Houshang Momenian v. Davidson ( 2016 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
_________________________________________
)
Houshang Momenian, et al., )
)
Plaintiffs, )
)
v. ) Civil No. 15-cv-00828 (APM)
)
Michael M. Davidson, )
)
Defendant. )
_________________________________________ )
MEMORANDUM OPINION
I. INTRODUCTION
On May 6, 2015, Plaintiffs Houshang Momenian and Vida Momenian filed suit against
their former lawyer, Defendant Michael Davidson, for legal malpractice and breach of fiduciary
duty. After the court dismissed the original Complaint on statute-of-limitations grounds, Plaintiffs
filed an Amended Complaint on February 10, 2016, which attempted to cure the statute-of-
limitations deficiencies of the original Complaint by adding several new allegations. Defendant
has moved once again to dismiss all claims. He asserts, among other arguments, that Plaintiffs’
claims are untimely, even as amended.
After reviewing the Amended Complaint and evaluating the parties’ arguments, the court
concludes that Plaintiffs’ new allegations have not saved their claims from the statute-of-
limitations bar. The court therefore grants Defendant’s Motion to Dismiss and dismisses this
action with prejudice.
II. BACKGROUND
A. Factual Background
The court previously set forth the factual background of this case in its January 21, 2016,
Memorandum Opinion and Order, which addressed Defendant’s first Motion to Dismiss.
See generally Momenian v. Davidson, Civ. No. 1:15-cv-00828 (APM), 2016 WL 259641, at *1-2
(D.D.C. Jan. 21, 2016) [hereinafter Momenian I]; see also generally Def.’s Mot. to Dismiss, ECF
No. 7. The court presumes familiarity with the facts as stated in that opinion and thus provides
only a short summary of the relevant allegations, as well as the new allegations presented by
Plaintiffs in support of their claims.
1. Summary
Plaintiffs are a husband and wife who, in 1990, purchased three adjacent properties in
Southeast Washington, D.C., from Paul and Amelia Interdonato. Am. Compl., ECF No. 13, ¶¶ 1-
2, 8. In exchange for the properties, Plaintiffs executed a $265,000 promissory note payable to
Paul Interdonato, which was secured by a Deed of Trust Note. Id. ¶ 9. In 2009, Plaintiffs filed a
lawsuit against the Interdonatos in D.C. Superior Court, alleging that the Interdonatos had failed
to credit various payments to Plaintiffs’ promissory note. Id. ¶ 23. Defendant served as Plaintiffs’
lawyer in that case. Id.
On October 12, 2010, based on Defendant’s advice, Plaintiffs settled their lawsuit against
the Interdonatos (the “Settlement”). Id. ¶ 28. Under the terms of the Settlement, Plaintiffs agreed
to a $15,000 credit against their promissory note in exchange for the dismissal, with prejudice, of
their lawsuit against the Interdonatos. Id. A year and a half later, on May 7, 2012, Plaintiffs and
the Interdonatos again became embroiled in litigation when the Interdonatos issued a Notice of
2
Foreclosure against Plaintiffs regarding the same properties at issue in the earlier action. Id. ¶ 34.
Once again, Plaintiffs settled the matter. Id. ¶ 36.
Two and a half years after the second settlement, on May 6, 2015, Plaintiffs filed a
Complaint against Defendant in D.C. Superior Court, which was then removed to this court. See
generally Compl., ECF 1, Ex. A, ECF No. 1-1 [hereinafter Compl.]. Plaintiffs alleged that,
because Defendant was negligent in explaining the scope and preclusive effect of the Settlement,
they did not understand that a “dismissal with prejudice meant that there would be no future
litigation over Plaintiffs’ claim that other amounts should have been credited by the Interdonatos.”
Id. ¶ 27. They also averred that they repeatedly asked Defendant to hire an accountant, or seek
court appointment of one, to analyze and compute the amounts the Interdonatos should have
credited to Plaintiffs, but that Defendant failed to engage such a person. Id. ¶ 25. This court
ultimately dismissed Plaintiffs’ Complaint, without prejudice, on statute of limitations grounds.
