G & E Real Estate, Inc. v. Avison Young - Washington, D.C., LLC ( 2022 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
G&E REAL ESTATE, INC.,
Plaintiff,
v. Civil Action No. 14-0418 (CKK)
BRUCE B. MCNAIR and DAVID
ROEHRENBECK,
Defendants.
MEMORANDUM OPINION
(December 1, 2022)
Pending before the Court are Defendants Bruce B. McNair (“McNair”) and David
Roehrenbeck’s (“Roehrenbeck” and, collectively, “Defendants”) [247] Motion for Summary
Judgment. On February 27, 2020, the Court entered an order holding this motion in abeyance
pending supplemental briefing. Although the Court suggested at that time that only a portion of
this case was susceptible of summary judgment, upon further review of the relevant portions of
the record, the Court concludes that the three remaining counts of Plaintiff’s complaint fail as a
matter of law. Therefore, and upon consideration of the briefing, 1 relevant legal authorities, and
the relevant record, [247] Motion for Summary Judgment is GRANTED.
1
This Memorandum Opinion has focused on the following documents:
• Second Amended Complaint, ECF No. 230 (“Second Am. Compl.”);
• Motion for Summary Judgment, ECF No. 247 (“Mot. for Summ. J.”);
• Plaintiff’s Response in Opposition to Defendant’s Motion for Summary Judgment, ECF
No. 250 (Pl.’s Resp.”);
• Plaintiff’s Response to Defendants’ Statement of Material Facts not in Dispute and
Statement of Additional Material Facts in Genuine Dispute, ECF No. 250-1 (“SMF”);
• Reply to Plaintiff’s Opposition to Defendant’s Motion for Summary Judgment, ECF No.
252 (“Def.’s Reply”);
• Assignment of Claim, ECF No. 250-32 (“Assignment”); and
• Plaintiff’s Surreply, ECF No. 260 (“Surreply”).
The Court concludes that oral argument would not be of assistance in disposing of this matter.
1
I. BACKGROUND
The Court previously summarized the background to this case in its earlier resolution of
motions for summary judgment, see G&E Real Estate, Inc. v. Avison Young–Washington, D.C.,
LLC, 168 F. Supp. 3d 147, 151–52 (D.D.C. 2016) (“G&E I”), ECF No. 138, and a motion to amend
the complaint, see G&E Real Estate, Inc. v. Avison Young–Washington, D.C., LLC, 2018 WL
4680199, at *1–*2 (D.D.C. Sept. 28, 2018) (“G&E II”), ECF No. 221. The Court restates only the
background necessary to resolve the present motion. For further background, the Court refers the
reader to G&E I and G&E II.
A. Procedural Background
On October 15, 2013, G&E Real Estate, Inc, doing business as Newmark (“Plaintiff”) filed
a complaint against Defendants Avison Young – Washington D.C. LLC (“Avison Young”),
Analytic Services, Inc (“ANSER”), Bruce B. McNair (“McNair”), Joseph F Peyton (“Peyton”),
and David Roehrenbeck (“Roehrenbeck”) in the United States District Court for the Eastern
District of Virginia. G&E I at 151. Plaintiff’s initial complaint contained ten counts against the
various defendants arising out of Avison Young’s allegedly improper decision to enter into a
Tenant Representation Agreement (“TRA”) with ANSER. Id. at 14-22. After various procedural
maneuverings, Plaintiff filed its first amended complaint on December 23, 2013. First Am. Compl.,
ECF No. 31 at 26. The case was subsequently transferred to this Court on March 14, 2014. Order,
ECF No. 72 at 3.
Following transfer, and after discovery, all defendants moved for summary judgment.
ANSER Mot. for Summ J., ECF No. 125; Avison Young Mot. for Summ. J., ECF No. 127. The
Court granted summary judgment on most of the claims in the case, leaving Plaintiff with three
remaining claims: a breach of contract claim against McNair, a breach of fiduciary duty claim
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against McNair, and a breach of contract claim against Roehrenbeck. See G&E I, 168 F. Supp. 3d
at 168–69. The Court subsequently permitted Plaintiff to amend its complaint, resulting in the
Second Amended Complaint, ECF No. 230. See G&E Real Estate, Inc. v. Avison Young-
Washington, D.C., LLC, Civil Action No. 14-418, 2018 WL 4680199 at *7 (D.D.C. 2018).
Then, at the status hearing held on May 17, 2019, Defendants requested leave to file a
second summary judgment motion based on allegations in the Second Amended Complaint. See
May 17, 2019 Status Hearing Tr., ECF No. 248, at 3:24–7:6. The Court granted Defendants leave
to file over Plaintiff’s objection and set a briefing schedule. See id. at 7:24–8:5; May 20, 2019
Scheduling and Procedures Order, ECF No. 244. Defendants have since filed the instant Motion
for Summary Judgment, ECF No. 247, which Plaintiff opposes. The Court also granted Plaintiff
the right to file a surreply addressing a contractual issue raised for the first time in Avison Young’s
response to Plaintiff’s opposition to the second motion for summary judgment. See G&E Real
Estate, Inc. v. Avison Young, Civil Action No. 14-418, 2020 WL 956469 at *4 (D.D.C. 2020).
