Capitol Servs. Mgmt. v. Vesta Corp.
| Docket Number | Civ. Action 17-1756 (EGS) |
| Decision Date | 25 August 2023 |
| Parties | CAPITOL SERVICES MANAGEMENT INC., Plaintiff, v. VESTA CORPORATION, Defendant. |
| Court | U.S. District Court — District of Columbia |
Capitol Services Management Inc. (“CSMI” or “Plaintiff”) brought this action against Vesta Corporation (“Vesta” or “Defendant”) on August 28, 2017, alleging: (1) intentional interference with business relations; and (2) tortious interference with a reasonable expectation of prospective economic advantage. See Compl., ECF No. 1 ¶¶ 36-51.[1]Following the reversal of this Court's dismissal of the case pursuant to Federal Rule of Civil Procedure 12(b)(6), see Capitol Servs. Mgmt. Inc. v Vesta Corp. (“CSMI II”), 933 F.3d 784, 787 (D.C. Cir. 2019); the parties engaged in discovery regarding the statute of limitations in the case, see Minute Order (Nov. 18, 2019).
Pending before the Court is Vesta's Motion for Summary Judgment, see Def. Vesta Corp.'s Mot. Summ. J. on Statute of Limitations, ECF No. 29. Upon careful consideration of the motion, the opposition, and reply thereto, the applicable law, and the entire record herein, the Court hereby GRANTS Defendant's Motion for Summary Judgment.
On May 25, 2006, the Park Southern Neighborhood Corporation (“PSNC”) acquired the Park Southern Apartments in the District of Columbia (the “District”). Pl.'s Counter-Statement of Material Facts as to Which There is No Genuine Issue (“SMF”), ECF No. 37-1 ¶ 1 (citing Compl., ECF No. 1 ¶ 5). At the same time, PSNC executed a “First Deed of Trust” (“Deed of Trust” or “Deed”) on the property. Id. ¶ 2 (citing Compl., ECF No. 1 ¶ 5). The Deed of Trust documented the more than $3 million that PSNC owed the District and granted the District certain rights as a beneficiary of the Deed. Id. ¶¶ 3-4 (citing Compl., ECF No. 1 ¶¶ 6-7).
PSNC a notice of default and provided PSNC 30 days to cure. Id. ¶ 5 (citing Compl., ECF No. 1 ¶ 26). Because PSNC could not cure the default in that time, DHCD took control of the Park Southern Apartments on May 2, 2014 pursuant to the Deed of Trust's default procedure. Id. ¶ 6 (citing Compl., ECF No. 1 ¶¶ 27-28).
Before the 2014 events discussed supra, PSNC contracted with Vesta to provide property management services at the Park Southern Apartments. Id. ¶ 7 (citing Compl., ECF No. 1 ¶ 8). In March 2014, PSNC terminated that contract and entered into a new property management contract with CSMI. Id. ¶ 8 (citing Compl., ECF No. 1 ¶¶ 8-9).
On March 19, 2014, Rowena Scott (“Ms. Scott (PSNC)”), PSNC's owner, forwarded to Monica Ray (“Ms. Ray (CSMI)”), the senior vice president of operations at CSMI, an email from Chuck Moran (“Mr. Moran (Vesta)”) disputing PSNC's termination of Vesta's property management contract. Id. ¶ 17 (citing Ex. 4, ECF No 29-3 at 161). CSMI later admitted in a Rule 30(b)(6) deposition in this case that, at the time, it knew that Vesta had been the property manager of the Park Southern Apartments before CSMI's contract began in March 2014. Id. ¶ 19 (citing Ex. 3, ECF No. 29-3 at 51).
Then, on April 2, 2014, Mr. Moran (Vesta) sent an email to residents at the Park Southern Apartments stating that “Vesta q Management is the only management company approved by the Department of Community Housing and Development for the Park Southern Apartment Complex.” Id. ¶ 27 (citing Ex. 11, ECF No. 29-3 at 186; Ex. 3, ECF No. 29-3 at 59). CSMI was aware of the email message on the date it was sent and wrote PSNC's response letter on April 4, 2014. Id. ¶¶ 28-29 (citing Ex. 3, ECF No. 293 at 59, 61; Ex. 12, ECF No. 29-3 at 188; Ex. 13, ECF No. 29-3 at 191).
CSMI was also aware in April 2014 that Ms. Scott (PSNC) was concerned that Vesta was “working behind the scene” to regain management of the Park Southern Apartments. Id. ¶ 32 (citing Ex. 14, ECF No. 29-3 at 194-95).
