Michael Bregman v. Steven Perles ( 2014 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 19, 2014 Decided April 1, 2014
No. 12-7091
MICHAEL J. BREGMAN,
APPELLANT
v.
STEVEN R. PERLES, ET AL.,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:11-cv-01886)
Tamara L. Miller argued the cause for appellant. Peter R.
Masciola was on brief.
Caroline M. Mew argued the cause for the appellees.
Mark Emery and Annie P. Kaplan were on brief. Geoffrey T.
Hervey entered an appearance.
Before: HENDERSON and GRIFFITH, Circuit Judges, and
SENTELLE, Senior Circuit Judge.
KAREN LECRAFT HENDERSON, Circuit Judge: In 2008,
Libya paid $111 million to the victims of the 1986 LaBelle
discotheque bombing in Berlin in order to settle a lawsuit (the
Beecham case) alleging Libya’s responsibility for the
2
bombing. The victims’ lawyers—Steven Perles, Thomas Fay
and Paul Schwarz—received nearly $36 million for their
efforts. Appellant Michael Bregman, a retired federal agent
who allegedly provided investigative and other services to the
lawyers in the Beecham litigation, was paid nothing. Seeking
his piece of the pie, Bregman sued the lawyers on October 26,
2011. The district court found that Bregman’s unjust
enrichment claim accrued on September 25, 2008, when
Perles’s lawyer sent him a letter refusing his request for
compensation. It therefore dismissed the claim as untimely
under the applicable three-year statute of limitations.
Bregman appeals, arguing that his claim accrued no earlier
than November 17, 2008, when the defendant lawyers received
payment from the Beecham settlement. We agree with the
district court and therefore affirm.
I
Bregman worked for the United States Bureau of Alcohol,
Tobacco and Firearms (ATF) for 32 years.1 In October 2001,
Perles approached Bregman, who was by then retired, to ask
for his help in collecting a judgment Perles and Fay had
obtained for their clients in a suit against Iran. Bregman
agreed and was paid $25,000 for his services after the
judgment proceeds were disbursed.
In January 2002, based on the success of that engagement,
Perles engaged Bregman to work full-time on his other
international terrorism cases. Bregman assisted Perles with
business development, strategy, security and staff training.
1
On a motion to dismiss, the facts alleged in the complaint are
taken as true and all reasonable inferences therefrom are drawn in the
plaintiff’s favor. Autor v. Pritzker, 740 F.3d 176, 179 (D.C. Cir.
2014).
3
He also served as an in-house investigator for a variety of cases
in which Perles, Fay and Schwarz represented victims of
state-sponsored terrorist attacks. Perles initially told Bregman
that he would be paid a percentage of any contingent fees
recovered. Over the course of Bregman’s employment,
however, Perles appeared to change the terms of his
compensation, requesting Bregman’s hourly rate and the
number of hours he had worked. In a September 2003
meeting, Perles agreed to pay Bregman $100,000 for his
services relating to the Beecham case. Perles also promised
Bregman a $1 million bonus if the plaintiffs were successful in
collecting on the Beecham judgment. Despite Bregman’s
numerous requests, the parties never entered into a written
agreement regarding his services and compensation. Between
January 2002 and June 2004, Bregman claims to have
performed 4,480 hours of services for Perles and his
co-counsel, which, at Bregman’s claimed rate of $250 per
hour, amounts to $1,120,000 in unpaid services.
In August 2008, the United States and Libya reached an
agreement providing for the settlement of terrorism-related
claims of U.S. nationals against Libya. See Libyan Claims
Resolution Act, Pub. L. No. 110-301, 122 Stat. 2999 (Aug. 4,
2008); see also Exec. Order No. 13477, 73 Fed. Reg. 65965
(Oct. 31, 2008). On September 8, 2008, Bregman’s lawyer
sent a letter to Perles, Fay and Schwarz requesting
confirmation that Bregman would be paid $1.1 million out of
whatever contingency fee they recovered from the Beecham
settlement. The letter purported to serve as a lien on the total
fee collected by the lawyers from the settlement.
