Jericho Baptist Church Ministries, Inc. v. Jericho Baptist Church Ministries, Inc. ( 2020 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
_________________________________________
)
JERICHO BAPTIST CHURCH MINISTRIES, )
INC. (DISTRICT OF COLUMBIA), )
)
Plaintiff, )
)
v. ) Case No. 16-cv-00647 (APM)
)
JERICHO BAPTIST CHURCH MINISTRIES, )
INC. (MARYLAND), et al., )
)
Defendants. )
_________________________________________ )
MEMORANDUM OPINION AND ORDER
I. INTRODUCTION
Plaintiff Jericho Baptist Church Ministries, Inc. (“Jericho DC”) brings a variety of federal
and state claims against Jericho Baptist Church Ministries, Inc. (“Jericho Maryland”) and its board
members Denise Killen, Clifford Boswell, Gloria McClam-Magruder, Clarence Jackson, and
Dorothy Williams (“Individual Defendants”). Plaintiff claims that Defendants wrongfully wrested
control over Jericho DC, transferred its corporate identity and possessions to Jericho MD, and
misappropriated its assets for personal gain. Defendants seek summary judgment on all claims.
For the reasons that follow, the court grants in part and denies in part Defendants’ motion. The
court notes, however, that several critical legal issues have been inadequately briefed or wholly
ignored by the parties. This Memorandum Opinion & Order resolves only those factual and legal
issues that are sufficiently developed at this juncture. The court will issue a separate Order
identifying the additional issues that must be addressed before this case may proceed to trial.
II. BACKGROUND
A. Factual Background
This controversy began in March 2009 when several Individual Defendants executed a
resolution—Board Resolution 1-09—which purported to install a new slate of members to Jericho
DC’s Board of Trustees, and ousted several longstanding trustees. The legality of this transaction,
which is the linchpin of the instant lawsuit, was fully and finally adjudicated by way of a bench
trial by the District of Columbia Superior Court in George v. Jackson, No. 2013CA0007115, 2015
WL 12601903 (D.C. Super. Ct. July 7, 2015), aff’d, 146 A.3d 405 (D.C. 2016). Defendants in this
case were also defendants in George. See George, 146 A.3d at 411 (listing the defendants in that
case). This court adopts the following factual findings and conclusions of law in that case, as they
satisfy the elements of non-mutual offensive collateral estoppel. See Bank of Am., N.A. v. Jericho
Baptist Church Ministries, Inc., No. PX 15-02953, 2016 WL 4721257, at *4–9 (D. Md. Sept. 9,
2016) (explaining in detail why the George court’s factual findings and conclusions of law meet
the District of Columbia’s standards for non-mutual offensive collateral estoppel).
As of March 2009, Jericho DC’s Board of Trustees (“Board”) consisted of five individuals:
Betty Peebles (the co-founder and leader of the church); Joel Peebles (Betty Peebles’s son and one
of the church’s pastors); William Meadows; Anne Wesley; and Defendant Dorothy Williams.
George, 2015 WL 12601903 ¶¶ 4, 21. On March 15, 2009, four of the five Board members—
Betty Peebles, William Meadows, Anne Wesley, and Defendant Williams—signed Resolution
1-09, which purportedly reconstituted Jericho D.C.’s Board. Id. ¶ 5; see also Pl.’s Exhibits to Am.
Compl., ECF No. 9-1 [hereinafter Am. Compl. Exhibits], Ex. 1, Resolution 1-09 of Board of
Trustees [hereinafter Resolution 1-09], at PDF p. 2. The new Board consisted of carry-over
trustees Betty Peebles and Defendant Williams, as well as seven newly named trustees, including
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Defendants Gloria McClam-Magruder, Denise Killen, and Clarence Jackson. George, 2015 WL
12601903 ¶¶ 5, 21; Resolution 1-09. By implication, Joel Peebles, Anne Wesley, and William
Meadows were removed from the new Board. George, 2015 WL 12601903 ¶¶ 5, 21.
The March 15, 2009 meeting “was not a typical meeting of the Board of Trustees.” Id.
¶ 27. Board member Meadows, for instance, received “no advance notice of a Board meeting”; he
was summoned to Betty Peebles’s office, handed a document by Defendant Killen, and told that
Ms. Peebles wanted him to sign it. Id. ¶ 28. Meadows “assumed that the document was a routine
matter related to the administration of the church, and he had no idea that by signing the document
he was resigning from the Board and voting to elect a new slate of trustees.” Id. No meeting was
ever called to order, no agenda was ever presented, and no vote was ever called. Id. ¶¶ 28, 29.
Joel Peebles, who also was removed from the Board by Resolution 1-09, had no notice of the
decision whatsoever. In fact, he was “deliberately excluded and deprived of notice” of the Board
meeting in which Resolution 1-09 was adopted. Id. ¶ 23. The decision to exclude Joel Peebles
“was not an oversight, but rather was a calculated decision.” Id. ¶ 21.
Unaware that he had been excluded from the Board, Joel Peebles called a Board meeting
in September 2010 to address issues arising from his mother’s imminent death. Id. ¶ 9. The
meeting was attended by William Meadows, Anne Wesley, and Defendant Williams. Id. At the
meeting, Defendant Williams made no mention of Resolution 1-09, “allow[ing] Joel R. Peebles,
William A. Meadows, and Anne Wesley to proceed with the meeting as if they were, in fact,
members of the Board of Trustees.” Id. When asked about this at trial, Defendant Williams
explained “it wasn’t my place” to advise Peebles, Meadows, and Wesley that they were no longer
members of the Board. Id.