Plaintiff promptly filed its surreply. Plaintiff’s Surreply, ECF No. 260.
B. Factual Background
Before proceeding to the factual background in earnest, the Court notes that the following
is either undisputed and/or unrebutted unless otherwise stated. At times, for the purposes of
resolving the motion, the Court takes certain portions of the operative complaint as true, explaining
later that Plaintiff’s claims fail as a matter of law even doing so. Given the multitude of individuals
and organizations relevant to this litigation, the Court will first briefly introduce them. Plaintiff is
a Delaware corporation with its principal place of business in New York and operates a real-estate
brokerage company in the Commonwealth of Virginia. SMF at 3. Defendant McNair is a former
employee of Plaintiff’s corporate forbear, Grubb & Ellis (“G&E”) and is currently an employee of
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Avison Young, a competing real estate brokerage. Id. at 3-4. Defendant Roehrenbeck is also a
former employee of Plaintiff’s corporate forbear and works with McNair at Avison Young. Id. at
4. G&E was a national real estate brokerage service which filed for Chapter 11 bankruptcy on
February 20, 2012. Id. at 22. Finally, BGC Partners, Inc (“BGC”) is a New York-based company,
which purchased certain assets of G&E during bankruptcy. G&E I at 151.
On June 16, 2006, McNair entered into an employment contract to serve as an Executive
Vice President at G&E. SMF at 3. Among other things, the contract set certain conditions for
McNair’s termination, including a particularly salient “adequate justification” clause, which
permitted McNair to voluntarily terminate the contract without being subject to various
noncompete, confidential information, and trade secret provisions. ECF No. 222-2 at 6-8.
Furthermore, the contract suggests that McNair and his team were expected to work out of G&E’s
Washington, DC office. Id. at 5. Roehrenbeck entered into an employment agreement with G&E
on April 2, 2009 which contained a similar trade secrets and confidentiality provision. Second Am.
ECF No. 1-3 at 1. On September 1, 2011, McNair and G&E renewed the contract for five years.
See id. at 10. The 2011 contract extension confirmed that Roehrenbeck was a member of McNair’s
team. Ex. B. at 24. 2
In their capacity as employees of G&E, McNair and his team provided brokerage services
to ANSER, a federal contractor in the fields of national security, homeland security, and public
safety. See G&E I at 151. ANSER had entered into a Tenant Representation Agreement (“TRA”)
with G&E which recognized G&E as ANSER’s exclusive real estate representative. Second Am.
Compl. ¶ 59. Plaintiff alleges that, during that time, McNair collaborated with staff at Avison
2
Plaintiff contests that Roehrenbeck was a member of McNair’s team before that date. SMF at
4. For present purposes, that dispute is immaterial.
4
Young to divert the ANSER business to Avison Young, in violation of McNair’s contractual
obligations to G&E. Second Am. Compl. ¶ 2. This collaboration included both McNair and
Roehrenbeck allegedly misappropriating G&E’s confidential information to facilitate the
transition of the ANSER business from G&E to Avison Young. Id. ¶ 4.
In January 2012, G&E did not pay McNair a bonus which McNair argues was contractually
obligated. SMF at 15. On that basis, McNair invoked the “adequate justification” clause and
voluntarily terminated his employment contract with G&E. Ex. 15 (sealed); Second Am. Compl.
¶ 29. Roehrenbeck, as a member of McNair’s team, followed him to Avison Young, allegedly
also taking with him confidential G&E information and trade secrets. Id. ¶¶ 29, 36.
After G&E filed for bankruptcy on February 20, it failed to assume the TRA with ANSER,
thus waiving any rights it or its bankruptcy estate had to enforce the contract. G&E I, 168 F. Supp.
3d at 162. Subsequently, on April 11, 2012, ANSER entered into a tenant-representation
agreement with Avison Young. Second Am. Compl. ¶ 96. Then, on June 11, 2012, ANSER
entered into a lease for a property and paid Avison Young a commission of $1,224,387.01 for its
services locating the property and closing the deal. Id. ¶ 97. Plaintiff maintains that it is legally
due this Commission.
On or about April 5, 2012, BGC purchased “substantially all” of G&E’s bankruptcy estate.
Id. ¶ 54. BGC then executed an assignment of claims (“Assignment of Claim” or “Assignment”)
with Plaintiff upon which Plaintiff now bases its standing to bring the present action. Id. ¶ 1.
Plaintiff seeks damages no less than $600,00 for the commission wrongfully paid to Avison Young
in connection with the June ANSER lease, and disgorgement of sums wrongfully paid to McNair
as a result of his multiple breaches of fiduciary duty in an amount no less than $1,600,000. Id. ¶
5
¶123-24. In sum, three theories of liability remain: (1) breach of contract against McNair, (2)
breach of contract against Roehrenbeck, and (3) breach of fiduciary duty against McNair.