On September 25, 2008, Perles’s lawyer responded by
letter. See Joint Appendix (JA) 48–49 (the “9/25 Letter”).
Perles’s lawyer did not mince words:
4
I am writing in response to your letter . . . regarding
the claim asserted by Michael Bregman in connection
with the LaBelle [discotheque] case. As set forth
below, there is no basis whatsoever for Mr.
Bregman’s claim to any of the settlement proceeds
from the LaBelle case.
9/25 Letter 1. The letter denied that Perles had ever agreed to
the alleged compensation structure. Id. It stated that “Mr.
Perles is not aware of any work performed by Mr. Bregman in
connection with the LaBelle case (other than perhaps one
phone call made by Mr. Bregman to obtain a copy of the police
report)” and requested that Bregman produce “documentation
reflecting the work that [he] claims to have performed in
connection with the LaBelle case.” Id. It continued:
Mr. Perles is shocked that Mr. Bregman would assert
a claim for $1,100,000, without providing one shred
of documentation to support his claim. The plain and
simple fact is that Mr. Bregman performed essentially
no work on the LaBelle case, and he now seeks to
extort money from Mr. Perles and his co-counsel,
and, ultimately, the individual LaBelle victims and
their Trust. Mr. Bregman should be aware that if he
insists on pursuing his frivolous claim in court, Mr.
Perles will fully defend the bad faith claim, and will
seek appropriate sanctions.
Id. at 2. The letter represented that Schwarz, Perles’s
colleague, also “deems Mr. Bregman’s claim as entirely
frivolous” and asserted that Fay, Perles’s other colleague, had
never reported to Perles or Schwarz that Bregman had
performed any work for him. Id. Finally, the letter
concluded, “please be aware that no funds have been received
5
by Mr. Perles in connection with the LaBelle case, and it is
unclear at this time when such funds may come in.” Id.
On November 17, 2008, those funds did come in. The
Beecham plaintiffs received $111 million, from which Perles,
Fay and Schwarz received $35.9 million in fees and expenses.
Bregman was not paid. He filed suit on October 26, 2011,
alleging two contract claims against Perles, an unjust
enrichment claim against all three lawyers and a claim for
declaratory relief.
The district court denied Perles’s motion to dismiss the
contract claims but dismissed the claim for declaratory relief.
Relevant here, the district court also dismissed Bregman’s
unjustment enrichment claim as barred by the applicable
statute of limitations. Bregman filed a notice of appeal and, at
the parties’ joint request, the district court entered final
judgment on the unjust enrichment claim.
II
We review de novo the district court’s dismissal, accepting
the factual allegations in the complaint as true and granting
Bregman the benefit of all reasonable inferences derived from
the facts alleged. Vila v. Inter-Am. Inv. Corp., 570 F.3d 274,
284 (D.C. Cir. 2009). “[B]ecause statute of limitations issues
often depend on contested questions of fact, dismissal is
appropriate only if the complaint on its face is conclusively
time-barred.” de Csepel v. Republic of Hungary, 714 F.3d
591, 603 (D.C. Cir. 2013) (quoting Firestone v. Firestone, 76
F.3d 1205, 1209 (D.C. Cir. 1996) (per curiam)).
“Under District of Columbia law, which applies here,
unjust enrichment claims are subject to a three year statute of
limitations.” Vila, 570 F.3d at 283 (citing News World
6
Commc’ns v. Thompsen, 878 A.2d 1218, 1221 (D.C. 2005)).
“[T]he statute of limitations begins to run when a claim
accrues, and . . . a cause of action accrues when its elements are
present, so that the plaintiff could maintain a successful suit.”