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Betty Peebles passed away on October 12, 2010. Id. ¶ 12. Less than a month later, on
November 1, 2010, the five Individual Defendants in this case and one other person incorporated
a new entity in Maryland under the same name as the District of Columbia entity, “Jericho Baptist
Church Ministries, Inc.” Id. ¶ 11; see also Am. Compl. Exhibits, Ex. 5, Articles of Incorporation
of Jericho MD, at PDF pp. 33, 36. That same day, Articles of Merger were filed with the District
of Columbia Department of Regulatory Affairs indicating that, pursuant to a vote by the Board of
Trustees of Jericho DC on October 30, 2010, Jericho DC was merged into Jericho MD, and that
the surviving entity, Jericho MD, would no longer be governed by the laws of the District of
Columbia. See George, 2015 WL 12601903 ¶ 11; see also Am. Compl. Exhibits, Ex. 3, Articles
of Merger, at PDF p. 25; id., Ex. 4, Certificate of Merger, at PDF p. 30. Various assets of Jericho
DC, including its bank accounts, tax identification number, and financial holdings, were then
transferred to Jericho MD. See Defs.’ Statement of Material Facts Not in Dispute, ECF No. 69
[hereinafter Defs.’ SOMF], ¶¶ 103–105 (listing various bank accounts held by Jericho MD that
were previously held by Jericho DC or contained funds belonging to Jericho DC); Defs.’ Mot.,
App’x of Exhibits, ECF No. 66-1 [hereinafter Exhibits to Defs.’ Mot.], Ex. O, Corrected Mem.
Op. & Order, at PDF p. 149 (stating that Jericho MD opened an account at Citibank and transferred
millions of dollars by check from Jericho DC’s bank accounts using Jericho DC’s tax identification
number); Pl.’s Exhibits to Pl.’s Opp’n, ECF No. 72 [hereinafter Exhibits to Pl.’s Opp’n], Ex. 2,
Aff. of Denise Killen, ECF No. 72-3 (suggesting that Jericho MD used Jericho DC’s tax
identification number until April 27, 2016).
These actions set off a firestorm of litigation over control of the church and its assets.
See Bank of America, 2016 WL 4721257, at *2 (listing at least six separate lawsuits). The question
of which entity rightfully controls Jericho Baptist Church Ministries and its assets was fully and
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finally adjudicated in George, 2015 WL 12601903. In that case, The Honorable Stuart G. Nash
conducted a three-day bench trial in D.C. Superior Court and concluded that the “calculated
decision” to exclude Joel Peebles from the vote on Resolution 1-09 rendered the resolution invalid,
which, in turn, rendered invalid all subsequent “actions of the successor Board of Trustees” that
were taken under color of Resolution 1-09. Id. ¶¶ 21, 23, 33. The court therefore held that the
newly constituted Board’s approval of the merger of Jericho DC into Jericho MD was invalid and
ordered Defendants to “refrain from exercising ownership or control over any corporate assets of
Jericho Maryland formerly belonging to, or derived from, the corporate assets of Jericho DC.” Id.
at *7. On September 22, 2016, the D.C. Court of Appeals affirmed Judge Nash’s findings and
judgment in full. See generally George, 146 A.3d 405.
B. Procedural Background
Plaintiff Jericho DC brought this action in D.C. Superior Court on March 23, 2016, and
Defendants removed the case to federal court shortly thereafter. See Notice of Removal, ECF
No. 1. Plaintiff filed its Amended Complaint on April 22, 2016. See Am. Compl., ECF No. 8
[hereinafter Am. Compl.]. The Amended Complaint includes nine counts. Counts One through
Three allege that Defendants are liable for civil violations of the Racketeer Influenced and Corrupt
Organizations (“RICO”) Act. Id. ¶¶ 70–89. Count IV alleges that Defendants engaged in common
law fraud by dishonestly creating Jericho MD and appropriating control over Jericho DC’s
governance and assets. Id. ¶¶ 90–93. Count V accuses the Individual Defendants of conversion,
id. ¶¶ 99–100; Counts VI and VII allege that Defendant Williams breached her fiduciary duties to
Jericho DC and usurped Jericho DC’s corporate opportunities, id. ¶¶ 94–98, 101–106; and Counts
VIII and IX accuse the Individual Defendants of common law trademark violations and unjust
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enrichment, id. ¶¶ 107–116. In addition, the Complaint alleges that the Individual Defendants
conspired to commit other common law torts alleged in the Complaint. Id. ¶¶ 115–16. 1
Defendants originally sought dismissal of the Amended Complaint, which the court denied
in full on December 9, 2016. See Mem. Op. & Order, ECF No. 24. As relevant here, the court
held that District of Columbia law governed Plaintiff’s common law claims, see id. 9–10, and that
Plaintiff had stated a claim as to each count, id. at 7–17. After Defendants filed an answer, the
court set a schedule for discovery to proceed in the matter. See Order, ECF No. 29.
Following a lengthy and contentious period of discovery, Defendants filed the instant
Motion for Summary Judgment on July 5, 2019. See Defs.’ Mot. for Summ. J., ECF No. 66
[hereinafter Defs.’ Mot.]. Plaintiff opposed Defendants’ Motion, see Pl.’s Opp’n to Defs.’ Mot.,
ECF No. 71, at 13 [hereinafter Pl.’s Opp’n], and briefing concluded on August 22, 2019, see Defs.’
Reply in Supp. of Defs.’ Mot., ECF No. 73.