II. LEGAL STANDARD
Summary judgment is appropriate where “the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a). The mere existence of some factual dispute is insufficient on its own to bar summary
judgment; the dispute must pertain to a “material” fact. Id. Accordingly, “[o]nly disputes over
facts that might affect the outcome of the suit under the governing law will properly preclude the
entry of summary judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Nor
may summary judgment be avoided based on just any disagreement as to the relevant facts; the
dispute must be “genuine,” meaning that there must be sufficient admissible evidence for a
reasonable trier of fact to find for the non-movant. Id.In order to establish that a fact is or cannot be genuinely disputed, a party must (A) cite to
specific parts of the record—including deposition testimony, documentary evidence, affidavits or
declarations, or other competent evidence—in support of its position, or (B) demonstrate that the
materials relied upon by the opposing party do not actually establish the absence or presence of a
genuine dispute. Fed. R. Civ. P. 56(c)(1). Conclusory assertions offered without any factual basis
in the record cannot create a genuine dispute sufficient to survive summary judgment. See Ass’n
of Flight Attendants-CWA, AFL-CIO v. U.S. Dep’t of Transp., 564 F.3d 462, 465–66 (D.C. Cir.
2009). Moreover, where “a party fails to properly support an assertion of fact or fails to properly
address another party’s assertion of fact,” the district court may “consider the fact undisputed for
purposes of the motion.” Fed. R. Civ. P. 56(e).
6
When faced with a motion for summary judgment, the district court may not make
credibility determinations or weigh the evidence; instead, the evidence must be analyzed in the
light most favorable to the non-movant, with all justifiable inferences drawn in her favor. Liberty
Lobby, 477 U.S. at 255. If material facts are genuinely in dispute, or undisputed facts are
susceptible to divergent yet justifiable inferences, summary judgment is inappropriate. Moore v.
Hartman, 571 F.3d 62, 66 (D.C. Cir. 2009). In the end, the district court’s task is to determine
“whether the evidence presents a sufficient disagreement to require submission to a jury or whether
it is so one-sided that one party must prevail as a matter of law.” Liberty Lobby, 477 U.S. at 251–
52. In this regard, the non-movant must “do more than simply show that there is some
metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio
Corp., 475 U.S. 574, 586 (1986). “If the evidence is merely colorable, or is not significantly
probative, summary judgment may be granted.” Liberty Lobby, 477 U.S. at 249–50 (internal
citations omitted).
III. DISCUSSION
The pending Motion raises three substantial issues for resolution. First, as a threshold
matter, the Court must determine whether Plaintiff has standing to bring its claims, i.e., whether it
is in privity with pre-bankruptcy G&A. Plaintiff bases its standing on a contract executed between
Plaintiff and BGC, the “Assignment of Claims” discussed above. Second Am. Compl. ¶ 1. In
response to this Court’s ruling in G&E I that Plaintiff and BGC have no rights under the TRA as
discussed in the Assignment of Claims, Plaintiff finds a right to the Commission elsewhere in the
Assignment to Claims. In short, the Court agrees that the Assignment of Claims conveys a right
to recover the Commission under a breach-of-contract theory, but it does not permit recovery on a
claim of breach of fiduciary duty. Because G&E’s breach-of-contract claim accrued before
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bankruptcy, the G&E bankruptcy estate “owned” the claim when BGC purchased the G&E
bankruptcy estate. However, any claim of breach of fiduciary duty accrued after G&E filed its
bankruptcy petition. As such, BGC could not purchase a claim of breach of fiduciary duty from
the G&E bankruptcy estate, so BGC could not assign that claim to Plaintiff (or any other entity).
Second, although Plaintiff has standing to recover the Commission on its Plaintiff’s
breach-of-contract theory, such a theory fails as a matter of law. Construing all material facts in
the light most favorable to Plaintiff, Plaintiff nevertheless cannot show that any breach on the part
of Defendants proximately caused G&E to lose the Commission due under the terminated TRA.
Finally, fearing the Court might conclude that Plaintiff lacks standing as to its breach-of-
contract theory as well, Plaintiff in its surreply asks in the alternative for leave to file, in effect, a
third amended complaint. Surreply at 10. Because judicial economy would not be served by a
fourth bite at the apple after over eight years of litigation, the Court denies leave to amend and
enters judgment in favor of Defendants.
A. Standing and Breach-of-Contract Claims
1. BGC Purchase Agreement – Breach of Contract Claim Assumption
Defendants first argue that Plaintiff lacks standing to recover on its breach-of-contract
claim against McNair and Roehrenbeck because G&E failed to assume their employment contracts
upon filing for bankruptcy. Mot. for Summ. J. at 9. This argument misunderstands Plaintiff’s
position. Plaintiff seeks damages for breach of contract and relies upon an assignment conferring
all rights to such damages arising under that claim. Pl.’s Resp. at 32-33. The question is not
whether G&E properly assumed the employment contracts upon filing for bankruptcy, but rather
whether G&E could have had such rights at the time of assignment. As discussed next, the answer
depends on when the claim accrued.