See generally Momenian I, 2016 WL 259641. The court did not dismiss the action in its entirety,
however, and instead afforded Plaintiffs an opportunity to amend their Complaint. See id. at *7.
2. The Amended Complaint
On February 10, 2016, Plaintiffs timely filed their Amended Complaint. See Am. Compl.
Although Plaintiffs’ general claims of malpractice and breach of fiduciary duty by Defendant
remained the same, they added several allegations to the Amended Complaint aimed at curing the
statute-of-limitations problems within the original Complaint.1 First, they averred that “Defendant
continued to represent Plaintiffs with regard to the Interdonato matter subsequent to October 12,
2010, as evidenced by an invoice from Defendant to Houshang for the period December 1, 2010[,]
1
Plaintiffs also added the Houshang Momenian Revocable Trust as an additional Plaintiff. They further noted that
“Houshang is the trustee of the Momenian Trust, and Houshang and Momenian are the First and Second
Beneficiaries.” Am. Compl. ¶ 3.
3
to May 15, 2011.” Id. ¶ 32. The invoice, excerpted in the Amended Complaint, seems to show
that Defendant worked for Plaintiffs on the Interdonato matter through April 2011. Id. Plaintiffs
also alleged that “[d]uring 2011 and early 2012,” Houshang called Defendant “approximately
every three months” regarding the Interdonato matter, asking Defendant “when he would have an
opportunity to go before a judge.” Id. ¶ 33. Defendant’s response, according to Plaintiffs, was
that “he was working on it.” Id. Finally, Plaintiffs added an allegation asserting that Houshang
had a conversation with Defendant on January 31, 2013—which Houshang recorded—during
which Defendant told Houshang that “‘[y]ou did not forfeit any of your rights on [the Interdonato
matter].’” Id. ¶ 38.
B. Procedural History
On February 18, 2016, Defendant renewed his motion to dismiss, asserting that Plaintiffs’
Amended Complaint still failed to state a claim. See generally Mem. in Support of Mot. to Dismiss
Am. Compl., ECF No. 14-1 [hereinafter Def.’s Mot.]. Defendant asserted the same arguments that
he had made in his original Motion to Dismiss. He argued that Plaintiffs: (1) failed to allege
negligence or wrongdoing; (2) failed to allege injury to themselves personally because they
transferred their property interest to the Houshang Trust; and (3) failed to assert claims within the
statute-of-limitations period. See generally id.2
III. STANDARD OF REVIEW
In evaluating a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the court
must accept a plaintiff’s factual allegations as true and “construe the complaint ‘in favor of the
plaintiff, who must be granted the benefit of all inferences that can be derived from the facts
2
As explained below, the court concludes that the allegations added by Plaintiffs in their Amended Complaint do not
save their claims from being time-barred by the applicable statute of limitations. The court, therefore, does not reach
Defendant’s other arguments.
4
alleged.’” Hettinga v. United States, 677 F.3d 471, 476 (D.C. Cir. 2012) (quoting Schuler v. United
States, 617 F.2d 605, 608 (D.C. Cir. 1979)). The court need not accept as true “a legal conclusion
couched as a factual allegation,” Papasan v. Allain, 478 U.S. 265, 286 (1986), or “inferences . . .
unsupported by the facts set out in the complaint,” Kowal v. MCI Commc’ns Corp., 16 F.3d 1271,
1276 (D.C. Cir. 1994).
“To survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is
facially plausible when “the plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.” Id. The factual
allegations in the complaint need not be “detailed”; however, the Federal Rules demand more than
“an unadorned, the-defendant-unlawfully-harmed-me accusation.” Id. “Threadbare recitals of the
elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. If the
facts as alleged fail to establish that a plaintiff has stated a claim upon which relief can be granted,
a court must grant defendant’s Rule 12(b)(6) motion. See Am. Chemistry Council, Inc. v. U.S.