III. STANDARD OF REVIEW
Summary judgment is appropriate “if 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). A “genuine dispute” of a “material fact” exists when the fact is “capable of affecting the
substantive outcome of the litigation” and “the evidence is such that a reasonable jury could return
a verdict for the nonmoving party.” Elzeneiny v. District of Columbia, 125 F. Supp. 3d 18, 28
(D.D.C. 2015). In assessing a motion for summary judgment, the court considers all relevant
evidence presented by the parties. Brady v. Office of Sergeant at Arms, 520 F.3d 490, 495 (D.C.
Cir. 2008). The court views the facts in the light most favorable to the nonmoving party and draws
1
Though Plaintiff’s civil conspiracy claim is labeled Count X in the Complaint, see Am. Compl. ¶¶ 115–16, Plaintiff’s
summary judgment brief confirms that the charge is not an independent count and is instead pled as a “conduit . . . to
assert one or more claims against others acting conspiratorially.” See Pl.’s Opp’n to Defs.’ Mot., ECF No. 71, at 13.
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all justifiable inferences in that party’s favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255
(1986). If the court determines “no reasonable jury could reach a verdict in [the nonmovant’s]
favor,” then summary judgment is appropriate, Wheeler v. Georgetown University Hosp., 812 F.3d
1109, 1113 (D.C. Cir. 2016); however, courts are “not to make credibility determinations or weigh
the evidence,” Holcomb v. Powell, 433 F.3d 889, 895 (D.C. Cir. 2006).
IV. DISCUSSION
A. RICO Violations – All Defendants (Counts I–III)
Plaintiff asserts that Defendants engaged in, and conspired to engage in, a pattern of mail
and wire fraud intended to unlawfully wrest control of Jericho DC’s business and finances in
violation of RICO’s civil liability provisions. See Am. Compl. ¶¶ 70–89. The RICO statute
imposes civil liability on any person who, “through a pattern of racketeering activity . . . acquire[s]
or maintain[s], directly or indirectly, any interest in or control of any enterprise,” 18 U.S.C.
§ 1962(b); “any person employed by or associated with any enterprise engaged in, or the activities
of which affect, interstate or foreign commerce,” who “conduct[s] or participate[s], directly or
indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity,”
id. § 1962(c); and any person who conspires to violate either of these provisions, id. § 1962(d).
Racketeering activity includes, among other activities, any predicate act “indictable” under various
federal criminal statutes specified in 18 U.S.C. § 1961(1), including mail fraud (18 U.S.C. § 1341)
and wire fraud (18 U.S.C. § 1343); see also Cheeks v. Fort Myer Constr. Corp., 216 F. Supp. 3d
146, 153 (D.D.C. 2016) (explaining that the term “[r]acketeering activity” is “also known as
‘predicate acts’ or ‘predicate offenses’”), aff’d, 728 F. App’x 12 (D.C. Cir. 2018).
Defendants seek summary judgment on Plaintiff’s RICO claims on three grounds. First,
Defendants argue “[i]t was the intentional acts of [Jericho DC’s] co-founder, Betty Peebles, . . .
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that caused the implementation of Resolution 1-09.” Defs.’ Mot. at 14. They argue that
Ms. Peebles’s decision was based on an “internal family dispute,” and that “Defendants’ action of
carrying out the wishes of . . . Betty Peebles does not equate to fraud, conspiracy, and/or RICO
predicates.” Id.
Regardless of whether Defendants were “carrying out” Ms. Peebles’s directions, there is
still a genuine issue of material fact as to whether Defendants engaged in, or conspired to engage
in, any predicate offense that would form the basis for Plaintiff’s RICO claims. Plaintiff alleges
that Defendants engaged in the predicate offense of wire fraud, Pl.’s Opp’n at 7–8, and there is
evidence to support that claim. See Ambellu v. Re’ese Adbarat Debre Selam Kidist Mariam, 406
F. Supp. 3d 72, 77 (D.D.C. 2019) (explaining that the “elements of . . . . wire fraud are (1) a scheme
to defraud, and (2) use of . . . wires for the purpose of executing the scheme.” (internal quotation
marks omitted)), aff’d sub nom. Ambellu v. Re’ese Adbarat Debre Selam Kidist Mariam Ethiopian
Orthodox Tewhado Religion Church, No. 19-7124, 2020 WL 873574 (D.C. Cir. Feb. 14, 2020)).
Based on Judge Nash’s findings of fact alone, which Defendants are estopped from contesting in
this action, a reasonable factfinder could determine that the Individual Defendants concocted a
scheme whose object was to steal the assets of Jericho DC through fraudulent means, including by
deceiving Meadows into resigning from the Board, purposely excluding Joel Peebles from the
March 2009 Board meeting, and failing to disclose the adoption of Resolution 1-09 to unwittingly
deposed Board members. See George, 2015 WL 1261903 ¶¶ 5–11, 21, 23, 28. Moreover, there
is evidence that Defendants used wire communications to further the object of their scheme. For
instance, Plaintiff points to a facsimile from Jericho MD’s attorney to the Internal Revenue Service
stating that Jericho DC had been merged into Jericho MD because the church’s “operation is
primarily conducted in Maryland,” and that Jericho MD would “continue to use” Jericho DC’s tax
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identification number. See Am. Compl. Exhibits, Ex. 6, Facsimile from Isaac Marks, at PDF p. 40.
These undisputed acts by Defendants suffice, at the summary judgment stage, to establish a
genuine dispute of material fact regarding the predicate offense of wire fraud.