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2. BGC Purchase Agreement – Breach of Contract Claim Accrual
The Court begins with the axiomatic principle that the G&E bankruptcy estate, which sold
all right to the Commission to BGC, could only assign that which it owned. A bankruptcy estate
includes only “all legal or equitable interests of the debtor in property as of the commencement of
the case.” 11 USCA § 541(a)(1). As such, only legal claims which accrued prior to the filing of
the bankruptcy petition are owned by the bankruptcy estate. In re Blasingame, 986 F.3d 633, 638-
39 (6th Cir. 2021); see also In re Glaser, 816 F. App’x 103, 104 (9th Cir. 2020). To determine
whether BGC purchased the breach of contract claims when it purchased substantially all of BGC’s
bankruptcy estate, the Court must adjudge whether the breach of contract claims accrued prior to
G&E’s filing for bankruptcy.
Federal courts defer to state law to determine when a claim accrues for purposes of
inclusion in a bankruptcy estate. In re Witko, 374 F.3d 1040, 1043 (11th Cir. 2004). 3 Choice of
law begins first by looking to the choice-of-law rules of the forum state. 4 In re APA Assessment
Fee Litig., 766 F.3d 39, 51 (D.C. Cir. 2014). Because the Assignment of Claim includes no choice-
of-law provision, the Court must identify the jurisdiction with the most significant relationship to
the dispute by using the four factors enumerated in the Restatement (Second) of Conflict of Law
§ 145. Washkoviak v. Student Loan Mktg. Ass'n, 900 A.2d 168, 180 (D.C. 2006). These factors
are: (1) the place where the injury occurred; (2) the place where the conduct causing the injury
occurred; (3) the domicile, residence, nationality, place of incorporation and place of business of
the parties; and (4) the place where the relationship is centered. Id.3
Accord In re Glaser, 816 F. App’x 103, 104 (9th Cir. 2020); In re Underhill, 579 F. App’x
480, 482 (6th Cir. 2014).
4
The parties do not contest choice-of-law in their briefing, perhaps because they view the issue
as non-dispositive. Regardless, the Court engages with this issue here, if only briefly.
9
First, because G&E was located in the District of Columbia, and the injury was to G&E’s
pecuniary interest, the injury occurred in the District of Columbia. Second, it would appear that
the conduct causing the injury occurred in both Virginia and the District of Columbia insofar as
Defendants worked out of a District of Columbia office for a deal on real estate in Virginia. Third,
the relationships between the parties reside predominantly within the District of Columbia––G&E
had an office located in D.C., McNair was a resident of Maryland, Roehrenbeck was a resident of
D.C., and Defendants were based in the District of Columbia. Second Am. Compl. ¶¶ 9, 10, 67,
69, 83, 97, Ex. B. at 4 (Roehrenbeck contract). Therefore, the parties’ relationship appears to have
been centered in the District of Columbia. As such, the jurisdiction with the most significant
relationship to the claims at issue is the District of Columbia, and D.C. law applies.
Under District of Columbia law, a breach-of-contract claim accrues at the time of the
breach, even if no injury has occurred. See, e.g., Wright v. Howard Univ., 60 A.3d 749, 753 (D.C.
2013); Bedell v. Inver Hous., Inc., 506 A.2d 202, 205 (D.C. 1986). A breach occurs when the
party fails to perform when performance is due. Eastbanc, Inc. v. Georgetown Park Assocs. II,
940 A.2d 996, 1004 (D.C. 2008) (Fisher, J.) (citing 9 Arthur L. Corbin, Corbin on Contracts § 943
(interim ed. 2002)). In the instant case, McNair’s employment agreement imposed upon him a
fiduciary in favor of G&E and to contribute all rights to all real-estate brokerage and services
opportunities, commissions, and fees to G&E, among other duties. ECF No. 1-2 at 15 (McNair
contract). Similarly, Roehrenbeck’s contract prohibited him from using G&E’s confidential
information, including work product, client information, and trade secrets for any purpose other
than in connection with G&E’s business. ECF No. 1-3 at 1 (Roehrenbeck contract). McNair and
Roehrenbeck’s contracts also required their compliance with G&E’s Employee Handbook, which
stated in part that employees were not to engage in any conduct that would create an actual or
10
potential conflict of interest with the best interests of G&E. See id.; Second Am. Compl. ¶¶ 46,
47.
However, Plaintiff alleges that McNair breached his contract when he failed to perform
these duties by working to divert the ANSER transaction to Avison Young as early as April 2011.
Second Am. Compl. ¶ 2. Subsequently, Plaintiff alleges Roehrenbeck breached his contract on
February 10, 2012 when he allegedly stole confidential information related to the ANSER client.
