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Klayman v. Judicial Watch

June 25, 2009

LARRY KLAYMAN, PLAINTIFF,
v.
JUDICIAL WATCH, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Colleen Kollar-kotelly United States District Judge

MEMORANDUM OPINION

Plaintiff Larry Klayman brought this action against Defendants-Judicial Watch, Inc. (hereinafter "JW" or the "organization"), a non-profit public interest government watchdog organization; Thomas J. Fitton, President of JW; Paul J. Orfanedes, Secretary and a Director of JW; and Christopher J. Farrell, a Director of JW ("Individual Defendants," together with JW, "Defendants")-alleging a variety of claims, including, inter alia, breach of contract, violation of the Lanham Act, 15 U.S.C. § 1125(a)(1)(A) and (B), and defamation. Presently before the Court are a number of motions, including: (1) Klayman's motion for partial summary judgment as to Count Six of his Second Amended Complaint; (2) JW's motion for partial summary judgment as to Counts Four, Six, Seven, Eight, and Nine of the Second Amended Complaint; (3) Fitton's motion for partial summary judgment as to Counts Four, Six, and Nine of the Second Amended Complaint; (4) Orfanedes' motion for partial summary judgment as to Counts Four, Six, and Nine of the Second Amended Complaint; (5) Farrell's motion for partial summary judgment as to Counts Four, Six, and Nine of the Second Amended Complaint; and (6) JW's motion for partial summary judgment as to Counts One, Two, Three and Ten of its Amended Counterclaim.

Upon a searching consideration of the filings currently before the Court on these motions, the attached exhibits, and the relevant statutes and case law, with respect to Klayman's Second Amended Complaint, the Court shall: (1) grant Defendants' motions for summary judgment as to Count Four; (2) deny Klayman's partial motion for summary judgment as to Count Six and shall grant Defendants' cross-motions for partial summary judgment as to Count Six; (3) deny-in-part and grant-in-part JW's motion for partial summary judgment as to Counts Seven and Eight; and (4) grant Defendants' motions for partial summary judgment as to Count Nine. With respect to the Amended Counterclaim, the Court shall: (1) grant JW's motion for partial summary judgment as to Count One as to liability, but hold in abeyance as to damages; and (2) deny JW's motion for partial summary judgment as to Counts Two, Three and Four.

In light of the Court's decision herein, the following claims and counterclaims remain at issue. First, as to Klayman's Second Amended Complaint, the following allegations of breach of contract asserted in Counts Seven and Eight remain viable as to JW: (1) JW's alleged failure to make a good faith effort to remove Klayman as guarantor of the building's lease; (2) JW's failure to pay health insurance for Klayman's children; (3) JW's filing a motion to strike Klayman's appearance in Florida litigation; (4) JW's failure to provide Klayman with access to documents regarding Mr. Paul; and (5) JW's alleged disparagement of Klayman and misrepresentations of the reasons for his departure from the organization. Second, with respect to JW and Fitton's Amended Counterclaim, Count One remains at issue as to damages only and Counts Two through Eleven remain at issue in their entirety.

I: BACKGROUND

A. Factual Background

The Court shall assume familiarity with the its January 17, 2007 and April 3, 2007 Memorandum Opinions, which each set forth in detail the factual background of this case. See Klayman v. Judicial Watch, Inc., Civil Action No. 06-670, 2007 WL 140978 (D.D.C. Jan. 17, 2007) (hereinafter "1/17/09 Klayman"); Klayman v. Judicial Watch, Civil Action No. 06-670, 2007 WL 1034937 (D.D.C. Apr. 3, 2007) ("4/3/07 Klayman"). The Court shall therefore only briefly address herein such facts as are necessary for resolution of the motions currently before the Court. Moreover, given the numerous issues raised by the parties, most of which implicate a discrete set of facts, the Court at this point provides only a short introduction to the facts of this case, with a more detailed discussion to follow below as is necessary for evaluation of a particular claim.

