Jericho Baptist Church Ministries, Inc. v. Jericho Baptist Church Ministries, Inc.

• Decision Date: 09 December 2016
• Docket Number: Case No. 16-cv-00647 (APM)
• Citation: 223 F.Supp.3d 1
• Court: U.S. District Court — District of Columbia
• Parties: JERICHO BAPTIST CHURCH MINISTRIES, INC. (DISTRICT OF COLUMBIA), Plaintiff, v. JERICHO BAPTIST CHURCH MINISTRIES, INC. (MARYLAND), et al., Defendants.

223 F.Supp.3d 1

JERICHO BAPTIST CHURCH MINISTRIES, INC. (DISTRICT OF COLUMBIA), Plaintiff,

v.JERICHO BAPTIST CHURCH MINISTRIES, INC. (MARYLAND), et al., Defendants.

Case No. 16-cv-00647 (APM)

United States District Court, District of Columbia.

Signed December 9, 2016

Donald M. Temple, Donald M. Temple, P.C., Washington, DC, for Plaintiff.

Dennis Whitley, III, Shipley & Horne, P.A., Largo, MD, for Defendants.

MEMORANDUM OPINION AND ORDER

Amit P. Mehta, United States District Judge

I. INTRODUCTION

This case is the latest in a series of actions filed in federal and state courts concerning control over the corporate identity and assets of Jericho Baptist Church Ministries, Inc. ("Church"). Plaintiff, Jericho Baptist Church Ministries, Inc. (DC) ("Jericho DC"), claims that, on March 15, 2009, a group of its members wrested control over Jericho DC by surreptitiously reconstituting its Board of Directors and then, 18-months later, merging Jericho DC into a new Maryland-based entity, Defendant Jericho Baptist Church Ministries, Inc. (Maryland) ("Jericho Maryland"). The individual Defendants—Denise Killen, Clifford Boswell, Gloria McClam-Magruder, Clarence Jackson, and Dorothy Williams ("Individual Defendants")—are alleged to have planned the takeover and then become Board members of the newly formed Jericho Maryland. Plaintiff initially filed this lawsuit in D.C. Superior Court, alleging a variety of state and federal claims and seeking both monetary and injunctive relief. The Individual Defendants and Defendant Jericho Maryland (collectively, "Defendants") removed this suit to federal court. This matter is before the court on Defendants' Motion to Dismiss.

This court does not write on a clean slate. Plaintiff's central allegation in this case—that the Individual Defendants wrongfully reconstituted Jericho DC's Board of Directors in 2009—has been fully and finally adjudicated by the District of Columbia courts. In October 2013, a group of Church members loyal to the deposed leadership of Jericho DC filed suit in D.C. Superior Court. See George v. Jackson , No. 7115–13, 2015 WL 12601903 (D.C. Super. Ct. July 7, 2015), aff'd , 146 A.3d 405 (D.C. 2016). Defendants in this case were the defendants in George . Following a three-day bench trial, The Honorable Stuart G. Nash found that Jericho DC's Board of Directors had been improperly reconstituted and that the newly constituted board's actions—including the decision to merge into Jericho Maryland—were invalid. Judge Nash ordered broad equitable relief. He barred the defendants from exercising ownership or control over any corporate assets of Jericho Maryland that formerly belonged to, or derived from, the corporate assets of Jericho DC. He also declared that henceforth Jericho DC's Board of Directors would consist of those still-living individuals who were members of Jericho DC's Board prior to its improper reconstitution. As a consequence of Judge Nash's order, Jericho DC re-established itself as a corporation in good standing under District of Columbia law. On September 22, 2016, the D.C. Court of Appeals affirmed Judge Nash's findings and judgment in full. See George , 146 A.3d 405.

The litigation in George resolves some of the grounds for dismissal advanced by Defendants in this case. In light of the findings and holdings in those prior proceedings, the court concludes it has personal jurisdiction over Defendants; this venue is proper; Plaintiff has capacity to sue; and Defendants' challenges to Plaintiff's common law conversion and fraud claims are without merit. As to those issues not resolved by George , the court concludes Plaintiff has stated plausible claims for relief under both federal and state law. Additionally, the court declines to transfer this matter. Thus, Defendants' Motion to Dismiss is denied in full.

II. DISCUSSION

The court need not provide a full recitation of the allegations here. The D.C. Court of Appeals' published decision summarizes Judge Nash's factual findings, and those findings largely mirror the Amended Complaint's allegations in this case. Compare George , 146 A.3d at 410–12, with Am. Compl., ECF No. 8 [hereinafter Am. Compl.], ¶¶ 6–69. Moreover, the court writes primarily for the parties, who are intimately familiar with this case. Consequently, rather than repeat Plaintiff's allegations at length, the court will refer to specific allegations only as is necessary to resolve the various arguments Defendants assert.

