Cauderlier & Associates, Inc. v. Zambrana, Civil Action No. 05-1653(JMF).

• Decision Date: 28 December 2007
• Docket Number: Civil Action No. 05-1653(JMF).
• Parties: CAUDERLIER & ASSOCIATES, INC., Plaintiff, v. Sergio ZAMBRANA, Defendant/Third-Party Plaintiff, v. Jean Claude Cauderlier and La Ruche, Inc., Third-Party Defendants.
• Court: U.S. District Court — District of Columbia

527 F.Supp.2d 142

CAUDERLIER & ASSOCIATES, INC., Plaintiff, v. Sergio ZAMBRANA, Defendant/Third-Party Plaintiff, v. Jean Claude Cauderlier and La Ruche, Inc., Third-Party Defendants.

Civil Action No. 05-1653(JMF).

United States District Court, District of Columbia.

December 28, 2007.

Robert Lamar Green, Jr., James Brian Boles, Suzanne R. Clement, Howrey Simon Arnold & White, LLP, Washington, DC, for Plaintiff/Third-Party Defendants.

Jeffrey Marc Hamberger, O'Reilly & Mark, P.C., North Bethesda, MD, for Defendant/Third-Party Plaintiff.

MEMORANDUM OPINION

JOHN M. FACCIOLA, United States Magistrate Judge.

Currently pending before me is Motion of Cauderlier & Associates, Inc. for Summary Judgment ("Motion"). For the reasons stated herein, the Motion will be granted in part and denied in part.

BACKGROUND

Plaintiff Cauderlier & Associates, Inc. ("CAI") asks this court to rule, as a matter of law, that: (1) Sergio Zambrana's counterclaims have been extinguished by the statute of limitations; (2) Zambrana has no ownership interest in CAI; and (3) Zambrana has no right to an accounting or a monetary judgment from CM.

STATEMENT OF FACTS NOT IN DISPUTE

1. CAI was incorporated on August 19, 1999, with the Board of Directors consisting of Jean Claude Cauderlier, Zambrana, and James Powers.

2. On that day, the Directors of CAI issued a Unanimous Written Consent in Lieu of the Organizational Meeting of the Board of Directors of Cauderlier & Associates, Inc. ("1999 CM Written Consent"), attached as Exh. D to Exh. 1 of the Motion.

3. The 1999 CM Written Consent was signed by Cauderlier, Zambrana, and Powers. Id. at 9.

4. Pursuant to the 1999 CAI Written Consent, Cauderlier was elected President/Treasurer, Powers was elected Secretary, and Zambrana was. elected Vice President/Assistant Secretary. Id. at 2.

5. CAI was authorized to issue 500 shares of common stock to Cauderlier in exchange for $60,000. Id. at 2. No other shares were authorized to be issued. Id.

6. Cauderlier was authorized to purchase 1035-1039 31st Street, N.W., in Washington, D.C. (the "Property") for $1,100,001. Id. at 3.

7. On August 20, 1999, Cauderlier obtained a promissory note from La Ruche, Inc. ("La Ruche") for $60,000. Jean-Claude Cauderlier Promissory Note, attached as Exh. C to Exh. 1 of the Motion. This was used by Cauderlier to purchase 500 common shares of CAI, pursuant to the 1999 CM Written Consent. Cauderlier Decl. ¶¶ 5-6, attached as Exh. 1 to the Motion.

8. On November 19, 1999, CAI provided a deposit of $55,000 to Yes, Inc. ("Yes!"), the owner of the Property, for the purchase of the Property. See Official Check, attached as Exh. G to Exh. 1 of the Motion; Cauderlier Decl. 118.

9. On January 20, 2000, Zambrana gave a check to Cauderlier, payable to La Ruche, for $25,000, dated January 21, 2000 (the "Check"). Cauderlier Decl. ¶ 13; Zambrana Dep. at 33, attached as Exh. 2 to the Motion; Zambrana Aff. ¶ 2, attached as Exh. A to defendant's Opposition to Motion for Summary Judgment of Cauderlier & Associates, Inc. ("Opposition").

10. CAI closed the purchase of the Property on January 21, 2000. Cauderlier Decl. ¶ 10. The purchase price was $1,020,000. Powers Letter to Naithani dated Dec. 28, 1999, attached as Exh. I to Exh. 1 of the Motion. Present at the closing were Cauderlier, Zambrana, and Powers. Cauderlier Decl. ¶ 12; Naithani Aff. ¶ 8, attached as Exh. 13 to the Opposition.

11. Part of the price was paid with a loan of $965,000 secured from the Small Business Administration ("SBA"), via the Money Store Investment Corp., with CM and La Ruche as co-borrowers. Application for Business Loan, attached as Exh. H to Exh. 1 of the Motion; Unconditional Guarantee, attached as. Exh. J to Exh. 1 of the Motion.

12. On August 24, 2000, in a Written Consent in Lieu of an Annual Meeting of the Shareholders of Cauderlier & Associates, Inc., Cauderlier was elected Director of the Corporation; that same day, in a Written Consent in Lieu of an Annual Meeting of the Board of Directors of Cauderlier & Associates, Inc. (together, the "2000 CAI Written Consents"), Cauderlier was elected President/Treasurer, Secretary, and Vice President of CAI.2000 CAI Written Consents, attached as Exh. E to Exh. 1 of the Motion.