As previously established, Defendant Judicial Watch, Inc. ("JW" or the "organization") is a 501(c)(3) organization formed under the laws of the District of Columbia and headquartered in the District of Columbia. 4/3/07 Klayman, 2007 WL 1034937, at * 2. Defendant Fitton is President of Judicial Watch, Defendant Orfanedes is the Secretary and a Director of Judicial Watch, and Defendant Farrell is a Director of Judicial Watch (together, "Individual Defendants") (collectively with "JW," "Defendants"). Id. Plaintiff Larry Klayman ("Klayman") is the self-described founder and former Chairman, General Counsel and Treasurer of Judicial Watch, who resides in and practices law in the State of Florida. Id. From 1998 to 2003, Klayman was Chairman, General Counsel and Treasurer of JW, as well as an employee and member of the organization's Board of Directors. Defs.' Stmt. ¶ 1. On September 19, 2003, Klayman entered into a detailed Severance Agreement, signed by Klayman and Fitton, on behalf of JW, and attested to by Orfanedes, as Corporate Secretary of Judicial Watch. 4/3/07 Klayman, 2007 WL 1034937, at * 2; Defs.' Stmt. ¶¶ 3-11 & Ex. A (9/19/03 Severance Agreement).*fn1 Klayman signed the Severance Agreement both as an individual and in his capacity as President of his law firm, Klayman & Associates, P.C. ("K&A"). Defs.' Stmt. ¶ 6; see also Severance Agreement at p. 12. The parties negotiated the terms of the Severance Agreement over the course of several months prior to its execution. 4/3/07 Klayman, 2007 WL 1034937, at * 2; Defs.' Stmt. ¶¶ 3-9. Throughout the course of those negotiations, Klayman was himself a licensed attorney, and was represented by attorneys from two different law firms. 4/3/07 Klayman, 2007 WL 1034937, at * 2; Defs.' Stmt. ¶¶ 7-9.

B. Procedural Background

On April 12, 2006, Klayman filed the instant lawsuit. Shortly thereafter, Klayman filed his Second Amended Complaint, in which he alleges six causes of action against various combinations of Defendants, relating to his separation from JW. See Second Amended Complaint, Docket No. [12], (hereinafter, "SAC").*fn2 By a Memorandum Opinion and Order dated January 17, 2007, the Court dismissed Count Nine of the SAC, which alleges a claim of defamation, insofar as it relates to allegedly defamatory statements made in JW's Form 990 tax returns and allegedly doctored press quotations posted on JW's website. See 1/17/07 Klayman, 2007 WL 140978, at * 1. On April 3, 2007, the Court dismissed Count Five of the SAC, which alleged violation of Florida state law, see Klayman v. Judicial Watch, Civ. Action No. 06-670, 2007 WL 1034936, *1 (D.D.C. Apr. 3, 2007), and granted Defendants summary judgment as to parts of: (1) Count Six, which alleges breach of contract, in so far as it relates to claims that JW fraudulently induced Klayman to enter into the Severance Agreement; and (2) Counts Seven and Eight, which allege breach of contract, in so far as they relate to allegations that JW failed to pay Klayman for the period of time between September 15 through September 19, 2003, see 4/3/07 Klayman, 2007 WL 1034937, at * 6. Accordingly, Klayman's remaining claims consist of:

* Count Four: alleging violations of Section 43(a) of the Lanham Act, 15 U.S.C. §1125(a)(1)(A) and (B) against all Defendants, SAC ¶¶ 97-106;

* Count Six: alleging breach of contract (rescission) against JW, excluding claims of fraudulent inducement;

* Count Seven: alleging breach of contract (damages) against JW, excluding allegations that JW failed to pay Klayman for the period between September 15 and 19, 2003;

* Count Eight: alleging breach of contract (specific performance) against JW, excluding allegations that JW failed to pay Klayman for the period between September 15 and 19, 2003;

* Count Nine: alleging defamation as against all Defendants, but only based on claims that Defendants made defamatory statements to JW's employees and the media.

In addition, Defendants JW and Fitton have filed a Counterclaim against Klayman, which was amended on December 3, 2007. See Am. Counterclaim, Docket No. [86]. In their Amended Counterclaim, Defendants JW and Fitton assert 11 causes of action against Klayman, including for breach of contract, indemnification, trademark infringement, unfair competition, and cybersquatting. See id. ¶¶ 68-138.