Dep’t of Health & Human Servs., 922 F. Supp. 2d 56, 61 (D.D.C. 2013).
Generally, courts are discouraged from granting motions to dismiss based on an expired
limitations period. See Richards v. Mileski, 662 F.2d 65, 73 (D.C. Cir. 1981) (“There is an inherent
problem in using a motion to dismiss for purposes of raising a statute of limitations defense.”).
That is “because statute of limitations issues often depend on contested questions of fact.”
Firestone v. Firestone, 76 F.3d 1205, 1209 (D.C. Cir. 1996). Dismissal therefore is appropriate
“only if the complaint on its face is conclusively time-barred.” Id. The court keeps these principles
in mind when evaluating Plaintiffs’ allegations under the applicable three-year statute of
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limitations. See D.C. Code § 12-301(8) (2016); Duggan v. Keto, 554 A.2d 1126, 1143-44 (D.C.
1989) (applying three-year limitations period under D.C. Code § 12-301(8) to both legal
malpractice and breach of fiduciary duty claims).3
IV. DISCUSSION
A. The Discovery Rule
In Momenian I, the court applied the “discovery rule” applicable to cases brought under
D.C. law in which the “relationship between the fact of injury and the alleged tortious conduct is
obscure.” 2016 WL 259641 at *4 (quoting Bussineau v. Pres. & Dirs. of Georgetown Coll., 518
A.2d 423, 425 (D.C. 1986)) (internal quotation marks omitted). “Under the discovery rule, [the
limitations period of] a claim does not begin to accrue until a person knows—‘or by the exercise
of reasonable diligence should know’—of (1) some injury; (2) its cause in fact; and (3) some
evidence of wrongdoing.” Id. (quoting Bussineau, 518 A.2d at 426).
Because a “layman may not always be aware when unsatisfactory conduct by his attorney
will give rise to a malpractice action,” id. at *5 (quoting Williams v. Mordkofsky, 901 F.2d 158,
162 (D.C. Cir. 1990)) (internal quotation marks omitted), this court in Momenian I recognized the
need to afford Plaintiffs a “‘reasonable period of time’ to investigate and determine whether [their]
counsel [had] engaged in malfeasance,” id. (citing Byers v. Burleson, 713 F.2d 856, 862 (D.C. Cir.
1983)). Yet, even allowing for this extra time, this court found that had Plaintiffs exercised
reasonable diligence, they would have learned of their alleged injuries more than three years—the
applicable limitations period—before they filed suit. Id. at *6 (“If they had exercised reasonable
diligence, Plaintiffs would have learned before May 6, 2012—i.e., more than three years before
they filed suit—that the claims . . . were not in fact referred to the Court and/or a Court-appointed
3
Because this is a diversity action, the court applies the limitations period under District of Columbia law.
See A.I. Trade Fin., Inc. v. Petra Int’l Banking Corp., 62 F.3d 1454, 1458 (D.C. Cir. 1995).
6
accountant.” (citations and internal quotation marks omitted)); id. (“Plaintiffs [ ] concede that,
more than three years before they filed their Complaint, they knew that they possibly had been
injured through overpayment of the Promissory Note.”).
Nothing about the Amended Complaint alters the court’s original conclusion that a
straightforward application of the discovery rule renders Plaintiffs’ claims time-barred. Plaintiffs
attempt to argue that the question of when they actually discovered their claim is factual and thus
cannot be decided on a motion to dismiss. Pls.’ Opp’n to Mot. to Dismiss Am. Compl., ECF No.
