Capitol Servs. Mgmt. v. Vesta Corp.
Capitol Servs. Mgmt. v. Vesta Corp.
Opinion of the Court
Plaintiff Capitol Services Management, Inc. ("CSMI") brings suit against Defendant VESTA Corporation ("Vesta") for: (1) intentional interference with business relations; and (2) tortious interference with a reasonable expectation of prospective economic advantage. CSMI alleges that Vesta interfered with its contract to manage an apartment property in the District of Columbia, causing CSMI to lose the contract. Pending before the Court is Vesta's motion to dismiss the complaint. See ECF No. 6. Upon consideration of the motion, the response and reply thereto, and the relevant law, the Court GRANTS Vesta's motion and DISMISSES CSMI's complaint.
I. Background
CSMI is a property management corporation located in the District of Columbia. Compl., ECF No. 1 ¶ 3. Vesta is a property management corporation located in Connecticut. Id. ¶ 4. At different times, both corporations managed the Park Southern Apartments, an apartment property located in Southeast District of Columbia. Id. ¶¶ 3, 8, 9. This property was owned by the Park Southern Neighborhood Corporation ("PSNC") under a Deed of Trust with the District of Columbia, "acting by and through DHCD [the District of Columbia Department of Housing and Community Development]." Id. ¶ 5. The Deed of Trust stated that PSNC was indebted to the District of Columbia for over three million dollars. Id. ¶ 6. The Deed of Trust required PSNC to repay the debt with interest and perform certain duties. Id. ¶ 7.
PSNC contracted with Vesta to manage the Park Southern Apartments. Id. ¶ 8. However, on March 17, 2014, PSNC terminated the contract because it was "not satisfied" with Vesta's services. Id. The same day, PSNC entered into an "exclusive" management agreement with CSMI. Id. ¶¶ 9, 10. Pursuant to that agreement, CSMI was to manage the Park Southern Apartment for a year with the option to continue the contract on a year-to-year basis thereafter. Id. ¶ 10. If the contract was terminated without cause within the first year, CSMI would be entitled to the compensation owed for the time remaining under the contract. Id. ¶ 12.
*267Less than a month after PSNC entered into the management contract with CSMI, DHCD sent PSNC a "notice of default" and gave PSNC a month to cure the default. Id. ¶ 26. When PSNC did not cure the default by May 2, 2014, DHCD "implemented the default process."
CSMI alleges that Vesta knew about its business relationship and contractual expectancy, yet interfered with its management agreement. See id. ¶¶ 36-51. CSMI alleges that Vesta had been in frequent communication with DHCD regarding DHCD's "intention to default" PSNC and remove CSMI as property manager. Id. ¶ 14; see also id. ¶¶ 15-25. According to CSMI, Vesta told DHCD that it "was going to continue to manage the property and to provide (DHCD) whatever assistance we need with respect to the ongoing condition of the property," despite having been terminated by PSNC. Id. ¶¶ 16, 41. CSMI alleges that "its relationship with PSNC was broken and CSMI lost any income it should have received for its management services" as a "direct and proximate result of Vesta performing the management contract." Id. ¶ 45. CSMI requests $100,000 in compensatory and economic damages, as well as punitive damages. Id. ¶¶ 45, 51.
II. Standard of Review
A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of a complaint. Browning v. Clinton ,
"[W]hen ruling on a defendant's motion to dismiss [pursuant to Rule 12(b)(6) ], a judge must accept as true all of the factual allegations contained in the complaint." Atherton v. D.C. Office of the Mayor ,
III. Analysis
Vesta moves to dismiss CSMI's complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). See Def.'s Mot., ECF No. 6. It makes three arguments: (1) CSMI's complaint must be dismissed as time-barred; (2) CSMI is collaterally estopped from bringing its case against Vesta because the same issues were already litigated against the District of Columbia in the Superior Court of the District of Columbia;
A. CSMI's Claims are Time-Barred
Vesta argues that CSMI was aware of its alleged tortious actions on May 3, 2014-the date that DHCD took control of the Park Southern Apartments and contracted with Vesta, thereby terminating CSMI's contract. Def.'s Mot., ECF No. 6 at 5-7. Because the statute of limitations for tortious interference claims is three years under District of Columbia law, Vesta contends that CSMI's complaint-filed on August 28, 2017-is time-barred. Id. at 6 (citing D.C. Code. § 12-301(8) ).
