Armenian Assembly of America, Inc. v. Cafesjian

• Decision Date: 09 March 2010
• Docket Number: Civil Action No. 08-255 (CKK).
• Citation: 692 F. Supp.2d 20
• Parties: The ARMENIAN ASSEMBLY OF AMERICA, INC., et al., Plaintiffs, v. Gerard L. CAFESJIAN, et al., Defendants.
• Court: U.S. District Court — District of Columbia

692 F. Supp.2d 20

The ARMENIAN ASSEMBLY OF AMERICA, INC., et al., Plaintiffs, v. Gerard L. CAFESJIAN, et al., Defendants.

Civil Action No. 08-255 (CKK).

United States District Court, District of Columbia.

March 9, 2010.

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.

Nancy L. Berardinelli-Krantz, Thomas F. Cullen, John B. Williams, William G. Laxton, Jr., Jones Day, Washington, DC, for Defendants.

MEMORANDUM OPINION

COLLEEN KOLLAR-KOTELLY, District Judge.

This is the second of three related cases pending before this Court that arises out of a very bitter and very unfortunate dispute between Plaintiffs The Armenian Assembly of America, Inc. (the "Assembly") and The Armenian Genocide Museum & Memorial, Inc. ("AGM & M") (collectively, "Plaintiffs") and Defendants Gerard L. Cafesjian ("Cafesjian"), John J. Waters Jr. ("Waters Jr."), The Cafesjian Family Foundation, Inc. ("CFF"), and the TomKat Limited Partnership ("TomKat") (collectively, "Defendants"), relating to the construction of an Armenian genocide museum and memorial in Washington, D.C. In the above-captioned case, Plaintiffs have asserted eleven separate claims against Defendants, including breach of fiduciary duty, misappropriation of trade secrets, and breach of contract. Defendants have asserted nine separate counterclaims against Plaintiffs and Counterdefendant Hirair Hovnanian ("Hovnanian"), including breach of contract and defamation. On February 19, 2009, the Court denied Plaintiffs' partial motion to dismiss the counterclaims for unjust enrichment, constructive trust, and defamation. See 43 Mem. Op. (Feb. 19, 2009).

Currently pending before the Court in this action are the parties' motions for summary judgment. Plaintiffs/Counterdefendants have filed a66 Motion for Partial Summary Judgment regarding AGM & M's claim for breach of fiduciary duty against Waters Jr. and Cafesjian (Claim I) and Defendants' counterclaim for defamation against the Assembly and Hovnanian (Counterclaim VIII). Defendants have filed a68 Motion for Summary Judgment regarding all eleven of Plaintiffs' claims. Also pending before the Court is a71 Motion to Compel the Production of Documents, filed by Plaintiffs-Counterdefendants against Defendants-Counterplaintiffs in this and the related actions, which were consolidated for purposes of discovery only.¹ The Court shall address that motion herein.

For the reasons explained below, the Court shall GRANT Defendants' motion for summary judgment with respect to Claims IV and V for breach of contract and breach of duty of good faith and fair dealing by TomKat and Waters Jr. and GRANT-IN-PART Defendants' motion as to Claim I for breach of fiduciary duty to AGM & M with respect to actions occurring before February 15, 2005, on the ground that they are time-barred. The Court shall DENY the motion in all other respects. The Court shall also GRANT Plaintiffs' motion for summary judgment with respect to Counterclaim VIII for defamation and DENY the motion in all other respects. The Court shall also GRANTIN-PART Plaintiffs' motion to compel with respect to certain documents relating to the formation of the United States-Armenia Public Affairs Committee ("USAPAC"), the organizational structure and finances of CFF and GLC Enterprises, Inc., and the use of mailing lists and other databases by the Armenian Reporter newspaper. The Court shall deny Plaintiffs' motion to compel in all other respects.

I. BACKGROUND

The following facts are drawn from the summary judgment record assembled by the parties and the parties' statements of material facts that are not in dispute.²

A. The Armenian Assembly of America and the Origins of the AGM & M

The Armenian Assembly of America (the "Assembly") is an Armenian-American advocacy group that is incorporated in the District of Columbia as a non-profit corporation. Pls.' Stmt. ¶ 6. In the mid-1990s, the Assembly received a pledge from Anoush Mathevosian, an Armenian-American philantropist, for the purpose of constructing a permanent museum to the victims and survivors of the Armenian genocide.³ Pls.' Stmt. ¶ 7. Ms. Mathevosian's pledge was initially for $3.0 million but was subsequently raised to $3.5 million. Defs.' Resp. Stmt. ¶ 7. Encouraged by Ms. Mathevosian's generosity, the Assembly began exploring possible sites for the museum in Washington, D.C., and solicited donations from the Armenian-American community for the purpose of establishing and constructing the museum. Pls.' Stmt. ¶ 8. In 2000, the Assembly identified a possible site for the museum at the National Bank of Washington building (the "Bank Building") at 14th and G Streets, N.W. (619 14th Street, N.W.), Washington, D.C., located just a few blocks away from the White House. Pls.' Stmt. ¶ 9.