C. The Instant Motions for Summary Judgment

Currently pending before the Court are the parties' various motions for partial summary judgment. First, Klayman filed a motion for partial summary judgment as to Count Six (breach of contract - rescission) of his Second Amended Complaint, which asserts a breach of contract claim based on alleged breaches of the Severance Agreement and seeks an order granting the equitable remedy of rescission. See Pl.'s MSJ, Docket No. [275]; Pl.'s Stmt., Docket No. [276]. Notably, despite the Court's repeated admonishments that the parties must comply with Local Civil Rule 7(h) and 56.1,*fn3 Klayman's statement of material facts filed in support of his motion failed to include references to the parts of the record relied on to support the statement, as required. The Court therefore struck Klayman's motion for partial summary judgment and the related statement in their entirety, but in its discretion, gave Klayman another opportunity to file a motion for partial summary judgment with a properly prepared statement. See 12/1/08 Min. Order. Klayman subsequently filed his revised motion and statement on December 3, 2008, with citations to the record as required. See Pl.'s MSJ, Docket No. [275]; Pl.'s Stmt., Docket No. [276]. Defendants thereafter filed a timely opposition and response statement. See Defs.' Opp'n, Docket No. [289]; Defs.' Resp. Stmt., Docket No. [290].*fn4 As such, pursuant to Local Civil Rules 56.1 and 7(h), in resolving Klayman's partial summary judgment motion, this Court "assumes that facts identified by the moving party in the statement of material facts are admitted, unless such a fact is controverted in the statement of genuine issues filed in opposition to the motion." LCvR 56.1; 7(h).

Second, Defendants have each filed a motion for partial summary as to Klayman's Second Amended Complaint, and Defendant JW filed a motion for partial summary judgment as to the Amended Counterclaim. Specifically, the Individual Defendants each move for summary judgment as to Count Four (Lanham Act) and Count Nine (defamation) of the Second Amended Complaint, as asserted against them personally. See Farrell MSJ, Docket No. [266]; Fitton MSJ, Docket No. [267]; Orfanedes MSJ, Docket No. [268]. JW moves for summary judgment as to Counts Four (Lanham Act) and Nine (defamation) in their entirety and as to Counts Six (breach of contract - rescission), Seven (breach of contract - damages) and Eight (breach of contract -specific performance), except for Klayman's "disparagement" claim arising from the allegation that JW actively misrepresented the reasons for Klayman's departure.*fn5 See JW MSJ-SAC, Docket No. [269]. Finally, JW also moves for summary judgment as to Counts One (breach of contract), Two (breach of contract), Three (indemnification), and Ten (breach of contract) of its Amended Counterclaim. See JW MSJ-CC, Docket No. [270]. Defendants filed a joint statement of material facts not in dispute in support of their motions for summary judgment. See Defs.' Stmt., Docket No. [265].

Klayman, however, failed to timely file an opposition and response statement in violation of this Court's Scheduling Order. See 9/16/08 Order, Docket No. [239], as amended by the Court's 10/22/08 and 11/18/08 Min. Orders. The Court had previously advised Klayman that "he must respond to Defendants' Motions [for summary judgment] by December 24, 2008," or "the Court shall consider the Motions for Summary Judgment conceded." 12/1/08 Order, Docket No. [274] at 2.*fn6 In addition, the Court had repeatedly denied Klayman's request for an extension of time for failure to show good cause. See 12/18/08 Min. Order; 12/23/08; 12/30/08 Order, Docket No. [293]; 1/7/09 Min. Order. Klayman was thus well aware that the Court had not granted him an extension of time in which to file his consolidated opposition and response statement and that failure to timely submit the filings might result in the Court considering the motions as conceded. Klayman nonetheless failed to timely file his consolidated opposition and response statement. See Docket Nos. [291], [292]. The Court therefore struck Klayman's untimely opposition and response statement-as it had previously warned Klayman it would do-for failure to comply with the Court's Scheduling Order, as amended. See 12/30/08 Order, Docket No. [293]. Klayman did, however, timely file several exhibits, including the substantive Second Declaration of Larry Klayman (hereinafter, "Second Klayman Declaration"), which remain on the record.

See Docket Nos. [284], [285], [286], [288]. Defendants' thereafter filed a consolidated reply in support of their motions for summary judgment.

