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FARMER v. MOUNT VERNON REALTY

September 18, 1989

JAMES FARMER, Plaintiff,
v.
MOUNT VERNON REALTY, INC., et al., Defendants; THOMAS H. FOX, et al., Plaintiffs, v. BEGG, INC., et al., Defendant; EDWIN I. PESKOWITZ, Plaintiff, v. MOUNT VERNON REALTY, INC., et al., Defendants; NADINE L. ROBINSON, et al., Plaintiffs, v. MOUNT VERNON REALTY, INC., et al., Defendants; HENRY C. WILLIAMS, Plaintiff, v. MOUNT VERNON REALTY, INC., et al., Defendants


George H. Revercomb, United States District Judge.


The opinion of the court was delivered by: REVERCOMB

GEORGE H. REVERCOMB, UNITED STATES DISTRICT JUDGE.

 These related cases each involve claims that the defendants, various real estate professionals and lawyers, defrauded, were negligent, or breached their fiduciary duties with regard to the plaintiffs in the sale of the plaintiffs' properties. Another of the related cases has already been tried and is on appeal. See Ago v. Begg, Inc., 705 F. Supp. 613 (D.D.C. 1988) (memorandum on post-trial motions). In the time since judgment was entered in the Ago case, the Court has heard argument on a number of motions, many with nearly identical issues, in these cases. In this memorandum, the Court rules on many of the motions. First, the Court denies the motions for summary judgment based on the statute of limitations in Williams, Farmer, Robinson, and Peskowitz, but grants the motion in Fox. Second, the Court grants the motion to dismiss the conspiracy to defraud claims. Third, the Court grants the motion to dismiss the third-party complaint in Williams. Fourth, the Court grants the motion of Cooter, Gell, & Cahill for summary judgment in Robinson. Fifth, the Court reserves its rulings on the motions regarding the RICO, fraud, and punitive damage claims, pending the appeal in Ago. Finally, the Court denies the motions for sanctions and costs.

 I. The Statute of Limitations Motions

 In Williams, Farmer, Robinson, and Peskowitz, the defendants contend that the plaintiffs' claims are barred by the statute of limitations because their causes of action accrued more than three years before the complaints were filed. See D.C. Code Ann. § 12-301 (three-year statute of limitations for fraud, breach of fiduciary duty, and other claims).

 The Court disagrees that the claims are barred in these cases, noting that in the District of Columbia a cause of action does not accrue until the time when both (1) the plaintiff at least "should have known" of the defendants' actions and the (2) the plaintiff has suffered actual injury. See Wilson v. Johns-Manville Sales Corp., 221 U.S. App. D.C. 337, 684 F.2d 111, 119 (1982) (cause of action does not accrue until health injury actually becomes manifest or is "reasonably certain," despite the fact that the plaintiff knew of the negligence of the defendant before the injury became manifest). In the cases at bar, the alleged injury was speculative and did not become concrete and until the properties were foreclosed. Accordingly, the Court DENIES the defendants' motions for summary judgment based on the statute of limitations in Williams, Farmer, Robinson, and Peskowitz.

 In Fox, however, the property was foreclosed more than three years before the suit was filed. The plaintiff argues that because the plaintiffs in Fox repurchased their house at foreclosure and later re-sold it, their cause of action did not accrue until the plaintiffs re-sold the property. Under such a theory, the plaintiffs could have delayed the accrual of their cause of action indefinitely by not selling their house. Although the question concerning what the plaintiffs do after foreclosure may have some relevance to whether the plaintiffs properly mitigated their damages, the Court believes that the plaintiff's claim accrued no later than the foreclosure date. Accordingly, the Court GRANTS the defendants' motion for summary judgment on all the common law claims in Fox based on the statute of limitations.

 II. Motion to Dismiss the Claims of Conspiracy to Defraud

 III. Ruttenberg, Slocum & Phelps' Motion to Dismiss Third-Party Complaint

 In Williams, defendant Ruttenberg, Phelps, Slocum, Boddie, Moffitt and Hughes ("Ruttenberg") has moved to dismiss the third party complaint against it by certain defendants. Ruttenberg, which was a co-defendant, has settled its case with the plaintiff; a settling co-defendant may not be liable for contribution to the other defendants. Martello v. Hawley, 112 U.S. App. D.C. 129, 300 F.2d 721, 724 (D.C. Cir. 1962).

 The defendants/third-party plaintiffs, however, note correctly that the issue whether liability is established against Ruttenberg may determine how much the other defendants would have to pay the plaintiffs if they also were found to be liable. See Snowden v. D.C. Transit System, Inc., 147 U.S. App. D.C. 204, 454 F.2d 1047 (D.C.Cir. 1971). The Court concludes that the question whether liability is established against Ruttenberg may be decided by the Court without the necessity of bringing Ruttenberg, a settling party, back into the case. To permit nonsettling defendants to bring settling defendants back into the case would seriously undermine the incentive of parties to settle their claims. Accordingly, the Court GRANTS Ruttenberg's motion to dismiss the third-party complaint.

 IV. Cooter, Gell & Cahill's Motion for Summary Judgment

 In Robinson, defendant Cooter, Gell & Cahill ("Cooter") -- a law firm -- moves for summary judgment in favor of them on the claim of professional negligence for failing to pursue some of the Robinsons' potential legal remedies. The question is whether there was an ...


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