Second Am. Compl. ¶ 36. Therefore, taking these allegations as true, Plaintiff’s claims against
Defendants accrued before G&E filed a bankruptcy petition on February 20, 2012. As such, both
claims were a part of G&E’s bankruptcy estate, and BGC lawfully purchased them through the
Asset Purchase Agreement.
3. Extent of Assignment under Assignment of Claim Agreement
Defendants next argue that Plaintiff cannot bring its claims because BGC only assigned to
Plaintiff the right to pursue claims arising from the TRA, not any of BGC’s claims to the
Commission. Mot. for Summ J. at 2. Defendants emphasize the Court’s previous ruling in G&E I.
Id. There, the Court first noted that contracts which are executory at the time a party files for
bankruptcy may be assumed, assigned, or rejected by the party. G&E I, 168 F. Supp. 3d at 154.
G&E I concluded that the TRA remained executory at the time G&E filed for bankruptcy because
it had not been breached. Id. at 158. Therefore G&E had no rights under it because it failed to
assign or assume it. Id. at 158. Plaintiff counters that it now bases its claims not upon any rights
under the TRA, but instead on its assigned right to the Commission. Pl.’s Resp. at 22-23. Plaintiff
has the better of the argument.
11
Because New York law governs the Assignment of Claim, 5 the Court begins, as New York
law provides, with the text. Slatt v. Slatt, 477 N.E.2d 1099, 1099 (N.Y. 1985). The Assignment
of Claim provides, in two separate recitals:
C. Among the G&E tangible intangible assets purchased by G&E was all of G&E’s
right, title and claim to, interest in, and entitlement to receive the payment of, the
real estate commission earned in connection with the lease…to Analytic Services
(“Tenant”) of office space located in the Skyline Technology Center in Falls
Church, Virginia (the “Commission”), pursuant to the Written Exclusive Tenant
Representation Agreement dated September 23, 2011, entered into by and between
Tenant and G&E (the “Agreement”).”
D. By their execution of this Assignment, BGC intends to assign to its wholly
owned-subsidiary, NGKF, all of G&E’s right, title and claim to, interest in, and
entitlement to the Commission, and all of G&E’s right, title and claim to, and
interest in, the Agreement (jointly, the “Assigned Matter”), and NGKF intends to
accept the assignment thereof from BGC.
Assignment of Claim, ECF No. 125-8, ¶¶ C-D. The Assignment also contains the following
operative language: “BGC hereby assigns to NGKF all rights, interests, claims, demands, causes
of action, and choses in action asserted in or related to the Assigned Matter.” Id. ¶ 1.
Under New York law, agreements are construed in accord with the parties’ intent by
analyzing the plain meaning of the provisions of the contract. See, e.g., Slatt, 447 N.E.2d at 1099.
Additionally, New York law distinguishes between recitals and operative language, and
emphasizes that recitals may be disregarded where they conflict with the operative clauses.
Kaloyeros v. Rsch. Found. of State Univ. of New York, 71 Misc. 3d 129(A), 2021 WL 1899401, at
*11 (N.Y. Sup. Ct. 2021); (quoting Musman v Modern Deb, 56 A.D.2d 752, 753 (N.Y. App. Div.
1972)); Rubinstein Bros. v. Ole of 34th St., Inc., 101 Misc. 2d 563, 567 (N.Y. Civ. Ct. 1979).
5
BGC and Plaintiff are based in New York and the Assignment of Claim contract between them
contains a New York choice-of-law provision. Surreply at 4; Assignment ¶ 6. The contract’s
choice of law provision governs because there is a reasonable relationship between the parties
and the chosen state. Robert Half Int’l Inc. v. Billingham, 315 F. Supp. 3d 419, 427 (D.D.C.
2018).
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Here, contract, by its plain meaning, assigned to Plaintiff the right to pursue claims against
Defendants flowing from two separate sources, the Commission and the TRA. Assignment ¶ D.
The “Assigned Matter” is referred to by reference to the Commission and the TRA “jointly.” Id.In other words, the Assignment of Claim conveys “all of G&E’s right . . . to the Commission” and
“all of G&E’s right . . . in[] in the [TRA].” Together, these are the “Assigned Matter” and,
separately, these are (1) the Commission and (2) the TRA. Inability to recover under the TRA
does not vitiate the remainder of the “Assigned Matter,” the Commission.
B. Standing and Fiduciary-Duty Claim
Defendants also argue Plaintiff’s breach of fiduciary duty claim did not accrue until post-
petition. Defs.’ Reply at 5. Under D.C. law, “an agent owes her principal a fiduciary duty and a
duty of loyalty.” Gov’t of Rwanda v. Rwanda Working Grp., 227 F. Supp. 2d 45, 63-64 (D.D.C.
2002). An agent-principal relationship is established where the principal indicates that the agent
will act on its behalf and subject to its control, and the agent consents to acting in such a manner.