Nevertheless, the Court emphasizes that it does not treat Defendants' motions for summary judgment as conceded. Rather, the Court has, as it must, scrutinized the record of the case as a whole as well as the relevant case law to address Defendants' motions for summary judgment on the merits. Cf. St. Paul Mercury Ins. Co. v. Capitol Sprinkler Inspection, Inc., 573 F. Supp. 2d 152, 177 (D.D.C. 2008) (finding that the court must "scrutinize the record [and] applicable case law" to address merits of summary judgment motion, despite the fact that the court struck the opposing party's opposition as untimely); Duffy v. Verizon Communs., Inc., No. 05-2005, 2007 WL 2506445, at *1 (D.D.C. Aug. 27, 2007) (granting motion as conceded under LCvR 7(b) and dismissing case with prejudice only after reviewing the pleadings, relevant case law, and the entire record in the case). Only where Defendants' factual assertions are properly supported by the record, as confirmed by the Court's own independent review, shall the Court treat such facts as admitted.

Moreover, the Court has, in the interests of justice, reviewed Klayman's stricken opposition and response statement, and notes that the arguments and assertions set forth in the untimely filings are largely, if not entirely, duplicative of arguments and assertions set forth in the Second Klayman Affidavit. Compare Pl.'s Stricken Opp'n, Docket No. [291] and Pl.'s Stricken Resp. Stmt., Docket No. [292], with Second Klayman Decl.*fn7 As explained above, the Second Klayman Declaration, as well as the other exhibits submitted by Klayman in opposition to Defendants' motions for summary judgment, have not been struck and remain on the record in this case. Although the Court does not consider the stricken opposition and response statement, the Court shall consider Klayman's arguments as contained in the Second Klayman Affidavit, which are virtually identical to those included in the untimely filings.

Indeed, even if the Court had not stricken Klayman's opposition and response statement for failure to comply with the Court's scheduling orders, it is easily apparent upon review of those filings that they would have provided the Court with no additional argument or assistance beyond that provided in the Second Klayman Affidavit. As to Klayman's stricken opposition, it is almost entirely devoid of any citations to supporting case law or legal authority. Indeed, Klayman's untimely opposition includes only one single case citation. See Pl.'s Stricken Opp'n at 18. Similarly, Klayman's response statement, although numbering 198 pages in total, is largely repetitious and consists almost wholly of block quotes taken from the Second Klayman Affidavit. See Pl.'s Stricken Resp. Stmt. For example, Klayman's responses to paragraphs 12 through 28, which discuss facts surrounding JW's October 2003 newsletter, are each identical and consist solely of verbatim quotes from the Second Klayman Affidavit. See id. ¶¶ 12-28. In addition to being untimely filed, Klayman's stricken response statement is also clearly in violation of the local rules, which require "a separate, concise statement of genuine issues setting forth all material facts as to which it is contended that there exists a genuine issue necessary to be litigated [and] which shall include references to parts of the record relied on to support the statement." LCvR 7(h). Thus, as a practical matter, the Court has reviewed and considered Klayman's substantive arguments in opposition to Defendants' motions, despite the Court's ruling striking his untimely opposition and response statement.

Finally, the Court notes that after the parties had each filed their respective motions for summary judgment, Magistrate Judge Kay issued a [301] Memorandum Opinion and [302] Order granting Defendants' [218] motion for sanctions and prohibiting Klayman from testifying to or introducing into evidence any documents in support of his damages claims or in support of his defenses to Defendants' counterclaims. The Court has, by separate order this day, overruled Klayman's objections to that decision and affirmed Magistrate Judge Kay's memorandum opinion and order in their entirety. As discussed in those opinions, Klayman has repeatedly failed to timely produce the evidence at issue, with the result that now, nearly a year after the close of discovery, Klayman has not produced any documents in support of his damages claims or in support of his defenses to Defendants' counterclaims. The Court pauses to raise this issue only to note that, as a practical matter, the discovery sanctions therefore have had no effect on the instant Memorandum Opinion as they merely serve to preclude Klayman from relying on evidence that he has never produced. Accordingly, the Court emphasizes that its decision provided herein is based on all evidence that has actually been produced in this case and is in the record now before the Court.

II. LEGAL STANDARD

Pursuant to Federal Rule of Civil Procedure 56, a party is entitled to summary judgment "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). See also Tao v. Freeh, 27 F.3d 635, 638 (D.C. Cir. 1994). Under the summary judgment standard, the moving party bears the "initial responsibility of informing the district court of the basis for [its] motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits which [it] believe[s] demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). In response, the non-moving party must "go beyond the pleadings and by [its] own affidavits, or depositions, answers to interrogatories, and admissions on file, 'designate' specific facts showing that there is a genuine issue for trial." Id. at 324 (internal citations omitted).

