The opinion of the court was delivered by: Reggie B. Walton, District Judge
Defendants' Motion to Dismiss ("Defs.' Mot.") at 1-26.*fn2 Upon
consideration of the parties' submissions and for the reasons set forth
below, the Court will grant the defendants' motion to dismiss this case
because the statute of limitations had expired as to each of the
plaintiff's claims when she filed her complaint.*fn3
The events giving rise to the complaint being filed began on February
26, 1992, when the plaintiff opened up an investment account with Dean
Witter Reynolds, Inc. ("Dean Witter"). Complaint ("Compl.") ¶ 10. The
plaintiff asserts that over the next several months "Dean Witter destroyed
a $750,000 stock and bond portfolio in 1992 consisting of [p]laintiff'[s]
30-year professional earnings, life savings, sole income and only source
of income." Id. Distraught over this event, the plaintiff initiated an
arbitration proceeding on October 24, 1994 with the NASD, asserting that
Dean Witter, and its brokers that she dealt with, committed several
violations of the Securities Exchange Act of 1934. Id. On January 7,
1998, a panel of NASD arbitrators dismissed the plaintiff's complaint
with prejudice and the plaintiff was apparently required to pay a fee of
$1,900.00. Compl. ¶ 39. The plaintiff then attempted to vacate this award
in the Circuit Court of the Seventeenth Judicial Circuit for Broward
County, Florida. Defendants' Memorandum of Points and Authorities in
Support of their Motion to Dismiss the Complaint ("Defs.' Mem.") at 1.
After remanding the case for clarification of the award, the arbitral
panel affirmed the dismissal on February 24, 1999. Compl. ¶ 40; Defs.'
Mem. at 1. The plaintiff subsequently initiated the instant cause of
action on September 26, 2001.
II. Standard of Review Under Rule 12(b)(6)
On a motion to dismiss for failure to state a claim upon which relief
can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6), this
Court must construe the allegations and facts in the complaint in the
light most favorable to the plaintiff and must grant the plaintiff the
benefit of all inferences that can be derived from the alleged facts.
Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Kowal v. MCI Communications
Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994). However, the Court need not
accept inferences or conclusory allegations that are unsupported by the
facts set forth in the complaint. Kowal, 16 F.3d at 1276. In deciding
whether to dismiss a claim under Rule 12(b)(6), the Court can only
consider the facts alleged in the
complaint, documents attached as
exhibits or incorporated by reference in the complaint, and matters about
which the Court may take judicial notice. E.E.O.C. v. St. Francis Xavier
Parochial Sch., 117 F.3d 621, 624-25 (D.C. Cir. 1997). The Court will
dismiss a claim pursuant to Rule 12(b)(6) only if the defendant can
demonstrate "beyond doubt that the plaintiff can prove no set of facts in
support of his claim which would entitle him to relief." Conley, 355
U.S. at 45-46.
(A) Are the Plaintiff's Claims Time-Barred by the Statute of
The Court must first address the defendants' assertion that the
plaintiff's claims are all time-barred by the applicable statute of
limitations. At the outset, and because this matter is before the Court
based on diversity jurisdiction pursuant to 28 U.S.C. § 1332 (2000),
this Court must address the applicable choice-of-law principles that
govern which state's limitations period applies to this case. The
District of Columbia Circuit, in Ideal Elec. Sec. Co. v. Int'l Fid. Ins.
Co., 129 F.3d 143 (D.C. Cir. 1997), stated that "[w]hen deciding
state-law claims under diversity or supplemental jurisdiction, federal
courts apply the choice-of-law rules of the jurisdiction in which they
sit." Id. at 148 (citing Lee v. Flintkote Co., 593 F.2d 1275, 1278-79 n.
14 (D.C. Cir. 1979)); see Shenandoah Assocs. Ltd. P'ship v. Tirana,
182 F. Supp.2d 14, 18 (D.D.C. 2001) (in a diversity action a court "is
obligated under Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938), to apply
the choice of law rules prevailing in [the forum] jurisdiction.")). In
A.I. Trade Fin., Inc. v. Petra Int'l Banking Corp., 62 F.3d 1454 (D.C.
Cir. 1995), the Circuit Court commented that "[l]ooking to the D.C.
choice-of-law rules, we see that they treat statutes of limitations as
procedural, and therefore almost always mandate application of the
District's own statute of limitations." Id. at 1458 (citations omitted).
Furthermore, in Steorts v. Am. Airlines, 647 F.2d 194 (D.C. Cir. 1981),
the Circuit Court noted that "Erie clearly mandates that in diversity
cases the substantive law of the forum controls with respect to those
issues which are outcome-determinative, and it is beyond cavil that
statute of limitations are of that character." Id. at 196-97 (citations
omitted) (emphasis added). Therefore, this Court will apply the District
of Columbia's statute of limitations period applicable to the types of
claims being pursued by the plaintiff.*fn4
The parties do not dispute that each of the plaintiff's claims is
governed by a three-year District of Columbia statute of limitations.
This is because her claims are not one of the enumerated causes of action
specified in D.C. Code § 12-301 (2001). Section 12-301(8) of the
District of Columbia Code provides for a three-year statute of
limitations period for those claims "which a limitation is not otherwise
specifically prescribed . . ." D.C. Code § 12-301(8). Therefore,
because the plaintiff filed her complaint with this Court on September,
26, 2001, each of her claims will be time-barred unless they accrued on
or after September 26, 1998. Because this Court finds that each of the
plaintiff's claims accrued during the arbitration process, which ended on
January 7, 1998, the three-year statute of limitations had
already expired when she filed her complaint with this Court.
(1) When did the Plaintiff's Claims Accrue?
District of Columbia law provides that "[g]enerally, a cause of action
is said to accrue at the time injury occurs . . . However, in cases where
the relationship between the fact of injury and the alleged tortious
conduct is obscure when the injury occurs, [the District of Columbia
courts] apply a `discovery rule' to determine when the statute of
limitations commences." Morton v. Nat'l Med. Enters., Inc., 725 A.2d 462,
468 (D.C. 1999) (citations omitted). Thus, "a cause of action will accrue
once a plaintiff has knowledge of `some injury,' its cause in fact, and
`some evidence of wrongdoing.'" Id. (citing Colbert v. Georgetown Univ.,
641 A.2d 469, 473 (D.C. 1994) (en banc)). The District of Columbia Court
of Appeals has explained that
a right of action may accrue before the plaintiff
becomes aware of all of the relevant facts. It is not
necessary that all or even the greater part of the
damages . . . occur before the [right] of action
arises. Any appreciable and actual harm flowing from
the [defendant's] conduct is sufficient. The law of
limitations requires only ...