Thompsen, 878 A.2d at 1222; see also Colbert v. Georgetown
Univ., 641 A.2d 469, 472 (D.C. 1994) (en banc) (“Where the
fact of an injury can be readily determined, a claim accrues for
purposes of the statute of limitations at the time the injury
actually occurs.”). “Unjust enrichment occurs when: (1) the
plaintiff conferred a benefit on the defendant; (2) the defendant
retains the benefit; and (3) under the circumstances, the
defendant’s retention of the benefit is unjust.” Fort Lincoln
Civic Ass’n, Inc. v. Fort Lincoln New Town Corp., 944 A.2d
1055, 1076 (D.C. 2008) (quoting Thompsen, 878 A.2d at
1222); see also Jordan Keys & Jessamy, LLP v. St. Paul Fire &
Marine Ins. Co., 870 A.2d 58, 62–64 (D.C. 2005). Thus, “a
claim for unjust enrichment accrues only when the enrichment
actually becomes unlawful, i.e., where there has been a
wrongful act giving rise to a duty of restitution.” Thompsen,
878 A.2d at 1225 (alteration, citation and quotation marks
omitted); accord id. at 1219 (“[T]he statute of limitations
begins to run when the plaintiff’s last service has been rendered
and compensation has been wrongfully withheld.”).
In Thompsen, the District of Columbia Court of Appeals
addressed, as a matter of first impression, the point at which the
statute of limitations begins to run on an unjust enrichment
claim. There, the plaintiff had pitched an idea to The
Washington Times (Times) newspaper about publishing a
family magazine for the Times. Having been told by the
Times that she would be compensated, the plaintiff did
substantial work developing the project, only to be told by the
Times months later that there had been a change of heart: The
Times was developing a similar project without her and did not
plan to pay her for her previous efforts. Two years later, the
7
Times published the first edition of its magazine, “Family
Times.” See id. at 1220. The D.C. Superior Court found the
plaintiff’s unjust enrichment claim did not accrue until the
Times published its first edition of the magazine, reasoning the
claim could not accrue until then because “Defendant would
not have been unjustly enriched if it had never used Plaintiff’s
ideas.” Id. at 1221. The District of Columbia Court of
Appeals disagreed. By providing the Times with the idea for
the family magazine and doing some of the groundwork to
develop it, the plaintiff had conferred something of value on
the Times. Id. at 1225. Accordingly, the Times’s retention
of the benefit became unjust—and the plaintiff’s claim
accrued—when the Times told her she would not be paid, not
on the later date when it published the magazine. Id. at 1226.
We applied these principles in Vila v. Inter-American
Investment Corp., 570 F.3d 274, 284 (D.C. Cir. 2009). There,
the plaintiff was an independent consultant who worked on
several projects for the Inter-American Investment
Corporation (IIC). The plaintiff performed services for the
IIC with the expectation that he would be paid but he was
eventually told that in fact he would not be paid. See id. at
276–77. As in Thompsen, the plaintiff’s claim accrued when
the enrichment became unjust—i.e., when the IIC, having
retained the benefit of the plaintiff’s services, refused payment.
In Vila, however, there were at least two possible dates of
refusal. Id. at 284. On August 4, 2003, an IIC employee told
the plaintiff he would not be compensated. Undeterred, the
plaintiff protested to the employee’s supervisors. Eventually,
on November 4, 2003, the plaintiff was told unequivocally that
he would not be paid. We held that, granting the plaintiff the
benefit of all reasonable inferences arising from the allegations
in the complaint, the plaintiff’s claim accrued on November 4,
2003, because on that date “the first unequivocal refusal for all
his work that year [occurred].” Id. at 284.
 8
Here, the three lawyers were enriched by the services that
Bregman allegedly performed for them between January 2002
and June 2004. Bregman’s claim did not accrue, however,
until that enrichment became unjust: when they unequivocally
refused to compensate him for the services he had performed.
See Vila, 570 F.3d at 284; Thompsen, 878 A.2d at 1225–26.
Applying these principles, the district court held that
Bregman’s claim accrued on September 25, 2008, because
Perles’s lawyer’s letter of that date was an unequivocal refusal
of payment. We agree. The letter informed Bregman, in no
uncertain terms, that the three lawyers 2 were not going to
compensate him for his services. It described Bregman’s
claims as having “no basis whatsoever” and an “entirely
frivolous” and sanctionable attempt to “extort money from Mr.