Second, Defendants argue that they are entitled to summary judgment on Plaintiff’s RICO
claims because Plaintiff has identified “no evidence that Plaintiff’s damages were the proximate
result of Defendants’ actions.” Defs.’ Mot. at 11. However, Judge Nash’s findings of fact are
again dispositive. Judge Nash found that the Individual Defendants in this case each participated
in actions which resulted in the merger of Jericho DC into Jericho MD, thereby stripping Jericho
DC of its name, corporate identity, and various assets. See George, 2015 WL 12601903 ¶¶ 5, 9,
11, 28, & p. *7. Furthermore, there is evidence that Jericho MD acquired and used Jericho DC’s
tax identification number and bank accounts, and transferred other of Jericho DC’s assets into
various bank accounts owned by Jericho MD. See, e.g., Exhibits to Pl.’s Opp’n, Ex. 2, Aff. of
Denise Killen, ECF No. 72-3; Am. Compl. Exhibits, Ex. 6, Facsimile from Isaac Marks, PDF pp.
40–41; Defs.’ SOMF ¶¶ 103–105; Defs.’ Mot., Ex. O, ECF No. 66-1, at PDF p. 149. Thus, a jury
could conclude based on the record evidence that Plaintiff’s damages were proximately caused by
Defendants’ actions. 2
Third, Defendants argue in a single sentence that summary judgment is warranted because
Plaintiff “has provided no evidence of a pattern that would satisfy RICO requirements.” See Defs.’
Mot. at 16. Ordinarily, the court would treat this bare-bones, unsupported argument as forfeited.
See Al-Tamimi v. Adelson, 916 F.3d 1, 6 (D.C. Cir. 2019) (“Mentioning an argument ‘in the most
skeletal way, leaving the court to do counsel’s work, create the ossature for the argument, and put
flesh on its bones’ is tantamount to failing to raise it.” (quoting Schneider v. Kissinger, 412 F.3d
2
While Plaintiff may have already recovered some of these assets, there is no evidence demonstrating (and Defendants
do not contend) that Plaintiff has been made entirely whole.
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190, 200 n.1 (D.C. Cir. 2005))). Nevertheless, because proof of a pattern of racketeering activity
is critical to making out a RICO claim, see H.J. Inc. v. N.W. Bell Tel. Co., 492 U.S. 229, 239–40
(1989); W. Assocs. Ltd. P’ship, ex rel. Ave. Assocs. Ltd. P’ship v. Mkt. Square Assocs., 235 F.3d
629, 634 (D.C. Cir. 2001), the court will give Defendants an opportunity to submit additional
briefing on this issue. The court therefore defers ruling on Defendants’ motion for summary
judgment as to Counts I through III.
B. Fraud – All Defendants (Count IV)
Plaintiff asserts that Defendants are liable for fraud because they intentionally or
negligently made false representations as part of a scheme to “appropriate Plaintiff’s corporate and
legal identity including control over its finances.” Am. Compl. ¶ 91. Under District of Columbia
law, to make out a claim of fraud, “a plaintiff must . . . show that a person or entity (1) made a
false representation of or willfully omitted a material fact; (2) had knowledge of the
misrepresentation or willful omission; (3) intended to induce another to rely on the
misrepresentation or willful omission; (4) the other person acted in reliance on that
misrepresentation or willful omission; and (5) suffered damages as a result of that reliance.”
Sundberg v. TTR Realty, LLC, 109 A.3d 1123, 1130–31 (D.C. 2015) (cleaned up) (quoting Schiff
v. Am. Ass’n of Retired Persons, 697 A.2d 1193, 1198 (D.C. 1997)). “A false representation may
be either ‘an affirmative misrepresentation or a failure to disclose a material fact when a duty to
disclose that fact has arisen.’” Id. at 1131 (quoting Saucier v. Countrywide Home Loans, 64 A.3d
428, 438 (D.C. 2013)).
Defendants seek summary judgment on Plaintiff’s fraud claim on two main grounds. First,
Defendants argue that, like the RICO claims, Plaintiff’s claim for fraud “must fail because it has
not presented any evidence of provable damages and/or injury.” Defs.’ Mot. at 16. The court
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rejects this argument for the same reasons previously discussed. 3
Second, Defendants contend that Plaintiff has offered no evidence that Defendants engaged
in any fraudulent activity because the “undisputed facts establish that it was the co-founder of
Jericho Baptist Church [Betty Peebles] who implemented Resolution 1-09 . . . in an attempt to
protect the church.” Defs.’ Mot. at 16. However, the evidence shows that the Individual
Defendants, not just Betty Peebles, each had a hand in effectuating the takeover of Jericho DC;
whether they were acting at Betty Peebles’s behest is beside the point. See George, 2015 WL
12601903 ¶ 11; see also Am. Compl. Exhibits, Ex. 5, Articles of Incorporation of Jericho MD, at
PDF p. 36–37; id., Ex. 3, Articles of Merger, at PDF p. 26. Likewise, Ms. Peebles’s ostensible
good-faith intention to “protect the church,” Defs.’ Mot. at 16, does not mean that Defendants’
actions were not fraudulent. Joel Peebles was “deliberately excluded and deprived of notice” of
the meeting in which he was stripped of his board membership, George, 2015 WL 12601903 ¶ 23,
and another former board member, William Meadows, was asked by Defendant Killen to sign
Resolution 1-09 despite having “no idea that by signing the document he was resigning from the
Board and voting to elect a new slate of trustees,” id. ¶ 28. Over the next 18 months, none of the
new Board members (including Defendants Denise Killen, Gloria McClam-Magruder, Clarence
Jackson, and Dorothy Williams) made any effort to disabuse Peebles or Meadows of their
misimpression that they were still trustees, even after Joel Peebles convened a meeting of “what
he believed to be the Board,” which Defendant Williams attended. Id. ¶ 9. As purported trustees
of the reconstituted Jericho DC, these Individual Defendants had a fiduciary obligation to disclose
3
Defendants argue that “Plaintiff’s own expert stated that she can identify no fraudulent transactions in her report,”
see Defs.’ Mot. at 17, but that report was focused only on transactions with a single bank. See Plaintiff’s Initial
Disclosures, ECF No. 37, Ex. 1, Preliminary Report Accounting of Select Bank Accounts Held by Jericho Baptist
Church Ministries, ECF No. 37-1 (“[T]his report only covers activity that has been reviewed to date in four Bank of
America, N.A. accounts.”). As discussed, there is other evidence that Plaintiff has been injured by Defendants’
fraudulent activities, even without resort to Plaintiff’s expert report.