18 [hereinafter Pls.’ Opp’n], at 14-15 (“Knowledge of wrongful conduct through outside events is
a factual question to be resolved by a jury and cannot be decided as a matter of law.” (citing
Dawson v. Eli Lilly & Co., 543 F. Supp. 1330, 1334 (D.C. Cir. 1982))). They fail to acknowledge,
however, that a statute-of-limitations defense may be properly asserted on a motion to dismiss
under Rule 12(b)(6). “An affirmative defense that claims are barred by the statute of limitations
may be asserted in a Rule 12(b)(6) motion ‘when the facts that give rise to the defense are clear
from the face of the complaint.’” See Newland v. Aurora Loan Servs., LLC, 806 F. Supp. 2d 65,
70 (D.D.C. 2011) (quoting Smith–Haynie v. District of Columbia, 155 F.3d 575, 578 (D.C. Cir.
1998)).
When applying the discovery rule on a motion to dismiss, the court does not evaluate when,
according to the complaint, the plaintiff first learned of his injury and its cause. Rather, the court,
drawing all inferences in the plaintiff’s favor, must ask: (1) when, if the plaintiff had exercised
reasonable diligence in the conduct of his affairs, he would have discovered the facts relevant to
his claim; and, (2) based on that determination, whether the plaintiff brought suit within the
applicable limitations period. See Ray v. Queen, 747 A.2d 1137, 1141-42 (D.C. 2000) (“In order
for the statute of limitations to begin to run, it is only necessary that the plaintiff have inquiry
7
notice of the existence of a cause of action. . . . The critical question in assessing the existence vel
non of inquiry notice is whether the plaintiff exercised reasonable diligence under the
circumstances in acting or failing to act on whatever information was available to him.”); Diamond
v. Davis, 680 A.2d 364, 381 (D.C. 1987) (per curiam) (stating that “[i]n every case, the plaintiff
has a duty to investigate matters affecting her affairs with reasonable diligence under all of the
circumstances”).
Here, a reasonably diligent person would have learned of Defendant’s alleged malfeasance
earlier than May 7, 2012—the day Plaintiffs received the Notice of Foreclosure from the
Interdonatos and the day they claim they first learned of the injury allegedly inflicted on them by
Defendant. See Pls.’ Opp’n at 15. At that point, Plaintiffs’ lawsuit had been settled for eighteen
months, since October 10, 2010. During that year and a half, there would have been minimal
activity—certainly none in court—on the Interdonato matter. Plaintiffs had a duty to investigate
why their case remained dormant for such an extended period of time. See Diamond, 680 A.2d at
381. Through reasonable diligence—whether by checking the public record or seeking the advice
of another lawyer—Plaintiffs could have learned that the reason for the inactivity was that
Defendant had, allegedly without Plaintiffs’ full knowledge and consent, entered into a settlement
that ended the case. Therefore, even if Plaintiffs’ claims against Defendant did not start to accrue
on the date of the Settlement itself, they certainly began to accrue at some point well before they
received the Notice of Foreclosure on May 7, 2012. Accordingly, the court adheres to its original
conclusion: if Plaintiffs “had exercised reasonable diligence, as the ‘discovery rule’ requires, they
would have learned” about Defendant’s alleged malfeasance “well before” May 6, 2012, the outer
boundary of the three-year statute of limitations. Momenian I, 2016 WL 259641 at *5-6.
8
B. Tolling of the Statute of Limitations
Unable to avoid a straightforward application of the discovery rule, Plaintiffs assert that
two equitable tolling principles—the lulling doctrine and the continuous representation rule—
delayed the start of the limitations period, such that their filing of the original Complaint on May
6, 2015, was within the three-year limitations period. The court first considers Plaintiffs’ lulling
argument, and then their assertion that the continuous representation rule should be applied.
1. The Lulling Doctrine
In response to Defendant’s first Motion to Dismiss, Plaintiffs argued that Defendant “ought
not to be able to invoke the protection of the statute of limitations” because he “lull[ed] [Plaintiffs]
into a false sense of security.” Id. at *6 (citing Pls.’ Opp.’n to Mot. to Dismiss, ECF No. 10, at
12). The court found, however, that Plaintiffs had not provided any facts to support such a claim.