Perles and his co-counsel.” 9/25 Letter 1–2. It denied that
Perles ever agreed to compensate Bregman and claimed that
Bregman “performed essentially no work” on their behalf. Id.
at 2. To be sure, the letter’s aggressive tone suggests a bit of
posturing by Perles and his co-counsel. But it nevertheless
informed Bregman that he would not be paid for his services;
2
Bregman contends that the letter speaks only for Perles, not
Fay and Schwarz, because it is signed by Perles’s lawyer. But
Bregman took the opposite position below: “[T]his letter by
[Perles’s lawyer] speaks for all three of these lawyers. . . . So we
have this one lawyer who is speaking on behalf or representing the
interests of Mr. Fay, Mr. Schwarz, as well as Mr. Perles . . . .” JA
109 (Transcript of 5/29/12 Motion Hearing). Any alleged error in
attributing the letter’s refusal to all three lawyers was therefore
invited: “That one will not be heard to complain of receiving what
one asked for has a long tradition both in jurisprudence, as in the
doctrine of estoppel, and in common wisdom.” United States v.
Harrison, 103 F.3d 986, 992 (D.C. Cir. 1997) (citing Seneca,
Epistles, 95, I); see also United States v. Warren, 42 F.3d 647, 658
(D.C. Cir. 1994).
9
therefore, as of that date, the elements of an unjustment
enrichment claim were met and the statute of limitations began
to run.
Bregman contends that, drawing all reasonable inferences
in his favor, the district court should have found that the letter
was not a refusal of payment but rather an invitation to further
negotiations. He notes that the letter is captioned “for
settlement purposes only” and that at one point it requested that
Bregman provide documentation of any work he performed in
connection with the LaBelle case. We think the caption adds
little to the analysis and, read in context, the request for
documentation cannot reasonably be construed as an invitation
to negotiate—especially considering that in the previous
paragraph the letter requested a copy of any written agreement
between the parties, which agreement all knew to be
non-existent. See 9/25 Letter 1. Moreover, Bregman
conceded below that the 9/25 Letter “certainly rejected in
writing Mr. Bregman’s demands for compensation for his
services.” JA 56. Instead of pressing the negotiations point,
he argued that the statute of limitations did not begin to run
until the lawyers received payment. We therefore turn to that
contention.
Bregman argues that “[u]ntil Defendants’ recovery of the
Beecham settlement proceeds on November 17, 2008, there
was no duty of restitution to Mr. Bregman” and his “unjust
enrichment claim could only accrue when there were proceeds
from which Mr. Bregman would have had an expectation of
payment.” Br. of Appellant 9. Bregman misunderstands the
nature of unjust enrichment, which is based not on a
contractual duty but rather “has its roots in the common law
concept of quasi-contract.” 4934, Inc. v. D.C. Dep’t of Emp’t
Servs., 605 A.2d 50, 55 (D.C. 1992). That is:
10
A quasi or constructive contract rests upon the
equitable principle that a person shall not be allowed
to enrich himself unjustly at the expense of another.
In truth it is not a contract or promise at all. It is an
obligation which the law creates, in the absence of
any agreement, when and because the acts of the
parties or others have placed in the possession of one
person money, or its equivalent, under such
circumstances that in equity and good conscience he
ought not to retain it, and which ex aequo et bono
belongs to another.
Jordan Keys, 870 A.2d at 64 (second emphasis added) (quoting
Miller v. Schloss, 218 N.Y. 400, 407 (1916)); see also Vila, 570
F.3d at 279–80. Although the defendant lawyers were
eventually enriched by the Beecham settlement proceeds, they
were “enriched” in the legal sense by Bregman’s efforts on
their behalf. Whether or not Bregman’s labors got them
across the goal line, he conferred a benefit on them by working
to move the ball forward:
A person confers a benefit upon another if he . . .
performs services beneficial to or at the request of the
other . . . or in any way adds to the other’s security or
advantage. He confers a benefit not only where he
adds to the property of another, but also where he
saves the other from expense or loss. The word
“benefit,” therefore, denotes any form of advantage.