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such material information. See Pyne v. Jamaica Nutrition Holdings Ltd., 497 A.2d 118, 132 (D.C.
1985) (holding that a corporate officer’s “failure to disclose [material facts] to the company
constituted fraud and a breach of his fiduciary duty to the company”). A jury could find, based on
this evidence, that Defendants Denise Killen, Gloria McClam-Magruder, Clarence Jackson, and
Dorothy Williams knowingly and intentionally made false representations to Jericho DC, or
omitted material facts that they had duty disclose, and that Plaintiff relied on those representations
to its detriment. 4
The court finds otherwise with respect to Defendants Boswell and Jericho MD, however.
Defendant Boswell was not a trustee of Jericho DC, and therefore had no duty to disclose material
information to Jericho DC. Nor is there any evidence that he affirmatively made any false
representations to Jericho DC. Likewise, there is no evidence that Jericho MD or its agents acting
on its behalf made any false representations to Jericho DC. While Plaintiff argues that Jericho MD
made false statements to third parties, see Pl.’s Opp’n at 8, there is no indication that these
statements were ever communicated to Jericho DC, or that Jericho DC acted in reliance on them.
See Pyles v. HSBC Bank USA, N.A., 172 A.3d 903, 907 (D.C. 2017) (stating that to prove fraud,
“a plaintiff must show that the defendant, with the intent to deceive the plaintiff, knowingly made
a false representation of a material fact on which plaintiff justifiably and detrimentally relied”
(emphasis added)); see also Exxon Mobil Corp. v. Albright, 433 Md. 303, 334–36 (2013)
(explaining that “[o]rdinarily, a plaintiff seeking recovery for fraud must prove that the defendant
. . . made a false representation to the person defrauded” and that, though there are circumstances
4
Defendants argue that summary judgment is warranted as to Defendant Gloria McClam-Magruder because “nowhere
in the Amended Complaint . . . has Jericho DC alleged any fraud that was committed” by Ms. McClam-Magruder.
See Defs.’ Mot. at 18. Defendant McClam-Magruder, however, was a purported Board member of Jericho DC just
like the other Individual Defendants, and therefore had the same duty of loyalty as the other Board members. See
George, 2015 WL 12601903 ¶ 11.
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in which a plaintiff may recover for fraudulent statements made to a third party, recovery is not
permitted “without a demonstration that the plaintiff relied, either directly or indirectly, on the
relevant misrepresentation” (internal quotations omitted)), recons. granted in part on other
grounds, 433 Md. 502 (2013). Therefore, the court denies Defendants’ motion as to Defendants
Killen, McClam-Magruder, Jackson, and Williams, and grants their motion as to Defendants
Boswell 5 and Jericho MD.
C. Conversion – Individual Defendants (Count V)
Plaintiff asserts that the Individual Defendants are liable for conversion because the
Defendants “took control and possession of Plaintiff’s church office building, schools, parking
lots, furniture, books, papers and programs,” as well as Plaintiff’s “bank accounts, check accounts,
and credit card accounts,” “in a manner that was inconsistent with Plaintiff’s ownership rights,”
and have “continue[d] to expend unauthorized church funds.” Am. Compl. ¶ 100. The tort of
conversion entails “an unlawful exercise of ownership, dominion, and control over the personalty
of another in denial or repudiation of his right to such property.” Baltimore v. District of Columbia,
10 A.3d 1141, 1155 (D.C. 2011).
Defendants seek summary judgment on Plaintiff’s conversion claim because, they argue,
Plaintiff’s allegations that the Individual Defendants improperly used Jericho DC’s funds are
“wholly lacking in any factual support.” Defs.’ Mot. at 19. The court disagrees. Though Plaintiff
has not substantiated any of its allegations that the Individual Defendants wrongfully
misappropriated Jericho DC’s assets for their personal benefit, see Am. Compl. ¶¶ 45–51, there is
record evidence that shows that the Individual Defendants enabled Jericho MD to obtain control
5
Plaintiff has also alleged that Defendant Boswell, along with the other Individual Defendants, is liable for conspiring
to fraudulently take over Plaintiff’s corporate identity and assets. See Am. Compl. ¶ 116. The court’s ruling that
Boswell is not personally liable for defrauding Plaintiff does not foreclose any vicarious liability he may have for
conspiring with others to defraud Plaintiff. Plaintiff’s conspiracy claim is discussed in greater detail below.