Rose v. Silver, 394 A.2d 1368, 1371 (D.C. 1978); Restatement (Second) Agency § 1 (Am. L. Inst.
1958). Relevant to this case, a claim for breach of fiduciary duty does not accrue until “injury
accrues to the beneficiary or the fiduciary profits thereby.” Randolph v. ING Life Ins. and Annuity
Co., 973 A.2d 702, 709 (D.C. 2009) (quoting Beckman v. Farmer, 579 A.2d 618, 651 (D.C. 1990)
(internal quotations omitted)). Insofar as Plaintiff grounds a right to the Commission in its breach
of fiduciary duty claim, that claim fails. Assuming, without deciding, that McNair’s employment
relationship with G&E imposed a fiduciary duty upon him, it is uncontested McNair did not
successfully divert the business to Avison Young, or receive the Commission, until June 2012,
months after G&E filed for bankruptcy. SMF at 58. As such, G&E’s claim did not accrue until
13
post-petition, as such, the Assignment of Claim could not transfer any such right to Plaintiff.
Plaintiff’s fiduciary-duty claim therefore fails as a matter of law.
C. Merits of Breach of Contract Claim
1. Adequate Justification Defense
Defendants next argue that no reasonable jury could find for Plaintiff because they were
entitled to rely on the “Adequate Justification” provision of McNair’s contract. The employment
contract is governed by D.C. law, supra at 9-10 (choice of law analysis), so the Court “examines[s]
the document on its face, giving the language its plain meaning.” Tillery v. D.C. Contract Appeals
Bd., 912 A.2d 1169, 1176 (D.C. 2006). These “Adequate Justification” provisions of McNair’s
contract specify circumstances in which McNair was entitled to terminate his employment contract
with G&E. Ex. B. at 29. In those circumstances, the McNair Team, which included Roehrenbeck,
is exempt from various provisions of the employment agreement and G&E’s Employee Handbook.
Ex. B. at 6-7. As relevant here, McNair could terminate the employment agreement with Adequate
Justification in the event of “any failure by [G&E] to pay any compensation to [McNair] when due
in accordance with the terms of the Employment Agreement and [G&E’s] policies.” Ex. B. at 29.
Defendants argue that G&E’s failure to pay McNair a contractually required retention
bonus in January 2012 was such “Adequate Justification.” First Mot. for Summ J. at 10. McNair
subsequently demanded payment and later terminated his relationship with G&E. See SMF at 15-
16. The plain meaning of compensation includes bonuses. Compensation, Black’s Law
Dictionary (11th ed. 2019). Therefore, under the plain meaning of McNair’s employment contract,
he was entitled to terminate his employment agreement with G&E with Adequate Justification.
Plaintiff counters that McNair’s previous material breach of the employment contract
prohibits him from relying on the Adequate Justification provision of the contract. Pl.’s Resp. at
14
36. Plaintiff’s argument is unavailing. In Ashcraft & Gerel v. Coady, the United States Court of
Appeals for the District of Columbia Circuit considered the inverse of the instant case. 244 F.3d
948, 949 (D.C. Cir. 2001) (applying D.C. law). There, a law firm sued one of its employees for
breach of contract, breach of fiduciary duty, and conversion. Id. The employee countered that the
law firm breached the contract first by failing to pay him a semiannual salary bonus. Id. The court
rejected the argument, noting “material breach entitles the injured party to an election of remedies,
including rescission or termination of the contract, not a license to commit torts or otherwise breach
the contract.” Id. at 951. The court emphasized “[b]ecause [the employee] remained at the firm,
he could not ignore his obligations for performance under the employment contract, even if he was
ignorant of the firm's breach.” Id. Similar to the employee’s continuing contractual obligation in
Coady, here, G&E continued to employ McNair, so it could not ignore its obligation to pay him a
retention bonus. Upon failure to pay the bonus, McNair had the right, under the contract, to
terminate his employment agreement with Adequate Justification.
Plaintiff next argues McNair was required to provide G&E 60 days to cure the failure to
pay compensation before terminating the agreement with adequate justification. Pl.’s Resp. at 39.
This argument is also unavailing. The Adequate Justification provision plainly contains 6
independent “events” that would permit McNair to terminate with Adequate Justification. Ex. B.
at 29. While the second event, which is breach of contract broadly, requires a 60-day cure period,
McNair relied upon the fifth event, which does not contain any language requiring a 60-day cure
period. Id.; Ex. 18.
However, Plaintiff does successfully argue that even if the Adequate Justification
provisions apply, they do not entirely absolve Defendants of liability. The Adequate Justification
provisions apply to the McNair Team, which includes Roehrenbeck. Ex. B. at 24. The provisions
15
provide a number of rights to the McNair Team. First, they provide an exemption from the
standard G&E noncompete clause. Ex. B. at 6-7. Second, they provide an exemption from the
trade secrets and work product provisions of the standard G&E employment agreement and manual
as they would apply to the McNair Team’s “Current and Former Clients” and future clients that
did not arise from company leads or resources. Ex. B. at 6-7, 16-17.