Restatement (First) of Restitution § 1 (1937), cmt. b; see also
id. § 40 & cmt. d; Bloomgarden v. Coyer, 479 F.2d 201, 211–
12 (D.C. Cir. 1973).3
3
Bregman also relies on Hannon Law Firm, LLC v. Melat,
Pressman & Higbie, LLP, 293 P.3d 55 (Colo. App. 2011), to support
11
The Third Circuit corrected a similar misconception in
Baer v. Chase, 392 F.3d 609 (2003). There, the plaintiff gave
the defendant, the producer of the hit television series The
Sopranos, some ideas and advice about developing the show.
(As a former New Jersey prosecutor, the plaintiff was well
qualified to do so.) The plaintiff thought he would be paid
once the show aired but he was not paid. Id. at 612–14. The
Third Circuit held the plaintiff’s quasi-contract claim accrued
when the plaintiff last rendered services to the defendant. Id.
at 623.4 The plaintiff argued that his claim could not accrue
until the show aired because he believed remuneration for his
his argument that, in a case involving a contingent fee arrangement,
an unjust enrichment claim cannot accrue until the fee is recovered.
Even if Hannon were a District of Columbia case, it would not
necessarily require a different result. There, several law firms had
represented the plaintiffs on a contingent basis but one firm, Hannon,
withdrew before the case settled. Id. at 57–58. Hannon sued the
other firms seeking the value of its hourly services. The court held
that Hannon’s unjust enrichment claim accrued when the underlying
case settled and the defendant firms recovered their contingent fee,
not earlier when Hannon withdrew from representation (i.e., last
rendered services). Id. at 60. Significantly, however, the
defendant firms’ refusal to pay Hannon coincided with their
recovery of the fee. Id. at 57–58. Here, by contrast, the three
lawyers refused to pay Bregman two months before recovery of the
Beecham settlement. Had the defendant firms in Hannon refused to
pay Hannon before they received their fee, the result might have
been different. Without expressing any opinion on Hannon’s
reasoning, we think it a less helpful comparator than Thompsen,
where the refusal to pay and the recovery fell on different dates.
4
The District of Columbia Court of Appeals has not adopted
the last rendition of services test. See Thompsen, 878 A.2d at 1225
n.7; see also Vila, 570 F.3d at 284. In Baer, the plaintiff was never
affirmatively told that he would not be paid.
12
services was contingent upon the show’s broadcast. The court
rejected the argument, explaining:
[The plaintiff] misunderstands the nature of a
[quasi-contract] claim with respect to the statute of
limitations. . . . [His] belief that he was going to be
paid if and when the show was a success is irrelevant
because his understanding of his oral contract, even if
correct, does not govern his quasi-contract claim
inasmuch as a quasi-contract claim is not a “real”
contract based on mutual consent and understanding
of the parties. The essence of a quasi-contract claim
is not the expectancy of the parties, but rather the
unjust enrichment of one of them. It therefore would
be inappropriate to look at [the plaintiff’s]
expectations of payment, rather than at the services he
provided [the defendant].
Id. (quoted approvingly in Thompsen, 878 A.2d at 1224).
Although Bregman’s right to recover on his contractual
claim—still pending in district court—may turn on the success
of the Beecham litigation, his right of recovery on his unjust
enrichment claim is based on the services he performed. See
Jordan Keys, 870 A.2d at 64 (“[T]he claim of unjust
enrichment asserted by [the plaintiff] is based on equitable
principles, and it is not contingent upon the niceties of the law
of contracts. Indeed, it is not a claim of breach of contract at
all.”). As of June 2004, he had enriched Perles, Fay and
Schwarz by performing those services. The enrichment
became unjust on September 25, 2008, when they refused his
request for compensation. Bregman’s claim therefore accrued
on that date, see Vila, 570 F.3d at 284; Thompsen, 878 A.2d at
1225–26, and, accordingly, it is untimely.
13
For the foregoing reasons, the judgment of the district
court is affirmed.
So ordered.