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over much, if not all, of Jericho DC’s property, including its name, bank accounts, real property,
and tax identification number. A jury could conclude, based on these facts, that the Individual
Defendants’ acts of aiding Jericho MD in obtaining control over Jericho DC’s assets was an
unlawful conversion. 6 See Sabre Int’l Sec. v. Torres Advanced Enter. Sols., LLC, 72 F. Supp. 3d
121, 126 (D.D.C. 2014) (observing that, under District of Columbia law, a corporate officer may
be held personally liable for corporation’s acts of conversion if the officer “act[ed] with
knowledge” that property belonged to another and “meaningfully participated” in the corporation’s
decision not to return it (internal quotation marks omitted)); 18 Am. Jur. 2d § 62 (“Any officer or
director who aids, instigates, or assists in the conversion by a corporation becomes personally
liable.”); see also Restatement (Second) of Torts 222A, Illustrations 10, 23 (1965) (listing
circumstances in which a party may be liable for conversion even though he does not personally
possess the property); cf. id. § 233 (“[O]ne who as agent or servant of a third person disposes of a
chattel to one not entitled to its immediate possession in consummation of a transaction negotiated
by the agent or servant, is subject to liability for a conversion to another who, as against his
principal or master, is entitled to the immediate possession of the chattel.”). Defendants’ motion
is therefore denied as to Count V.
D. Breach of Fiduciary Duty – Defendant Williams (Count VI)
Under District of Columbia law, a defendant may be held liable for breach of fiduciary
duty when: “(1) the defendant owed the plaintiff a fiduciary duty; (2) the defendant breached that
duty; and (3) the breach proximately caused an injury.” Hedgeye Risk Mgmt., LLC v. Heldman,
6
Individual Defendants Williams, McClam-Magruder, and Boswell separately seek summary judgment, arguing that
“there are no allegations that [these Defendants] took or received any funds from Plaintiff.” Defs.’ Mot. at 19. The
court rejects the argument insofar as there is evidence from which a jury could conclude that all the Individual
Defendants, including Boswell, Williams, and McClam-Magruder, assisted Jericho MD with converting Plaintiff’s
assets.
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412 F. Supp. 3d 15, 23 (D.D.C. 2019). Plaintiff alleges that Individual Defendant Williams owed
Jericho DC such a fiduciary duty and breached that duty by “tak[ing] steps to harm and to destroy
Plaintiff’s enterprise.” Am. Compl. ¶ 104.
Defendant Williams seeks summary judgment on this claim, contending that “Plaintiff has
offered no evidence that the adoption of Resolution 1-09 . . . was a breach of Mrs. Williams’[s]
fiduciary duty,” and that “Plaintiff has failed to produce any evidence that it suffered any injuries
as a result of the alleged breach.” Defs.’ Mot. at 21. Neither argument has any merit. The evidence
shows that Williams was a board member of Jericho DC, see George, 2015 WL 12601903 ¶ 5;
that she signed Resolution 1-09, id.; see also Resolution 1-09; that she attended a meeting that Joel
Peebles convened under the misimpression that he was still a member of the board, but “made no
mention of Resolution 1-09, or the existence of the newly-constituted Board of Trustees,” George,
2015 WL 12601903 ¶ 9; and that she participated in incorporating Jericho MD and merging Jericho
DC into the newly formed Maryland corporation, id. ¶ 11; see also Am. Compl. Exhibits, Ex. 3,
Articles of Merger, at PDF p. 26; id. Ex. 5, Articles of Incorporation of Jericho MD, at PDF p. 37.
A jury could conclude from this evidence that, by dishonestly effectuating the merger of Jericho
DC into Jericho MD, Defendant Williams breached her fiduciary duties to Jericho DC, thereby
causing Plaintiff’s injuries.
Accordingly, Defendants’ motion is denied as to Count VI.
E. Usurpation of Corporate Opportunity – Defendant Williams (Count VII)
In Count VII, Plaintiff asserts that Defendant Williams usurped Jericho DC’s corporate
opportunities by “join[ing] forces with adverse interests to Jericho DC,” “attempt[ing] to create a
newly elected Board of Trustees,” and “facilitat[ing] Defendants’ acquisition of Plaintiff’s
opportunities.” Am. Compl. ¶ 96–97. Plaintiff’s brief adds that Williams “knowingly participated
15
in the diversion of Jericho’s then existing opportunities to herself and her fellow board members,
effective March 15, 2009 with great benefits deriving therefrom.” Pl.’s Opp’n at 11.
The “usurpation of corporate opportunity” tort precludes corporate officers, directors and
upper-level management employees “from diverting unto themselves opportunities which in
fairness ought to belong to the corporation.” Yah Kai World Wide Enterps., Inc. v. Napper, No.
11-2174, 2016 WL 3647840, at *23 (D.D.C. July 3, 2016) (quoting Maryland Metals, Inc. v.
Metzner, 382 A.2d 564, 572 & n.5 (Md. 1978)). The tort is not well developed in the District of
Columbia, see Havilah Real Property Servs., LLC v. VLK, LLC, 108 A.3d 334, 339 n.6 (D.C. 2015)
(recognizing the doctrine in a footnote); however, Defendants do not contest the availability of the
tort in general, so the court will assume for present purposes that such a tort exists under District
of Columbia law.
Defendant Williams seeks summary judgment on Plaintiff’s usurpation claim because, she
argues, “Plaintiff has not proven that Mrs. Williams usurp[ed] Jericho DC.” Defs.’ Mot. at 23.