Property management shifted again when DHCD took control of the Park Southern Apartments. The Deed of Trust granted the District the authority to “take and maintain full control of the property in order to perform all acts necessary and appropriate for the operation and maintenance thereof, including but not limited to . . . the execution or termination of contracts providing for the management and maintenance of the property.” Id. ¶ 10 (citing Compl., ECF No. 1 ¶ 33). Thus, when DHCD assumed control of the Park Southern Apartments in May 2014, it entered into an “emergency contract” with Vesta. Id. ¶ 11 (citing Compl., ECF No. 1 ¶ 28). DHCD also terminated CSMI's contract without the required notice. Id. ¶ 25 (citing Ex. 3, ECF No. 29-3 at 70). Pursuant to the emergency contract, Vesta assumed management of the property on May 3, 2014. See id. ¶ 12 (citing Compl., ECF No. 1 ¶ 29).
On May 21, 2014, Phinis Jones (“Mr. Jones (CSMI)”), CSMI's owner, sent an email to Michael Kelly (“Mr. Kelly (DHCD)”), an employee at DHCD, in which he stated that he was “deeply concerned about developments to date that have resulted in the interference of [CSMI's] written property management agreement with Park Southern Apartments.” Id. ¶ 20 (citing Ex. 5, ECF No. 29-3 at 164). He also asked for “the specific legal authorization for the ‘emergency' procurement, which is the basis that [DHCD] stated Vesta was retained” and a copy of DHCD's contract with Vesta. Id. ¶¶ 20-21 (citing Ex. 5, ECF No. 29-3 at 164). Thus, by no later than May 23, 2014, CSMI knew that DHCD and Vesta had executed an emergency contract giving management of the Park Southern Apartments to Vesta. Id. ¶ 22 (citing Ex. 3, ECF No. 29-3 at 73).
At no point did CSMI learn the basis for DHCD's execution of the emergency contract with Vesta. Id. ¶ 24 (citing Ex. 5, ECF No. 29-3 at 164; Ex. 3, ECF No. 29-3 at 72). Rather, as CSMI's corporate designee later testified, as of May 21, 2014, CSMI believed that the emergency used to justify the contract with Vesta was pretext. Id. ¶ 31 (citing Ex. 3, ECF No. 29-3 at 73). CSMI also knew by August 13, 2014 that individuals at DHCD c; and Vesta had preexisting relationships. Id. ¶ 36 (citing Ex. 10, ECF No. 293 at 183-84).
On July 24, 2014, CSMI filed an action against the District in the Superior Court of the District of Columbia (“Superior Court”). Id. ¶ 13 (citing Ex. 1, ECF No. 29-3). CSMI alleged several claims: breach of contract, breach of covenant of good faith and fair dealing, tortious interference with contractual relations, tortious interference with business opportunity, and civil conspiracy. See Ex. 1, ECF No. 29-3 at 2.
In July 2016, during discovery in the Superior Court case, CSMI deposed Milton Bailey (“Mr. Bailey (DHCD)”), an employee at DHCD, who CSMI claims “‘revealed considerable evidence' of Vesta's alleged tortious interference” during his deposition. CSMI II, 933 F.3d at 788 (citation omitted).
In May 2017, the Superior Court granted summary judgment against CSMI. Id. The court concluded that the District was entitled to sovereign immunity and that CSMI had failed to make its prima facie case of tortious interference. Id.
On August 28, 2017, CSMI filed the Complaint in this case against Vesta, alleging: (1) intentional interference with business relations; and (2) tortious interference with a reasonable expectation of prospective economic advantage. See a Compl., ECF No. 1 ¶¶ 36-51. Vesta moved to dismiss the Complaint in December 2017. See generally Vesta's Mem. in Supp. of Mot. Dismiss, ECF No. 6. Vesta argued in part that CSMI's claims were time-barred because the three-year statute of limitations expired before CSMI filed its Complaint. Id. at 1. This Court granted Vesta's Motion to Dismiss, concluding that “CSMI knew or had reason to know about Vesta's alleged tortious conduct more than three years before it filed its claim in this Court.” Capitol Servs. Mgmt., Inc. v. VESTA Corp. (“CSMI I”), 318 F.Supp.3d 265, 270 (D.D.C. 2018).
CSMI appealed. Notice of Appeal, ECF No. 11. The Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) reversed this Court's judgment. CSMI II, 933 F.3d at 795. In so doing, the D.C. Circuit drew several conclusions. First, it observed that there was no dispute that Id. at 792. Second, it noted that “[t]here is also no meaningful dispute that Capitol Services lacked ‘actual notice' of Vesta's wrongdoing as of that date.” See id. Third, the D.C. Circuit rejected CSMI's claim that it did not have notice of its claims against Vesta until its deposition of Mr. Bailey (DHCD) in July 2016. See id. at 793. And finally, as relevant here, it concluded:
[A]ll that the limited record shows at this Rule 12(b)(6) stage is that Capitol Services was not on actual or inquiry notice in either May or July of 2014, but was on inquiry notice at least by October 2014. The record is inconclusive as to Capitol Services' knowledge about Vesta's role prior to August 28, 2014- three years before this suit against Vesta was filed. When during that intervening period Capitol Services had inquiry notice of Vesta's potential role thus is an open factual question that cannot be resolved at this early juncture.
Id. The D.C. Circuit then remanded the case to this Court for further proceedings. Id. at...
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