It is undisputed that CSMI's claims are subject to a three-year statute of limitations pursuant to
Federal Rule of Civil Procedure 12(b)(6)"is the vehicle for asserting the affirmative defense of statutory time limitation." Peart v. Latham & Watkins LLP ,
However, CSMI argues that the discovery rule applies and thus, its claims are not barred. Pl.'s Opp'n, ECF No. 9 at 4-7. The discovery rule applies when "the *269relationship between the fact of injury and the alleged tortious conduct is obscure." Beard ,
CSMI alleges that it did not have "actual notice" of the "predicate facts" until July 14, 2016. Pl.'s Opp'n, ECF No. 9 at 5. On July 14, 2016, CSMI received "considerable evidence" of Vesta's alleged tortious interference by way of discovery in the Superior Court litigation against the District of Columbia.
It is not necessary that CSMI have "actual notice" of the full extent of Vesta's involvement, as CSMI contends. See Pl.'s Opp'n, ECF No. 9 at 4-5. "Indeed, a right of action may accrue before the plaintiff becomes aware of all of the relevant facts." Hendel v. World Plan Executive Council ,
The Court's conclusion is bolstered by CSMI's allegations against the District of Columbia in the Superior Court litigation. See Civil Case Number 2014-cv-4551 (filed July 24, 2014). In claiming tortious interference against the city, CSMI alleges that the District of Columbia "collaborated with Vesta regarding the government's actions in advance of Defendant's May 3, [2014] takeover of the property." Ex. A, ECF No. 6-1 ¶ 18.
The Court finds 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. The Court therefore denies CSMI's request for "limited discovery on the narrow issue of when CSMI knew or should have known about Vesta's tortious conduct." Pl.'s Opp'n, ECF No. 9 at 6-7.
IV. Conclusion and Order
The Court finds that CSMI had reason to know of Vesta's alleged tortious conduct in May 2014. Because it is undisputed that the applicable statute of limitations is three years and CSMI did not file its claim until August 2017, the Court must GRANT Vesta's motion to dismiss and DISMISS CSMI's claims as time-barred. This is a final, appealable Order.
SO ORDERED.
It is unclear why PSNC "defaulted" or what the "default process" entailed.
CSMI sued the District of Columbia in the Superior Court for the District of Columbia, claiming breach of contract, a breach of the covenant of good faith, tortious interference with contractual relations, and tortious interference with a business opportunity. See Ex. A, ECF No. 6-1 (Civil Case Number 2014-cv-4551). Judge Mott granted the District of Columbia's motion for summary judgment, finding that the District of Columbia was entitled to sovereign immunity. See Ex. B, ECF No. 6-1 at 22 (Civil Case Number 2014-cv-4551). Judge Mott also found that "CSMI cannot establish a prima facie case of tortious interference with contractual or business relationship" because "no evidence exists that the District of Columbia actually interfered with CSMI's contract" because "CSMI voluntarily decided not to enforce its claimed rights under the Management Agreement after DHCD entered the property." Id. CSMI argues that Judge Mott's findings related to its tortious interference claim are dicta . Pl.'s Opp'n, ECF No. 9 at 7-8. Because the Court finds that CSMI's complaint is time-barred, it need not resolve the significance of Judge Mott's second finding.
When citing electronic filings throughout this Opinion, the Court cites to the ECF page number, not the page number of the filed document.
The Court may take judicial notice of public records on a motion to dismiss. Kaempe v. Myers ,
Reference
- Full Case Name
- CAPITOL SERVICES MANAGEMENT v. VESTA CORPORATION
- Cited By
- 2 cases
- Status
- Published