While the court agrees that Plaintiff has not substantiated its allegations that Williams diverted
Jericho DC’s corporate opportunities for her own personal gain, Williams did facilitate Jericho
MD’s takeover of Jericho DC, and there is evidence that Jericho MD diverted Jericho DC’s
opportunities. See e.g., Exhibits to Defs.’ Mot., Ex. P, Mem. Op., at PDF p. 158 (noting that “a
sizable portion of the income deposited into [Jericho MD’s] Citibank account came from parking
fee revenues, the origin of which was not the result of Jericho MD’s independent efforts, but
derived from a pre-existing venture of Jericho DC’s”). A jury could therefore find Williams liable
for exploiting her position as an officer of Jericho DC to facilitate Jericho MD’s usurpation of
Jericho DC’s opportunities. 7 See Lawlor v. District of Columbia., 758 A.2d 964, 977 (D.C. 2000)
7
Defendants’ argument that the “failure of Mrs. Williams to disclose [to Joel Peebles and William Meadows] that
Apostle Betty Peebles had elected a new Board . . . is not a breach of duty” because “those other board members had
16
(holding that an officer who has “meaningful[ly] participat[ed]” in a corporation’s wrongful acts
may be held personally liable). The court therefore denies Defendants’ motion as to Count VII.
F. Common Law Trademark Infringement / Unfair Competition – Individual
Defendants (Count VIII)
In Count XIII, Plaintiff claims that the Individual Defendants’ use of the marks “Jericho
Baptist Church Ministries” and “Jericho City of Praise” infringed on Plaintiff’s common law
trademarks, “creat[ing] substantial confusion” to Plaintiff’s churchgoers and others. See Am.
Compl. ¶¶ 109–10. In the District of Columbia, the torts of unfair competition and common law
trademark infringement are analyzed under the same standard as the Lanham Act. See Ward One
Democrats, Inc. v. Woodland, 898 A.2d 356, 361 (D.C. 2006). Therefore, to prevail on such a
claim, a plaintiff must prove “(1) that it owns a valid trademark, (2) that its trademark is distinctive
or has acquired a secondary meaning, and (3) that there is a substantial likelihood of confusion
between the plaintiff's mark and the alleged infringer’s mark.” AARP v. Sycle, 991 F. Supp. 2d
224, 229 (D.D.C. 2013) (quoting Globalaw Ltd. v. Carmon & Carmon Law Office, 452 F. Supp.
2d 1, 26–27 (D.D.C. 2006)).
Defendants argue that Plaintiff’s claim founders because, among other flaws, Plaintiff has
offered no evidence its alleged trademarks are distinctive or have acquired a secondary meaning.
See Defs.’ Opp’n at 25. Plaintiff offers no response to this argument, focusing only on the injuries
it has experienced as a result of the alleged violation. See Pl.’s Opp’n at 11–12. That is plainly
insufficient. To overcome a motion for summary judgment, a plaintiff cannot sit on its hands, but
must “support the assertion” that a fact is genuinely disputed by “citing to particular parts of
resigned from the Board at the March 15, 2009 meeting,” Defs.’ Mot. at 23, is irrelevant to the question whether
Defendant Williams usurped Jericho DC’s opportunities. In any event, the argument is fundamentally off base. Joel
Peebles and Meadows did not voluntarily resign; they were deliberately deprived of their Board positions by the
seemingly deceitful actions of Williams and others.
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materials in the record” or “showing that the materials cited do not establish the absence . . . of a
genuine dispute.” See Fed. R. Civ. P. 56(c)(1). Because Plaintiff fails to provide any evidence or
argument that the seemingly common names “Jericho Baptist Church Ministries” and “Jericho
City of Praise” are in fact distinctive or have acquired a secondary meaning, the court grants
Defendants’ motion for summary judgment as to this count. See Ward One Democrats, 898 A.2d
at 364 (holding that “direct or circumstantial evidence,” such as “scientific surveys or polls of
consumers,” is required to prove that an indistinct mark has acquired a secondary meaning).
G. Unjust Enrichment—All Individual Defendants (Count IX)
In its final substantive claim, Plaintiff alleges that the Individual Defendants have unjustly
enriched themselves by “misappropriat[ing] certain of Plaintiff’s finances,” and “us[ing] said
funds to pay for various [personal] expenses,” that are “in no way related to the Plaintiff’s
interests.” Am. Compl. ¶¶ 111–12. The elements of an unjust enrichment claim are: “(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.” News World Commc’ns, Inc.
v. Thompsen, 878 A.2d 1218, 1222 (D.C. 2005).
Defendants seek summary judgment on the ground that Plaintiff has provided no evidence
that Jericho DC “conferred a benefit on the defendants; that the defendants retain the benefit; [or]
that under the circumstances, the defendants’ retention of the benefit is unjust.” Defs.’ Mot. at 26.
The court agrees that Plaintiff has provided no evidence that any of the Individual Defendants have
personally received and retained benefits from Plaintiff. Plaintiff argues that “at least two
Individual Defendants personally enriched themselves at Jericho DC’s expense,” and that
“Defendants were unjustly enriched by excessive salaries and payment of personal credit cards
one of which was used to shop at Victoria Secrets [sic],” see Pl.’s Opp’n at 13, but its only
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supporting evidence is a conclusory and unsupported answer to one of Defendants’ interrogatories,
see Exhibits to Pl.’s Opp’n, Ex. 3, Pl.’s Answers to Defs.’ Interrogatories, ECF No. 72-4, at 8
(contending, without any support, that “certain defendants expended monies for personal reasons
and were paid salaries that were excessive in nature”). Such “conclusory allegations,” wholly
lacking in “specific facts or support from the record,” are “insufficient to create a genuine factual
issue.” Camara v. Mastro’s Restaurants LLC, No. 18-7167, 2020 WL 1263998, at *2 (D.C. Cir.