A. Jurisdiction and Venue

1. Personal Jurisdiction

A court has personal jurisdiction over an individual if that individual has "certain minimum contacts with [the forum] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Int'lShoe Co. v. Washington , 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) (internal quotation marks omitted). Where the court's subject-matter jurisdiction is predicated on a federal question, as here, the plaintiff must "rely on D.C. law to sue nonresident defendants, since no federal long-arm statute applies." See Edmond v. U.S. Postal Serv. Gen. Counsel , 949 F.2d 415, 424 (D.C. Cir. 1991). Defendants first move to dismiss on the ground that this court lacks personal jurisdiction over each of them under the District of Columbia long-arm statute, D.C. Code § 13–423(a). Defs.' Omnibus Mot. to Dismiss, ECF No. 15 [hereinafter Defs.' Mot.], Defs.' Mem. in Support, ECF No. 15-1 [hereinafter Defs.' Mem.], at 6–12.

Defendant Jericho Maryland's argument is unavailing. In George , the D.C. Court of Appeals affirmed Judge Nash's conclusion that personal jurisdiction was proper because the "allegations—that Jericho Maryland merged with Jericho DC in violation of District of Columbia law—related to events that took place when the Church, which Jericho Maryland now controls, was incorporated in D.C. and thus arose directly from Jericho DC's operation as a District of Columbia corporation." 146 A.3d at 413 (internal quotation marks omitted). Accordingly, as the D.C. Superior Court and the appellate confirmed, Jericho Maryland had sufficient minimum contacts with the District to warrant exercise of personal jurisdiction over Jericho Maryland. Id. at 415. The court is persuaded by the D.C. courts' analyses and concludes that it, likewise, can exercise personal jurisdiction over Jericho Maryland under the D.C. long-arm statute.

As to the Individual Defendants, the court concludes personal jurisdiction also exists. The D.C. long-arm statute reaches the directors of a nonprofit District of Columbia corporation "where the directors were self-perpetuating and in total control of the corporation[;].... [t]he plaintiffs' allegations are that [the] directors participated in wrongful activities going to the very essence of that corporation's existence[;] ... [and] at least one of those acts [of alleged wrongdoing] ... indubitably occurred in the District." Family Fed'n for World Peace v. Moon , 129 A.3d 234, 243 (D.C. 2015). Here, as of March 15, 2009, the Individual Defendants are accused of improperly becoming board members of Jericho DC, a D.C. nonprofit corporation, Am. Compl. ¶ 3, 15–16; unlawfully merging Jericho DC into Jericho Maryland; and filing papers in the District of Columbia to reflect the merger, id. ¶¶ 28–29; George , 146 A.3d at 411. On these facts, "the[ ] directors clearly could anticipate being hauled into a District of Columbia court to account for their activities and ... doing so does not violate notions of fair play and substantial justice." Family Fed'n , 129 A.3d at 243–44 (alteration adopted).¹ Accordingly, the court has personal jurisdiction over the Individual Defendants.

2. Venue

Defendants also argue for dismissal on the ground of improper venue. Defs.' Mem. at 12. Venue is proper in a judicial district "in which a substantial part of the events or omissions giving rise to the claim" occurred. 28 U.S.C. § 1391(b)(2). That requirement is easily satisfied here. Defendants are alleged to have filed papers with an agency of the District of Columbia that "falsely represented that the Board of Trustees for Jericho DC unanimously approved" the merger with Jericho Maryland. See Am. Compl. ¶¶ 29–30. That alleged conduct is clearly a "substantial part of the events" giving rise to Jericho DC's claims.

Defendants' reliance on Ananiev v. Wells Fargo Bank, N.A. is misplaced. There, the court's conclusion that venue was improper rested, in relevant part, on the fact that "none of the alleged actions committed by the defendants occurred in the District of Columbia." 968 F.Supp.2d 123, 131 (D.D.C. 2013). The same cannot be said of the allegations contained in Plaintiff's Amended Complaint. Accordingly, the court finds that venue is proper in this judicial district.

B. Capacity to Sue

Next, Defendants argue that "[o]nly the Individual Defendants may bring suit on behalf of Plaintiff and therefore the entire complaint should be struck." Defs.' Mem. at 13. The premise for that argument is the legality of the merger.² The D.C. Court of Appeals's decision in George , however, defeats that premise. The court's affirmance of Judge Nash's judgment means that Jericho DC's Board now consists of those still-living persons who were members of its Board before March 15, 2009. They are: William A. Meadows, Dorothy L. Williams, and Joel R. Peebles. See George , 146 A.3d at 411–12. Accordingly, Defendants' contention that only the Individual Defendants may bring suit on behalf of Jericho DC fails.

C. Equitable Estoppel

Next, Defendants maintain that all Plaintiff's claims should be dismissed on the ground of "equitable estoppel." Defs.' Mem. at 19–21. As a general matter, the doctrine of equitable estoppel prevents one litigant from advancing a claim or defense against another party when that other party detrimentally altered his or her position based on the litigant's misrepresentation or omission of a material fact. See 33 CHARLES A. WRIGHT & CHARLES H. KOCH, JR., FEDERAL...