At some point in the late 1990s, Cafesjian became involved with the Assembly's efforts to create an Armenian genocide museum.⁴ With the help of donations from Cafesjian (through CFF), the Assembly purchased the Bank Building in early 2000. Pls.' Stmt. ¶ 9. As part of the Bank Building transaction, which involved both grants and loans from CFF, the Assembly executed a promissory note to CFF for $500,000.⁵ See Defs.' Br., Ex. 71 (3/23/00 Letter from Assembly to Cafesjian) at 1; Pls.' Br., Ex. 5 (R. Kaloosdian Aff.) ¶ 9. According to Robert Kaloosdian, a founding member and long-time officer and Trustee of the Assembly, the Assembly eventually came to understand that this note would be forgiven. See Pls.' Br., Ex. 5 (R. Kaloosdian Aff.) ¶ 9. Defendants, however, dispute this. See Defs.' Br., Ex. 1 (Waters Jr. Aff.) ¶ 86. CFF and the Assembly also agreed to include a memorial named after Cafesjian as part of the museum project. See Defs.' Br., Ex. 71 (filed under seal).

Subsequent to the purchase of the Bank Building, Cafesjian, through an affiliated entity called The TomKat Limited Partnership ("TomKat LP"), acquired several lots adjacent to the Bank Building. Pls.' Stmt. ¶ 10. Cafesjian ultimately decided to donate these lots to the museum project.⁶ Cafesjian wanted the museum project to be run by an independent entity, and the Assembly eventually decided to create one. Pls.' Stmt. ¶ 11; Cafesjian Defs.' Resp. Stmt. ¶ 11.⁷ In October 2003, the Armenian Genocide Museum & Memorial, Inc. ("AGM & M") was incorporated as a District of Columbia nonprofit corporation. Pls.' Stmt. ¶ 12. The AGM & M was established for the purpose of constructing, owning, operating, and maintaining a permanent museum and memorial to the victims and survivors of the Armenian genocide. Pls.' Stmt. ¶ 2.

The Articles of Incorporation and By-Laws of AGM & M were ratified and adopted, respectively, pursuant to a Unanimous Written Consent of the Initial Trustees of AGM & M executed on October 30, 2003. Pls.' Stmt. ¶ 13. The parties agree that these three documents—the Articles, the By-Laws, and the Unanimous Written Consent—govern the operation of and organization of AGM & M. Pls.' Stmt. ¶ 14. Pursuant to the By-Laws and Articles, AGM & M has no members. Defs.' Br., Ex. 3 (By-Laws) § 2.17. The Articles provide that AGM & M's "affairs shall be managed and controlled by the Board of Trustees." Pls.' Stmt. ¶ 15. The Board of Trustees serves as the Board of Directors for purposes of the D.C. Non-Profit Corporations Act. Defs.' Br., Ex. 3 (By-Laws) § 2.2.

Under the Articles of Incorporation, there were four initial Trustees: Cafesjian, Hirair Hovnanian, Anoush Mathevosian, and Robert Kaloosdian. See Pls.' Br., Ex. 1 (Articles of Incorporation of AGM & M) (hereinafter, "Articles"). Each initial Trustee was designated as a representative of one of the four major donors to AGM & M: CFF (designating Cafesjian), Hirair Hovnanian (designating himself), Anoush Mathevosian (designating herself), and the Assembly (designating Kaloosdian). See Defs.' Br., Ex. 4 (Unanimous Written Consent) (hereinafter, "UWC") at 1-2. Pursuant to the By-Laws, the terms of these initial Trustees is perpetual, and each initial donor may appoint successor Trustees in the event that the initial Trustees are no longer able to serve. See Defs.' Br., Ex. 3 (By-Laws) § 2.4. A donor may elect one Trustee for every $5 million contributed to AGM & M (or elect a single Trustee to control as many votes as the donor has contributed in multiples of $5 million). Id. § 2.5. Unless otherwise provided in the By-Laws or the Articles, all questions are to be decided by an 80% vote of the Trustees at a meeting where a quorum is present. Id. § 2.7. Persons representing one-half of the aggregate eligible votes constitute a quorum at a duly-called meeting of the Board of Trustees. Id. § 2.6. The By-Laws also establish notice requirements that must be followed to properly convene a Board meeting: Trustees much each be given personal notice of the time and place of the meeting at least five, and no more than thirty, days in advance. Pls.' Stmt. ¶ 17.

As of October 31, 2003, Cafesjian became the Chairman and President of AGM & M and Waters Jr. became the Secretary and Treasurer of AGM & M. Pls.' Stmt. ¶¶ 20-21. Hirair Hovnanian became Vice Chairman of AGM & M. See UWC at 2.

B. The Grant Agreement & Transfer Agreement

On November 1, 2003, the Assembly executed a Grant Agreement with CFF and Cafesjian.⁸ Pls.' Stmt. ¶ 22; see Pls.' Br., Ex. 12 (Grant Agreement). The Grant Agreement is signed by Hirair Hovnanian and Peter Voskibian on behalf of the Assembly and by Cafesjian on behalf of himself and CFF. See Grant Agreement at 11. The Grant Agreement memorialized CFF/Cafesjian's $3.5 million donation to the Assembly in 2000 for the purchase of the Bank Building (the "First Grant"). It states that the Assembly shall use the First Grant funds solely to purchase the Bank Building, pay any related transaction costs, and construct the "Gerard L. Cafesjian Memorial," which is described in section 3.2 of the Grant...