However, the provisions do not exempt the McNair Team from the trade secret and work
product provisions as they relate to ANSER, because ANSER was not a “Current and Former
Client” of the McNair team, and the ANSER business was generated through G&E efforts outside
of the McNair team. Ex. B. 22-23; Second. Am. Compl. ¶¶ 55-59. Furthermore, the employment
contract contains no provisions shielding the McNair Team from liability for actions taken in
breach of their contracts during their employment at G&E. See Ex. B. As such, any efforts to
“steal” ANSER business from G&E prior to McNair’s termination in January 2012 are actionable
on Plaintiff’s breach-of-contract theory.
Plaintiff finishes its adequate justification arguments with a laundry list of grievances
against McNair that have no relation to the Commission, and therefore it has no standing to pursue.
This includes Plaintiff’s claim that the Adequate Justification provision does not apply to
confidential Grubb & Ellis business and financial documents unrelated to the ANSER
Commission, and its argument that the Adequate Justification provision does not apply to
McNair’s solicitation of G&E’s employees. Pl.’s Resp. at 42-43. As explained above, the
Assignment of Claim conveys the right to recover the Commission, and not a claim for any and
all ensuing damages.
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2. Proximate Causation
Defendants also argue G&E’s material breach of the TRA is an intervening cause that
prevents Plaintiff from establishing proximate causation. Mot. for Summ. J. at 4-5. Besides
nominal damages, a plaintiff may recover through a breach of contract claim only those damages
for which they can establish the breach of contract was the proximate cause. Exec. Sandwich
Shoppe, Inc. v. Carr Realty Corp., 749 A.2d 724, 736-37 (D.C. 2000); Bedell v. Inver Hous., Inc.,
506 A.2d 202, 205 (D.C. 1986). Proximate cause “is that cause which, in actual continuous
sequence, unbroken by an efficient intervening cause, produces the injury and without which the
injury would not have occurred.” Dutcher v. U.S., 736 F. Supp. 1142, 1146 (D.D.C. 1990) (citing
Wagshal v. District of Columbia, 216 A.2d 172, 175 (D.C. 1966)). In the instant case, Plaintiff
has failed to squarely address the issue of proximate causation.
The sequence of events in this case is crucial to understanding the causal chain. Construing
the facts in the light most favorable to Plaintiff, Defendants’ efforts to steal the ANSER busines in
breach of their employment contracts began well before G&E filed for bankruptcy. Second. Am.
Compl. ¶ 2. Defendants then terminated their employment with G&E with Adequate Justification
and began working for Avison Young on February 13, 2012. Id. at 87. To the extent Defendants’
breach of their employment contract caused the loss of the Commission, they are entitled to the
Commission as their measure of damages. However, on February 20, 2012, G&E filed for
bankruptcy. Id. ¶ 51. Perhaps accidentally, it failed to assume the TRA, thereby materially
breaching it. G&E I, 168 F. Supp. 3d. at 158. After G&E breached the TRA, ANSER paid
Defendants, as employees at Avison Young, a Commission for their services in June 2012.
G&E’s breach of the TRA serves as an “efficient intervening cause” sufficient to defeat a
finding of proximate causation between Defendants’ breach of contracts and the diversion of the
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ANSER commission. See Dutcher, 736 F. Supp. at 1146 (D.D.C. 1990). In this regard, FCE
Benefit Adm'rs, Inc. v. George Washington Univ. is instructive. 209 F. Supp. 2d 232, 234 (D.D.C.
2002). There, an insurer, FCE, sued an insurance agent for breach of contract. Id. at 234. The
contract barred the agent from diverting business to any of FCE’s competitors. Id. at 241. At the
same time, another defendant, an employer on the market for insurance to provide employees,
entered into an agreement to use FCE as its insurance provider. Id. at 235. However, the employer
grew frustrated with the services offered by FCE and worked with the insurance agent to find a
different plan. Id. at 236-37. The agent working with the employer to find a new insurer breached
the agent’s contract with the insurer. Id. at 234. However, it was the employer switching to the
different insurer, and not whatever assistance the agent provided, that was the direct and
intervening cause of all of the insurance company’s losses. Id. at 243. As a result, although the
agent was liable for breach of contract, the employer qua intervening cause limited the company’s
pecuniary recovery from the agent to no more than nominal damages. Id. at 243.