13. The 2000 CAI Written Consents were signed only by Cauderlier. Id.

14. On June 23, 2004, La Ruche issued Certificate No. 10 to Zambrana for 10 shares in La Ruche. Pursuant to a Consent to Action in Lieu of a Special Meeting of the Shareholders of La Ruche, Inc., signed by Cauderlier and Zambrana, Certificate No. 10 was a replacement of Certificate No. 9, issued in January 2000, which "was never received by Mr. Zambrana and is lost." Exh. K to Exh. 1 of the Motion. Zambrana now argues that Certificate No. 9 was issued long before January 2000. Opposition at 13-14; Zambrana Dep. at 79-81.

I. Statute of Limitations

On October 24, 2005, Zambrana filed his Answer and Counterclaim ("Answer"), which included counterclaims for: (1) an accounting of the assets owned by CAI; (2) a declaratory judgment determining "his ownership share in the assets of CAI and/or in the Building"; and (3) under a theory of unjust enrichment, "a monetary judgment equal to the value of his share in the assets of CAI and/or in the Building." Answer at 6-12. CAI argues in its Motion that these counterclaims have been extinguished by the District of Columbia's three-year statute of limitations.¹ Motion at 6-8.

A cause of action does not accrue "until the [claimant] knows or by the exercise of reasonable diligence should know of the injury, its cause in fact and some evidence of wrongdoing." Brown v. District of Columbia, 853 A.2d 733, 737 n. 4 (D.C.2004) (internal quotation and citation omitted).² Zambrana's counterclaims are based, generally, on two allegations: (1) he obtained "an ownership interest in CAI and/or the Building (to be) owned by CAI" in return for the Check; and (2) La Ruche was used by Cauderlier as the "alter ego" of CAI for purposes of purchasing the Property. Answer at 7-10

a. Zambrana's Ownership in CAI and/or the Property

In regard to Zambrana's allegation that he bought an ownership interest in CAI and/or the Property in exchange for the Check, CAI asserts that Zambrana's counterclaims accrued at a meeting in either February or March 2000 (the "Meeting"), at which time his "demands for CAI shares were rebuffed." Motion at 7-8. According to Cauderlier, Zambrana "refused [at the Meeting] to accept my offer of the 10 percent of La Ruche in exchange for $25,000 [and instead] asked for interest in CAI or the land. I told him no." Cauderlier Decl. ¶ 17. Cauderlier also asserts that Zambrana was advised at the Meeting to retain his own attorney. Id. at 14, Powers Dep. at 42, attached as Exh. 3 to the Motion.

Powers also recalls that Cauderlier refused to issue Zambrana an interest in CAI at the Meeting. Powers Dep. at 66. According to Powers, however, this refusal was the starting point of a negotiation that culminated in an understanding that Zambrana would receive an interest in both La Ruche and CAI. Id. at 68-69. Despite this broad understanding, however, Powers recalls that there was not a comprehensive agreement concerning the "quantification of stock to be granted." Id. at 70.

Zambrana, for his part, does not recall the Meeting. Zambrana Dep. at 63. He does deny, however, that Cauderlier refused a demand that Zambrana be given shares in CAI. Id. at 63. He instead asserts that he was unaware until 2004 that his ownership interest in CAI was in dispute. According to Zambrana, he was promised an ownership interest in CAI by Cauderlier at the time he submitted the $25,000 check. Zambrana Aff. ¶ 10. Cauderlier "stated in the presence of [third parties] before and after settlement that [Zambrana was] an owner of CAI." Id. at ¶ 14. Cauderlier "initially and consistently" stated that the Property was being purchased by both him and Zambrana. Naithani Aff. ¶ 21. Zambrana, "in [his] capacity as an owner of CAI[,] received many telephone calls" regarding payments from CAI. Zambrana Aff. ¶¶ 16-17. He asserts that it was not until February 17, 2004, that he became aware that his ownership interest in CAI was disputed by Cauderlier. Opp. at 17; Zambrana Dep. at 57-58. On that day, Cauderlier asserted in a letter that he was "the sole shareholder" of CAL Id.

Determining when Zambrana's counterclaims concerning his ownership in CAI accrued requires the untangling of a web of competing recollections. If Cauderlier is correct that he flatly refused to extend ownership of CAI to Zambrana at the Meeting, it seems clear that the counterclaims would have accrued at that time and would now be barred. On the other hand, if Zambrana is to be believed that there was an agreement to grant him ownership in CAI and that he was not aware until 2004 that this was disputed by Cauderlier, the counterclaims would not be barred by the three-year limitation period. Finally, Powers' description of events—that there was agreement at the Meeting that Zambrana would become an owner of CAI, but not over the specific details—supports Zambrana's assertions, yet raises the question of whether, for purposes of triggering the three-year limitation period, Zambrana should have been on notice at the Meeting that his ownership of CAI was in dispute.

Such a factual dispute is to be resolved by the finder of fact. "Although what constitutes the accrual of a cause of action is a question of law, the specific moment when accrual occurs is usually a jury question." Smith v. Brown & Williamson Tobacco Corp., 3 F.Supp.2d 1473, 1475 (D.D.C.1998) (citing Diamond v. Davis, 680 A.2d 364, 370 (D.C.1996)). A court may dismiss a claim on statute of limitations grounds only if "no reasonable person could disagree on the date" on which the cause of action accrued. Kuwait Airways Corp. v. American Security Bank, N.A., 890 F.2d 456, 463 n. 11 (D.C.Cir. 1989). A reasonable person could, after...