Id. at *7 (“Plaintiffs’ Complaint lacks any factual averment to support their lulling assertion.”).
Plaintiffs now advance the same lulling argument based on their Amended Complaint. The
Amended Complaint, they assert, “does contain such [supportive] factual averments,” which “are
corroborated by [Plaintiffs’] Ex. 1 and 2” attached to their Opposition brief. Pls.’ Opp’n at 15.
Specifically, Plaintiffs argue that Defendant lulled them into not bringing an action on their claims
when Defendant (1) submitted a “statement of account” detailing work he had done on the
Interdonato matter through April 2011; (2) said, in response to Houshang Momenian asking “when
[Houshang] would have an opportunity to go before a judge[,]” that he was “working on it”; and
(3) assured Houshang in January 2013 that “‘You did not forfeit any of your rights’ and that ‘this
was just the beginning of what’s going to happen.’” See Pl.’s Opp’n at 15-16.
Under District of Columbia law, “a defendant cannot assert the bar of the statute of
limitations, if it appears [the defendant] has done anything that would tend to lull the plaintiff into
9
inaction, and thereby permit the limitation prescribed by the statute to run.” Bailey v. Greenberg,
516 A.2d 934, 937 (D.C. 1986) (citation and internal quotation marks omitted). District of
Columbia law, however, permits only a narrow reading of the lulling doctrine. Id. In order for
Plaintiffs to successfully assert their lulling argument, they must show that Defendant did
“something that amounted to an affirmative inducement to [P]laintiffs to delay bringing action.”
Bailey, 516 A.2d at 937 (citation and internal quotation marks omitted); see also Jankovic v. Int’l
Crisis Grp., 494 F.3d 1080, 1087 (D.C. Cir. 2007) (quoting Bailey); East v. Graphic Arts Indus.
Joint Pension Trust, 718 A.2d 153, 157 (D.C. 1998) (stating that an act of lulling must involve
“some affirmative action” on the defendant’s part). “‘[M]ere silence, failure to disclose, or
ignorance of facts establishing a claim’ generally do not rise to the level of affirmative
misconduct.” East, 718 A.2d at 157 (citation omitted). A paradigmatic example of lulling is
“when a defendant promises to settle a dispute outside of court[,]” so as to discourage the plaintiff
from filing suit within the statute-of-limitations period. Jankovic, 494 F.3d at 1087; see also
Hornblower v. George Wash. Univ., 31 App. D.C. 64, 75 (1908) (cited in Bailey and Jankovic).4
None of Plaintiffs’ new allegations assert that Defendant engaged in the type of affirmative
conduct that would constitute lulling. First, the “statement of account” sent from Defendant to
Plaintiffs plainly is not the type of affirmative action or promise that would have induced Plaintiffs
4
Cases such as Bailey and Hornblower seem to suggest that the lulling doctrine can trigger the tolling of a limitations
period only if the plaintiff possesses actual knowledge of the facts that give rise to a claim. After all, a defendant
cannot “induce” a plaintiff to “delay” filing suit unless the plaintiff actually knows or believes that the defendant can
be sued in the first place. Here, at least two of Plaintiffs’ claimed acts of lulling—the statement of account delivered
in May 2011 and Defendant’s statements that he was “working on” getting in front of judge—according to Plaintiffs,
occurred before Plaintiffs first learned that Defendant had settled the Interdonato matter with prejudice. See Pls.’
Opp’n at 15 (asserting that Plaintiffs did not “become aware of the problem [with the Settlement]” until May 7, 2012,
when they received the Notice of Foreclosure). Thus, because Plaintiffs claim they did not know of Defendant’s
supposed malpractice at the time Defendant’s alleged lulling actions occurred, the doctrine of lulling arguably does
not even apply. The court need not, however, decide whether a plaintiff’s knowledge of the facts giving rise to a suit
is a necessary element of the lulling doctrine, because none of Defendant’s alleged acts constitute an affirmative
inducement made for the purpose of delaying Plaintiffs from filing suit.
