News World Communications, Inc. v. Thompsen, No. 04-CV-346.

• Citation: 878 A.2d 1218
• Decision Date: 14 July 2005
• Docket Number: No. 04-CV-346.
• Parties: NEWS WORLD COMMUNICATIONS, INC., Appellant, v. Elaine J.S. THOMPSEN, Appellee.
• Court: Court of Appeals of Columbia District

878 A.2d 1218

NEWS WORLD COMMUNICATIONS, INC., Appellant, v. Elaine J.S. THOMPSEN, Appellee.

No. 04-CV-346.

District of Columbia Court of Appeals.

Argued May 24, 2005.

Decided July 14, 2005.

Allen V. Farber, with whom James A. Barker, Jr., Washington, DC, was on the brief, for appellant.

Dale A. Cooter, Washington, DC, for appellee.

Before SCHWELB and GLICKMAN, Associate Judges, and BELSON, Senior Judge.

SCHWELB, Associate Judge:

A jury awarded Elaine J.S. Thompsen $100,000 on her claim of unjust enrichment against News World Communications, Inc. (the Times), a corporation which publishes a daily newspaper known as The Washington Times. The Times filed a timely post-trial motion for Judgment as a Matter of Law (JMOL) or, in the alternative, for a new trial, relying, inter alia, on a statute of limitations defense which it had asserted in pretrial motions and throughout the trial. On March 11, 2004, the trial judge denied the Times' post-trial motion. Judgment was entered on the verdict, and the Times appealed, again contending, inter alia, that Ms. Thompsen's claim was time-barred.

To decide this appeal, we must determine when the statute of limitations begins to run in a case of unjust enrichment. The issue is a novel and difficult one, and the parties have not provided us with, nor have we found, any applicable precedent in this jurisdiction. Although reasonable minds could differ as to the proper outcome, we follow the approach of courts in other jurisdictions which have addressed comparable issues, and which have held that the statute of limitations begins to run when the plaintiff's last service has been rendered and compensation has been wrongfully withheld. Applying this principle to the present record, we reverse.

I. THE TRIAL COURT PROCEEDINGS

A. Ms. Thompsen's allegations.

According to Ms. Thompsen's complaint, which was filed on July 22, 1998, the events that gave rise to this action began in September 1994, when Ms. Thompsen met Janet Naylor, who was then a political reporter for the Times. Ms. Thompsen told Ms. Naylor that she had an idea for a family magazine for the Times. Ms. Naylor was receptive, and she put Ms. Thompsen in touch with Michael Mahr, the newspaper's Advertising Director. In October 1994, Mr. Mahr asked Ms. Thompsen to fax him her proposal, and on November 17, 1994, Ms. Thompsen did so.

Ms. Thompsen further alleged in her complaint that on November 29, 1994, Ms. Thompsen met with Mr. Mahr and several other representatives of the Times at the newspaper's New York Avenue office. At that meeting, according to Ms. Thompsen,

Mr. Mahr expressed great enthusiasm for Ms. Thompsen's ideas. He also asked what monetary remuneration Ms. Thompsen sought for the idea, and himself suggested one hundred thousand dollars ($100,000.00) for the idea, and two hundred thousand dollars ($200,000.00) for a consulting position to develop the idea. Ms. Thompsen responded that the amount of the remuneration would be discussed later.[¹]

On December 1, 1994, at Mr. Mahr's request, Ms. Thompsen faxed two proposed layouts to Mr. Mahr, one for the Family Times and one for the Kids Times. She followed up these submissions with "a marketing strategy and commercial ideas" for the proposed publications. On December 6, 2004, Mr. Mahr confirmed receipt and "indicated [that] he desired to go forward with Ms. Thompsen's proposals." Mr. Mahr explained that he would make some changes in his department "before the project could begin," but that this would be completed by Christmas.

Ms. Thompsen further alleged in her complaint that on January 5 or 6, 1995, after some delay, Mr. Mahr telephoned Ms. Thompsen and advised her that "[i]t's all going to happen; it is all going to take place." On February 9, 1995, Mr. Mahr left a message on Ms. Thompsen's answering machine that he wanted to get started with their project. Less than two months later, however, there was a dramatic turnaround on the part of the Times. On April 4, 1995, according to Ms. Thompsen's complaint,

Mr. Mahr telephoned Ms. Thompsen at home. He stated that the project was in the works. A family magazine was being developed and it would be called "Parenting." Mr. Mahr told Ms. Thompsen that her ideas had not been novel and she would not be paid for her ideas or for the work she had done.

... In June 1997, the Times published its first edition of its new weekly supplement, the "Family Times."