The circumstances here are quite similar to those in FCE. McNair and Roehrenbeck may
have been instrumental in diverting the ANSER deal to Avison Young, but G&E’s breach of the
TRA was the true nail in the coffin. Without G&E’s breach of the TRA, G&E might have still had
the right to the Commission. But G&E forfeited its rights through breach. On this issue, Plaintiff
simply fails to engage. As such, the Court concludes that although Defendants’ breach may have
caused some injury, G&E’s subsequent conduct served as an intervening cause which sealed that
loss. Because Defendants’ breach did not proximately cause G&E’s loss of the Commission, the
Assignment of Claims affords Plaintiff no ability to recover the Commission on its breach-of-
contract theory. The Court notes that while Plaintiff might be entitled to an award of nominal
damages if it can prove the breach of contract claim, it lacks standing to do so given that the
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Assignment of Claim only provides it standing for the Commission. That Plaintiff cannot
reasonably establish that Defendants’ breach of contract proximately caused the loss of the
Commission is fatal to its standing to bring the breach of contract claim in its entirety. Counts I
and II of Plaintiff’s Second Amended Complaint therefore fail as a matter of law.
D. Leave to File Supplemental Pleading
In the alternative, Plaintiff requests leave to file a supplemental pleading addressing a new
assignment of claims executed between BGC and Plaintiff. Surreply at 15. Because the Court
concluded that Counts I and II fail as a matter of law, a supplemental pleading would be relevant
only to Plaintiff’s fiduciary-duty theory.
Under Federal Rule of Civil Procedure 15(d), “…the court may, on just terms, permit a
party to serve a supplemental pleading setting out any transaction, occurrence, or event that
happened after the date of the pleading to be supplemented.” A motion to file a supplemental
pleading should be “freely granted” when it “will not cause undue delay or trial inconvenience,
and will not prejudice the rights of any of the other parties to the action.” Hall v. C.I.A. 437 F.3d
94, 101 (D.C. Cir 2006) (quotations omitted). “When evaluating whether to grant leave to amend,
the Court must consider (1) undue delay; (2) prejudice to the opposing party; (3) futility of the
amendment; (4) bad faith; and (5) whether the plaintiff has previously amended the complaint.”
G&E II at *2 (cleaned up). The closer a case is to resolution, and the longer it has been pending,
the greater the prejudice to the opposing party. See, e.g., Hoffmann v. United States, 266 F. Supp.
2d 27, 34 (D.D.C. 2003) aff’d 96 Fed. Appx. 717 (Fed. Cir 2004).
The Court need not reach the question of futility because all other factors weigh against
permitting a supplemental pleading. As the Court explained in G&E II, the Court granted leave to
file the operative Second Amended Complaint in part because Plaintiff had recently retained new
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counsel who, during late 2016 and 2017, discovered new evidence and documents materially
changing the merits of this case. Id. at *3. Now, Plaintiff seeks to add yet another document
available to it in 2017. It seems quite likely that Plaintiff could have added this document to its
operative Second Amended Complaint but did not do so. Moreover, Plaintiff procrastinated until
the moment of surreply, resulting in even further undue delay. See Hudson v. Am. Fed. of Gov.
Emps., Civ. A. No. 17-1867 (JEB), 2019 WL 3533602, at *3 (D.D.C. Aug. 2, 2019). That standing
issues were only more seriously raised during this latest round of briefing does not make Plaintiff’s
delay any more dilatory, for it is always Plaintiff’s burden to establish standing. Lujan v.
Defenders of Wildlife, 504 U.S. 555, 561 (1992).
To afford Plaintiff a fourth bite at the apple would extend litigation that has already lasted
nearly nine years. See Williamsburg Wax Museum, Inc. v. Historic Figures, Inc., 810 F.2d 243,
247 (D.C. Cir. 1987) (affirming denial of a post-remand motion to amend where the plaintiff
sought to amend the complaint “years after it had filed its original complaint, after the parties had
conducted extensive discovery, and after the district court had granted summary judgment”). As
Hoffman explains, it is “well established that ‘[d]enying leave to amend is particularly appropriate
when a lawsuit is on the verge of final resolution.’” 266 F. Supp. 2d at 34 (quoting Wardell v. City
of Chicago, No. 98 C 8002, 2001 WL 849536, at *4 (N.D. Ill. July 23, 2001) (Rosemond, M.J.)).
This aversion to motions to supplement filed while a court considers a dispositive motion is
particularly strong where the motion would alter the scope of the litigation. See Clean Water Action
v. Pruitt, 315 F. Supp. 3d 72, 84-85 (D.D.C. 2018). Yet another supplemental pleading is not
appropriate where, as here, it is last ditch “effort to avoid an adverse summary judgment ruling.”
See Local 472 of United Ass’n of Journeymen and Apprentices v. Ga. Power Co., 684 F.2d 721,
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724-25 (11th Cir. 1982). Accordingly, the Court concludes that Plaintiff does not warrant leave
to file a supplemental pleading.
IV. CONCLUSION
For the foregoing reasons, the Court GRANTS Defendants’ [247] Motion for Summary
Judgment, DISMISSES Count III for lack of standing, and enters judgment in favor of Defendants
on Counts I and II. An appropriate order accompanies this Memorandum Opinion.
Date: December 1, 2022 ______/s/______________________
COLLEEN KOLLAR-KOTELLY
United States District Judge
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