Press Release).

Fourth, AGM & M issued a press release dated April 11, 2008, containing the allegedly false statements that:

The lawsuit filed by Cafesjian in April 2007 sought to rescind the grant agreement [CFF] had made with the [Assembly] with respect to the Armenian Genocide Museum project, so that Cafesjian could recover substantially appreciated real estate. Subsequent filings and press attacks by Cafesjian were similarly intended to scuttle the building of a genocide museum.

Cafesjian formally abandoned the project demanding return of appreciated real estate, leaving behind unpaid taxes, an unpaid mortgage, leaking roofs, unpaid salaries, unpaid contractors, an illegal lien on the properties, no audits, and compliance problems with other donors' gifts, all of which left the project in tatters.

Id. ¶ 49 & Ex. 8 at 1 (4/11/08 Press Release).

Although Defendants assert nine counterclaims, only four are subject to Plaintiffs' Partial Motion to Dismiss: Count VI (unjust enrichment), Count VII (constructive trust), Count VIII (defamation), and Count IX (defamation). Plaintiffs filed their Motion to Dismiss on August 15, 2008, which was brought against Plaintiffs and Hovnanian. Defendants filed an Opposition on August 25, 2008, and Plaintiffs filed a Reply on September 2, 2008. At the request of Magistrate Judge Alan Kay on behalf of the parties, the Court held in abeyance its ruling on this motion during the parties' settlement negotiations. The parties have since notified the Court that the settlement negotiations were unsuccessful. Plaintiffs' Motion to Dismiss is therefore fully briefed and now ripe for decision.

II. LEGAL STANDARD

The Federal Rules of Civil Procedure require that a complaint contain "`a short and plain statement of the claim showing that the pleader is entitled to relief,' in order to `give the defendant fair notice of what the ... claim is and the grounds upon which it rests.'" Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1964, 167 L.Ed.2d 929 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). In evaluating a Rule 12(b)(6) motion to dismiss for failure to state a claim, the court must construe the complaint in a light most favorable to the non-moving party and must accept as true all reasonable factual inferences drawn from well-pleaded factual allegations. In re United Mine Workers of Am. Employee Benefit Plans Litig., 854 F.Supp. 914, 915 (D.D.C.1994). While the court must construe the Complaint in the non-moving party...