Mobilizegreen, Inc. v. Cmty. Found. for the Capital Region

• Decision Date: 27 January 2022
• Docket Number: No. 19-CV-0861,19-CV-0861
• Citation: 267 A.3d 1019
• Parties: MOBILIZEGREEN, INC., Appellant, v. COMMUNITY FOUNDATION FOR THE CAPITAL REGION, Appellee.
• Court: D.C. Court of Appeals

267 A.3d 1019

MOBILIZEGREEN, INC., Appellant,

v.COMMUNITY FOUNDATION FOR THE CAPITAL REGION, Appellee.

No. 19-CV-0861

District of Columbia Court of Appeals.

Argued January 12, 2021

Decided January 27, 2022

Jeffrey D. Robinson, Washington, DC, with whom Surya Kundu was on the brief, for appellant.

Matthew W. Edwards for appellee.

Before Beckwith and Deahl, Associate Judges, and Fisher, Senior Judge.

Deahl, Associate Judge:

MobilizeGreen was an upstart charitable organization with a mission "to build the next generation of environmental leaders," particularly those from "under-represented communities." In 2011, it sought to create a national diversity internship program using funds from the United States Forest Service. Because MobilizeGreen had not been approved as a charitable organization under 26 U.S.C. § 501(c)(3), however, the Forest Service indicated it could not disperse funds directly to MobilizeGreen, which would need to engage a fiscal sponsor to receive and manage any funds. MobilizeGreen enlisted a reluctant Community Foundation for the Capital Region to serve as its fiscal sponsor for what the parties agreed would be a brief three-month period. For reasons detailed below, that fraught relationship lasted more than a year, to both parties’ chagrin.

MobilizeGreen eventually filed a lawsuit in D.C. Superior Court alleging, as is relevant here, that (1) the Community Foundation breached the parties’ agreement when it failed to transfer the fiscal sponsorship to a third party at the conclusion of the three-month arrangement, and (2) the Community Foundation breached a fiduciary duty to MobilizeGreen by mismanaging the Forest Service funds. The Community Foundation moved for summary judgment on those claims, and the trial court granted its motion. It ruled that it was MobilizeGreen, not the Community Foundation, that was contractually obligated but failed to transfer the fiscal sponsorship to a third party. The trial court also determined that the Community Foundation did not have a fiduciary relationship with MobilizeGreen, but that the extent of their relationship was limited to their contractual agreement. MobilizeGreen challenges both of those rulings on appeal, contending there were genuine disputes of material fact that precluded summary judgment as to each claim. We disagree and affirm.

I.

In 2011, MobilizeGreen was a start-up organization with a mission "to build the next generation of environmental leaders, stewards, and volunteers from under-represented communities using ... [an] innovative internship, mentorship, career coaching, and collaborative partnership model." It sought to establish an internship pilot program funded by the United States Forest Service. It was not eligible to receive the contemplated funds from the Forest Service, however, because it was not recognized as a tax-exempt charitable organization under 26 U.S.C. § 501(c)(3). To proceed with its plans, MobilizeGreen needed an established § 501(c)(3) organization to serve as its fiscal sponsor. It approached the Community Foundation to serve as that fiscal sponsor.

The Community Foundation, concerned over its ability to comply with certain government contracting and audit requirements, initially declined MobilizeGreen's request. MobilizeGreen's President and CEO, Leah Allen, persisted. In an effort to alleviate the Community Foundation's concerns, Allen proposed a temporary fiscal sponsorship arrangement, from late July through November 1, 2011. That agreement would permit the Forest Service to finalize approval of the funding, though Allen promised the Community Foundation that MobilizeGreen would either attain its § 501(c)(3) status, find an alternative sponsor, or terminate its relationship with the Community Foundation "prior to the receipt of actual funding." The Community Foundation accepted Allen's proposal.

The parties then executed a fiscal sponsorship agreement. Under the terms of the agreement, the parties agreed to create a "Sponsored Program Fund," the funds for which MobilizeGreen would "irrevocably" give to the Community Foundation to administer as a "temporary fiscal sponsor[ ]." Paragraph 4 of the agreement states the fund's sole "purpose" as "further[ing] or carry[ing] out the educational and charitable uses and purposes of the [Community] Foundation," as "specifically set forth in its articles of incorporation and bylaws."

Under Paragraph 8 of the agreement, the fiscal sponsorship was "not to exceed November 1, 2011, at which time the Organization [MobilizeGreen] will transfer to another fiscal sponsor." Shortly thereafter, the Community Foundation entered into a "Cost Share Agreement" with the Forest Service under which the Forest Service would reimburse the Community Foundation up to $252,805 for the costs of the internship program. That agreement between the Community Foundation and the Forest Service was "effective through September 30, 2012." MobilizeGreen was not a party to it.