10
to delay bringing an action. The statement only shows that Defendant seemingly continued to
work on—and inform Plaintiffs about his efforts on—the Interdonato matter until April 2011 at
the latest. Am. Compl. ¶ 32; see also Pls.’ Opp’n, Ex. 1, ECF No. 14-1 [hereinafter Ex. 1], at 1.
It cannot plausibly be construed as an attempt by Defendant to keep Plaintiffs from filing suit
against him. See Jankovic, 494 F.2d at 1087 (rejecting lulling claim where the plaintiff had failed
to “allege[ ] [a] specific act of affirmative inducement”).
Likewise, the periodic assurances supposedly made by Defendant that he was “working
on” getting Plaintiffs before a judge also cannot plausibly be interpreted as an attempt to delay or
prevent Plaintiffs from filing suit. A “bare verbal promise” to take some action “at a vague future”
time—which is all that Plaintiffs have alleged—is not the type of affirmative action that supports
a lulling claim. See Bailey, 516 A.2d at 938 (quoting Grass v. Eiker, 135 A.2d 153, 154 (D.C.
1957)).
Finally, the secretly recorded January 2013 conversation between Houshang and
Defendant also does not help Plaintiffs avoid the limitations bar.5 According to Plaintiffs, the
conversation “makes it clear that Houshang did not have an understanding of why he was served
with a foreclosure action by the Interdonatos after settling the claim in October of 2010.” Pls.’
Opp’n at 16. But whether or not Houshang was confused during the conversation is not the critical
inquiry. Rather, the question is whether Defendant affirmatively tried to cause such confusion in
order to induce Plaintiffs to delay bringing suit. The recorded conversation evidences no such
affirmative conduct. If anything, during the conversation, Defendant denied telling Houshang that
5
Defendant argues that the transcript should not be considered by the court because it was not included in the Amended
Complaint. Reply, ECF No. 19, at 6. Plaintiffs do, however, refer to the conversation in their Amended Complaint.
Am. Compl. ¶ 38. It therefore is incorporated into the Complaint and may be considered by the court. See Tellabs,
Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007) (“[C]ourts must consider the complaint in its entirety,
as well as other sources courts ordinarily examine when ruling on Rule 12(b)(6) motions to dismiss, in particular,
documents incorporated into the complaint by reference . . . .”).
11
they would appear before a judge specifically regarding the Settlement. See, e.g., Pls.’ Mot., Ex.
2, ECF No. 19-1 [hereinafter Ex. 2], at 8, 24. Instead, he re-explained their previous litigation
strategy, which was premised in part on the idea that Plaintiffs could not prove their case before a
judge. See, e.g., id. at 26, 53. Defendant apparently anticipated that the Interdonatos would bring
a lawsuit against Plaintiffs after they settled the first matter, and, in response, Defendant planned
to raise certain defenses that he believed could not be raised in the original lawsuit. E.g., id. at 27-
28, 32-38, 43. At worst, Defendant’s statements suggest an ill-advised or poorly explained
litigation strategy. But they do not constitute an attempt—prior to or concurrent with the January
2013 conversation—to lull Plaintiffs into inaction.
2. The Continuous Representation Rule
Plaintiffs also assert that the statute of limitations for their claims was tolled for another
reason: the continuous representation rule. See Pls.’ Opp’n at 17-19. The “continuous
representation” rule is a doctrine applicable in cases alleging malfeasance by a lawyer. It functions
to “toll[ ] the statute of limitations on legal malpractice claims until ‘the attorney’s representation
concerning the particular matter in issue is terminated—even if the client was on actual or inquiry
notice of the attorney’s malpractice before then.” Rocha v. Brown & Gould, LLP, 101 F. Supp. 3d
52, 68 (D.D.C. 2015), aff’d, No. 15-7053 (D.C. Cir. Mar. 30, 2016); Bradley v. Nat’l Ass’n of Sec.