Mar. 17, 2020). Therefore the court grants Defendants’ motion as to Count IX.
H. Civil Conspiracy – Individual Defendants
Finally, the court turns to Plaintiff’s allegations of civil conspiracy. Plaintiff argues that
the Individual Defendants are liable for civil conspiracy because they “collaborated and agreed to
convert Plaintiff’s legal and business identities, properties and trademark, and to fraudulently
acquire control over Plaintiff’s financial affairs and bank funds.” Am. Compl. ¶ 116. Civil
conspiracy is not a standalone tort in the District of Columbia. See Grimes v. D.C., Bus. Decisions
Info. Inc., 89 A.3d 107, 115 (D.C. 2014). Rather, it is a means of establishing vicarious liability
for an underlying tort. Id. The elements of civil conspiracy are: “(1) an agreement between two
or more persons[,] (2) to participate in an unlawful act, and (3) an injury caused by an unlawful
overt act performed by one of the parties to the agreement pursuant to, and in furtherance of, the
common scheme.” Saucier v. Countrywide Home Loans, 64 A.3d 428, 446 (D.C. 2013) (quoting
Paul v. Howard Univ., 754 A.2d 297, 310 (D.C. 2000)).
Defendants assert they are entitled to summary judgment on Plaintiff’s civil conspiracy
claim because: (1) the evidence shows that Betty Peebles implemented Resolution 1-09, and
Plaintiff has offered no evidence to support its allegations that the Individual Defendants are liable
for conspiracy; (2) Plaintiff has failed to name a necessary party, Betty Peebles, as a defendant to
19
this action; and (3) the claim was improperly pleaded as an independent cause of action. 8 Defs.’
Mot. at 27–28.
Defendants’ first argument is plainly unavailing. Whether or not Betty Peebles initiated
Resolution 1-09, there is record evidence on which a jury could conclude that the takeover of
Jericho DC and its assets was unlawful, and that the Individual Defendants agreed—at least
tacitly—to participate in the takeover. See 16 Am. Jur. 2d Conspiracy § 10 (2020) (“An agreement
. . . need not be formal or express but may be a tacit understanding; the agreement may be inherent
in and inferred from the circumstances especially declarations, acts, and conduct of the alleged
conspirators.” (footnotes omitted)). Defendants’ second argument fairs no better. Betty Peebles
is deceased and therefore cannot be personally joined as a defendant to this action Nor have
Defendants identified any reasons why Ms. Peebles’s estate is a necessary party. See Fed. R. Civ.
P. 19.
Finally, Plaintiff’s conspiracy claim is not freestanding. Rather, it asserts that the
Individual Defendants are liable for conspiring to commit other common law torts—namely, fraud
and conversion—alleged in the Complaint. See Am. Compl. ¶ 116; see also Pl.’s Opp’n at 13.
Therefore, Plaintiff’s conspiracy claim may proceed insofar as there are genuine issues of material
facts that could support those underlying torts. Cf. Elliott v. Healthcare Corp., 629 A.2d 6, 10
(D.C. 1993) (upholding the grant of summary judgment as to a civil conspiracy claim where the
record was “devoid of any evidence to establish vicarious liability for any underlying tort”).
The court defers ruling on Defendants’ motion, however, as neither party has provided any
briefing on whether the intracorporate conspiracy doctrine—which dictates that employees acting
within the scope of their employment cannot conspire among themselves or with their employer—
8
Defendants also argue in passing that Plaintiff’s civil conspiracy claim is “preempted by Count III.” Defs.’ Mot. at
27. This argument is forfeited as it is wholly undeveloped. See Al-Tamimi, 916 F.3d at 6.
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has been adopted by the District of Columbia courts, and if so, whether it bars Plaintiff’s claims
of conspiracy. See Blakeney v. O’Donnell, 117 F. Supp. 3d 6, 15 (D.D.C. 2015) (discussing the
doctrine). The court will therefore allow Defendants an opportunity to submit supplemental
briefing that addresses this issue.
V. CONCLUSION AND ORDER
For the foregoing reasons, the court denies in part and grants in part Defendants’ Motion
for Summary Judgment, ECF No. 66, as follows:
1. As to Counts I through III (RICO and RICO conspiracy), the court defers ruling on
Defendants’ motion, subject to additional briefing on whether Plaintiff has established
a “pattern of racketeering activity.”
2. As to Count IV (fraud), Defendants’ motion is granted as to Defendant Boswell and
Jericho MD, and denied as to the remaining Individual Defendants.
3. As to Count V (conversion), Defendants’ motion is denied.
4. As to Count VI (breach of fiduciary duty), Defendants’ motion is denied.
5. As to Count VII (usurpation of corporate opportunity), Defendants’ motion is denied.
6. As to Count VIII (trademark infringement), Defendants’ motion is granted.
7. As to Count IX (unjust enrichment), Defendants’ motion is granted.
8. As to Plaintiff’s civil conspiracy claims, the court defers ruling on Defendants’ motion
subject to additional briefing on the intracorporate conspiracy doctrine.
The court will issue a separate Order detailing the issues that require additional
development and setting a schedule for that briefing. In addition, because Plaintiff’s expert’s
report was not needed to resolve Defendants’ Motion for Summary Judgment, the court denies
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