In October 2011, prior to disbursement of any Forest Service funds, MobilizeGreen entered into a Memorandum of Understanding with a proposed replacement fiscal sponsor, Social and Environmental Entrepreneurs. The Community Foundation "agreed, pending Forest Service approval, to allow [MobilizeGreen] to shift fiscal sponsorship to" that new fiscal sponsor. This transfer could not be completed, however, without the Forest Service's consent. This was because the Cost Share Agreement between MobilizeGreen and the Community Foundation was subject to the Anti-Assignment Act, which provides that a government contract, or any interest under one, cannot be transferred from one party to another unless the government first consents to the transfer. 41 U.S.C. § 6305(a) ; Vermont Yankee Nuclear Power Corp. v. Entergy Nuclear Vermont Yankee, LLC , 683 F.3d 1330, 1339 (Fed. Cir. 2012) ("[G]overnment may consent to or waive any objections it may have to assignments.") (interpreting prior codification of § 6305(a) ).

The Forest Service did not provide the required consent because, perhaps among other reasons, nobody asked it to until many months later. It was not until the following March that Allen finally emailed the Forest Service and requested its consent to the transfer. She explained in her email that the Community Foundation had already agreed to transfer the fund and fiscal sponsorship to a substitute sponsor. Nonetheless, the Forest Service denied that initial transfer request. Some months later, around July 2012, the Forest Service agreed to transfer the grant to another fiscal sponsor effective October 1, 2012, the day after the Cost Share Agreement between it and the Community Foundation expired. The Community Foundation thus remained as fiscal sponsor through September 30, 2012.

Two years later, MobilizeGreen sued the Community Foundation in the Superior Court of the District of Columbia. It claimed (1) breach of contract, owing to the Community Foundation's failure to transfer the fiscal sponsorship to a substitute party, and (2) breach of fiduciary duty, relating to the Community Foundation's alleged mismanagement of Forest Service funds. Following years of litigation—during which the case was removed to federal court and then remanded to the Superior Court¹ —the trial court granted the Community Foundation's motion for summary judgment as to those claims. It determined that it was MobilizeGreen, not the Community Foundation, that had a contractual obligation to effectuate the transfer of the fiscal sponsorship to a substitute party, and it further held that the Community Foundation owed no fiduciary duty to MobilizeGreen. MobilizeGreen now brings this appeal challenging those rulings.²

II.

We review a trial court's grant of summary judgment de novo. Ukwuani v. District of Columbia , 241 A.3d 529, 541 (D.C. 2020). In doing so, we conduct "an independent review of the record" and apply the same standard as the trial court in considering the underlying motion. Critchell v. Critchell , 746 A.2d 282, 284 (D.C. 2000). The moving party, the Community Foundation, is entitled to summary judgment only upon demonstrating that "no genuine issue of material fact remains for trial" and that judgment is warranted "as a matter of law." Phenix-Georgetown, Inc. v. Charles H. Tompkins Co. , 477 A.2d 215, 221 (D.C. 1984). "[W]e examine all evidence in the light most favorable to" the non-moving party, MobilizeGreen. Cain v. Reinoso , 43 A.3d 302, 307 (D.C. 2012). We will reverse a grant of summary judgment if the record would permit a reasonable fact-finder to properly render a verdict in the non-moving party's favor. Id.

A.

We begin with MobilizeGreen's breach of contract claim. MobilizeGreen contends there were genuine issues of material fact regarding whether the Community Foundation failed to uphold a contractual obligation to transfer the fiscal sponsorship to a third party. More specifically, it contends that a reasonable jury could have concluded the Community Foundation breached the fiscal sponsorship agreement by failing to obtain the Forest Service's consent to transfer the sponsored fund and the fiscal sponsorship to a replacement sponsor by the November 1, 2011, deadline. We disagree. Instead, we agree with the trial court that it was MobilizeGreen's obligation to bring about that transfer and that no reasonable jury could have concluded otherwise.

A contract's "proper interpretation, including whether or not it is ambiguous," is a question of law, subject to de novo review. District of Columbia v. Young , 39 A.3d 36, 40 (D.C. 2012). "[W]e examine the document on its face, giving the language used its plain meaning." Dyer v. Bilaal , 983 A.2d 349, 355 (D.C. 2009) (internal quotation marks omitted). The "written language" of the agreement "will govern the rights and liabilities of the parties" unless it is ambiguous or inoperative. Abdelrhman v. Ackerman , 76 A.3d 883, 888 (D.C. 2013) (citation and internal quotation marks omitted).

The fiscal...