Dealers Dispute Resolution, Inc., 433 F.3d 846, 850 (D.C. Cir. 2005). The primary purpose of the
rule is “to avoid placing a client in the untenable position of suing his attorney while the latter
continues to represent him”; the rule aims to “permit[ ] attempts to repair the attorney-client
relationship or at least to end it amicably.” Williams v. Mordkofsky, 901 F.2d 158, 162-63 (D.C.
Cir. 1990).
12
According to Plaintiffs, “Houshang reasonably considered Defendant, as his long-time
lawyer, to still be representing him in connection with the Interdonato matter” as of January 2013.
Pls.’ Opp’n at 19. Plaintiffs appear to contend that therefore, under the continuous representation
doctrine, the statute of limitations did not begin to accrue until at least that date, and, thus, their
Complaint, filed on May 6, 2015, would fall within the relevant three-year statute-of-limitations
period. See id. The question before the court, then, is whether, based on the Amended Complaint’s
allegations, Defendant’s representation of Plaintiffs in the “particular matter at issue”—i.e., the
Interdonato settlement matter—continued past May 6, 2012. If the representation did not continue
past that date, the statute of limitations would have begun to accrue more than three years before
Plaintiffs filed their Complaint.
Plaintiffs argue that the same documents that show that Defendant lulled them into inaction
also establish that Defendant continuously represented them through at least January 2013.
See Pls.’ Opp’n at 19. First, Plaintiffs point to the “statement of account” sent by Defendant to
Houshang, which shows that from December 2010 to April 2011, Defendant notified Plaintiff of
ongoing work related to Plaintiffs’ “promissory note” with the Interdonatos, although he did not
charge Plaintiffs a fee for those efforts. See Ex. 1. Even if the court assumes that that the ongoing
work was specifically related to the earlier Settlement, the statement of account does nothing to
establish an ongoing attorney-client relationship past May 6, 2012. Rather, at most, it only
establishes an ongoing attorney-client relationship through April 2011—which means that the
statute of limitations would be tolled through that date at the latest, and not through May 6, 2012,
as Plaintiffs must plausibly allege to avoid the limitations bar.
Second, Plaintiffs argue that the January 2013 conversation between Houshang and
Defendant demonstrates that Houshang continued to believe that Defendant was still representing
13
him in the Interdonato matter. Pls.’ Opp’n at 19. According to Plaintiffs, “Defendant had been
representing Houshang in a variety of matters over a lengthy period of time[,]” Am. Compl. ¶ 7,
and his conversation with Houshang shows that Houshang “still considered Defendant to be his
lawyer and was looking for information as to how he could overcome a res judicata argument”
related to the Interdonato matter, Pls.’ Opp’n at 19.
Although Plaintiffs are correct that “a client’s perception of an attorney as his counsel is a
consideration [for the court] in determining whether a[n attorney-client] relationship exists,”
Matter of Lieber, 442 A.2d 153, 156 (D.C. 1982), it is also true that “the continuous representation
rule does not apply where . . . the client finds new representation in the same matter,” Jones v.
Lattimer, 29 F. Supp. 3d 5, 15 (D.D.C. 2014). Here, Plaintiffs have expressly alleged that, as of
June 14, 2012—six months before the recorded conversation—they hired “new counsel” to assist
them in avoiding foreclosure by suing, and later settling with, the Interdonatos. Am. Compl. ¶¶ 35-
36. Thus, even by Plaintiffs’ own account, Plaintiffs terminated Defendant’s representation as to
the Interdonato matter at least as of June 14, 2012, precluding application of the continuous
representation rule after that date.