Ms. Thompsen claims that the new supplement was similar to, and based upon, her ideas and work. She testified that shortly after April 4, 1995, she consulted legal counsel.

B. The disposition of the Times' motion to dismiss.

On July 22, 1998, as a result of the foregoing events, Ms. Thompsen filed suit against the Times. Her initial complaint contained five counts: I. breach of express contract; II. breach of implied contract; III. promissory estoppel; IV. conversion; and V. breach of quasi-contract.² The Times moved to dismiss all of Ms. Thompsen's claims as time-barred, invoking the District's three-year statute of limitations for contract claims. See D.C.Code § 12-301(7) (2001). On November 17, 1998, the first motions judge dismissed as time-barred the counts of the complaint based on breach of express contract, breach of implied contract, and promissory estoppel, but he denied the motion to dismiss the claims for conversion and unjust enrichment because, in the judge's view, "the statute of limitations on these two counts did not start [to run] until June 1997, when the Times published its first edition of the Family Times, because logic and the law require actual use of Plaintiff's idea to commence these claims." With respect to the quasi-contract count, the judge wrote that

the concept of quasi-contract provides a basis to prevent unjust enrichment in the absence of an obligation. Black's Law Dictionary 1120 (5th ed. 1979). By definition, the quasi-contract claim is clearly distinct from the first three contract claims in the complaint. Essentially, breach of contract involves causing an injury to the Plaintiff, while unjust enrichment involves conferring a benefit on the Defendant.

Thus, even if Defendant's failure to pay Plaintiff for her ideas constituted a breach of contract, Defendant would not have been unjustly enriched if it had never used Plaintiff's ideas. But, if the Defendant used Plaintiff's ideas in publishing the "Family Times" without giving Plaintiff credit or compensation at that time, then the Times was unjustly enriched. As such, a quasi-contract claim could not commence until June 1997, when the first "Family Times" was published.

C. The amended complaint and the trial.

Following the dismissal of the first three counts of her initial complaint, Ms. Thompsen filed an amended complaint containing only two claims: 1. conversion; and 2. breach of quasi-contract. The Times filed a motion for summary judgment, again arguing, inter alia, that Ms. Thompsen's claims were barred by the three-year statute of limitations. In an order entered on January 13, 2000, the second motions judge (who was also the trial judge) rejected this contention as contrary to "the law of the case," and she reaffirmed that "the conversion and quasi-contract claims did not ripen until the defendant allegedly used the plaintiff's proposal by publishing the family supplement in June 1997."

The case proceeded to trial in May 2000. Ms. Thompsen testified generally, though with some variation,³ in accordance with the allegations of her complaint but added some details. Ms. Thompsen stated that Mr. Mahr wanted to meet with her to discuss this "new supplement," which was "your idea," and that the people at the Times were "actually working on it already." Thus, according to Ms. Thompsen, the Times' refusal to pay her came after the Times had began to use the fruits of her labor. As noted by the trial judge in her written order denying the Times' post-trial motion for JMOL, Ms. Thompsen also testified that her proposal conferred a benefit on the Times as soon as she presented it.

The trial judge dismissed the conversion claim at the close of the plaintiff's case. At various stages of the trial, counsel for the Times reiterated his position that the unjust enrichment claim was time-barred, but the judge disagreed, and she allowed that claim to go to the jury. The jury returned a verdict in Ms. Thompsen's favor in the amount of $100,000. On March 16, 2004, the trial judge denied the Times' post-trial motion for judgment as a matter of law or, in the alternative, for a new trial. This appeal followed.

II. LEGAL ANALYSIS

A. The case law.

Although the Times has also raised other alleged bases for reversal,⁴ the only issue that we must reach in order to resolve this case is whether the claim for unjust enrichment should have been dismissed as time-barred. Both trial judges concluded that the statute of limitations did not begin to run on this claim until June 1997, when the Times published its first edition of the Family Times, but neither judge cited any supporting case law. Ms. Thompsen's brief is likewise bereft of any relevant authority. As the trial judge recognized in her order of March 16, 2004, "what constitutes the accrual of a cause of action is a question of law," citing Smith v. Brown & Williamson Tobacco Corp., 108 F.Supp.2d 12, 15 (D.D.C.2000), and we therefore review de novo the trial court's resolution of this issue. We conclude that the statute of limitations began to run no later than April 4, 1995, when, according to Ms. Thompsen, the Times, having encouraged Ms. Thompsen's efforts, having received the benefit of her work and ideas, having expressed the intention to use her work product, and having already begun to utilize it, nevertheless informed her that she would not be compensated.

This court has had occasion to discuss the "unjust enrichment" theory of quasi-contract in a number of cases, most recently in Jordan Keys & Jessamy, LLP...