Admittedly, June 14, 2012, is within the statute of limitations at issue in this case, and
therefore, if Defendant continued to represent Plaintiffs through that date, Plaintiffs could invoke
the continuous representation rule and avoid the limitations bar. Plaintiffs, however, do not allege
any facts that would support the inference that the attorney-client relationship with respect to the
Interdonato matter continued until June 14, 2012—or even past May 6, 2012. To the contrary, the
Amended Complaint alleges little more than that, “[d]uring 2011 and early 2012, Houshang
telephoned Defendant approximately every three months to discuss the Interdonato matter as well
as another pending case.” Compl. ¶ 33. But that vague allegation is simply not enough to establish
14
that Defendant’s representation of Plaintiffs continued past May 6, 2012 and, therefore, it cannot
bring Plaintiffs’ claims within the statute of limitations.
For starters, “[e]arly 2012” is at best an ambiguous phrase, which, even under a generous
reading, does not extend the attorney-client relationship into the critical time period of May 2012.
Moreover, the continuous representation rule does not apply to a lawyer’s “minimal participation
in . . . ongoing affairs.” Encyclopedia Britannica, Inc. v. Dickstein Shapiro, LLP, Civ No. 10-cv-
0454 (JDB), 2012 WL 8466139, at *15 (D.D.C. Feb. 2, 2012); see also Rocha, 101 F. Supp. 3d at
72 (“The Court declines to apply the continuous representation rule in a way that would punish
attorneys for providing such minimal assistance to protect their client’s rights after the initial
matter concludes.”). This limitation on the rule exists because, if it did not, attorneys “would have
substantial disincentives from providing even the barest assistance to clients regarding matters in
which they are knowledgeable based on their prior representation of the client.” Encyclopedia
Britannica, 2012 WL 8466139 at *15.
In Encyclopedia Britannica, the court held that a telephone call between two law firms
regarding litigation related to previous work done by one of the firms, which no longer represented
the client, was insufficient to invoke the continuous representation rule. See id. Similarly, the
court here concludes that Defendant’s alleged quarterly telephone calls with Houshang “to discuss
the Interdonto matter as well as another pending case”—a non-descript allegation, at best—is the
kind of “bare assistance” about a matter that does not toll the limitations period. See also Rocha,
101 F. Supp. 3d at 71-72 (declining to apply the continuous representation rule where a lawyer
had made efforts to negotiate a new retainer for an appeal and to prevent his client from missing
an appellate filing deadline). The court’s conclusion is buttressed by the fact that Plaintiffs do not
make a single reference to any sort of statement of account sent to them by Defendant regarding
15
his work on the Interdonato matter at any point after April 2011. Defendant apparently viewed his
work on the Interdonato matter as worthy of notation—although not worthy enough to charge a
fee—until April 2011, but not after that date. The absence of any allegation by Plaintiffs that
Defendant sent them additional statements of account—not even statements of account referencing
their alleged quarterly phone calls—underscores that such activity by Defendant, if it occurred,
constituted no more than Defendant’s “minimal participation in . . . ongoing affairs.” On the facts
alleged, Plaintiffs’ otherwise time-barred claims cannot be saved by the continuous representation
rule.
***
The court here gave Plaintiffs an opportunity to re-plead their Complaint to avoid the
statute-of-limitations bar. It was Plaintiffs’ burden to allege facts that would have enabled the
court to plausibly infer that the limitations period had been tolled either by Defendant’s efforts to
lull Plaintiffs into inaction, his continuing representation of Plaintiffs, or some other equitable
tolling theory. Plaintiff, however, has failed to successfully plead facts on which the relevant
statute of limitations may be tolled. Accordingly, with Plaintiff now having twice failed to assert
timely claims against Defendant, the court will dismiss both Plaintiffs’ Amended Complaint, and
this action in its entirety, with prejudice.
V. CONCLUSION
For the foregoing reasons, the court grants Defendant’s Motion to Dismiss and dismisses
this action in its entirety with prejudice. A separate order accompanies this Memorandum Opinion.
Dated: September 19, 2016 Amit P. Mehta
United States District Judge
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