Although a court should draw all inferences from the supporting records submitted by the nonmoving party, the mere existence of a factual dispute, by itself, is insufficient to bar summary judgment. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). To be material, the factual assertion must be capable of affecting the substantive outcome of the litigation; to be genuine, the issue must be supported by sufficient admissible evidence that a reasonable trier-of-fact could find for the nonmoving party. Laningham v. U.S. Navy, 813 F.2d 1236, 1242-43 (D.C. Cir. 1987); Liberty Lobby, 477 U.S. at 251 (the court must 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"). "If the evidence is merely colorable, or is not sufficiently probative, summary judgment may be granted." Liberty Lobby, 477 U.S. at 249-50 (internal citations omitted). "Mere allegations or denials in the adverse party's pleadings are insufficient to defeat an otherwise proper motion for summary judgment." Williams v. Callaghan, 938 F. Supp. 46, 49 (D.D.C. 1996). The adverse party must do more than simply "show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Instead, while the movant bears the initial responsibility of identifying those portions of the record that demonstrate the absence of a genuine issue of material fact, the burden shifts to the non-movant to "come forward with 'specific facts showing that there is a genuine issue for trial.'" Id. at 587 (citing Fed. R. Civ. P. 56(e)) (emphasis in original).

III: DISCUSSION

A. The Parties' Motions for Summary Judgment as to Klayman's Breach of Contract Claims in Count Six, Seven and Eight of the Second Amended Complaint

Klayman, in Counts Six through Eight of the Second Amended Complaint, asserts nearly identical breach of contract claims against JW based on a variety of allegations, and seeks the remedies of rescission (Count Six), damages (Count Seven), and specific performance (Count Eight). SAC ¶¶ 115-147. The Court turns first to the parties' cross-motions for summary judgment filed as to Count Six (rescission) before then turning to Defendants' motions for summary judgment as to Count Seven (damages) and Count Eight (specific performance).

1. The Parties' Cross-Motions as to Count Six of the Second Amended Complaint - Breach of Contract (Rescission)

Although Klayman may set forth alternative claims for relief in his Second Amended Complaint, see Fed. R. Civ. P. 8(e)(2), and proceed on each claim past a motion to dismiss, under D.C. law, he cannot ultimately receive double redress for a single wrong. Id. at 916 (citing Giordano v. Interdonato, 586 A.2d 714, 717 (D.C. 1991)). That is, Klayman "may either affirm the contract and sue for damages, or repudiate the contract and recover that with which he or she has parted." Dean v. Garland, 779 A.2d 911, 915 (D.C. 2001) (citing Dresser, 465 A.2d at 840). But he may not "rescind for breach of contract and at the same time recover damages for the breach." Id. (citations omitted). Klayman, in apparent recognition that he must choose between the remedies asserted in his Second Amended Complaint, has moved for summary judgment only as to his claim for rescission set forth in Count Six. See generally Pl.'s MSJ. Specifically, Klayman alleges that he is entitled to rescission based on five alleged breaches of the Severance Agreement by Defendants: (1) Defendants' alleged failure to pay the cost of his and his family's health care insurance; (2) Defendants' alleged failure to provide him with copies of certain press materials and artist renderings; (3) Defendants' alleged failure to provide him backup expense documentation; (4) Defendants' alleged failure to make good faith efforts to remove him as guarantor of JW's lease; and (5) Defendants' dissemination of derogatory information about him to various media entities. Id. at 1-4. According to Klayman, these alleged "breaches of the Severance Agreement are material and require . . . that the Severance Agreement be ruled null and void and rescinded." Id. at 4. Defendants oppose Klayman's motion on the basis that he cannot establish a right to rescission as a matter of law, see generally Defs.' Opp'n, and have moved for cross-summary judgment as to Count Six of the Second Amended Complaint, see JW's MSJ at 28; Farrell's MSJ at 27; Orfanedes MSJ at 25; Fitton's MSJ at 23. For the reasons set forth below, the Court agrees with Defendants that Klayman, as a matter of law, is not entitled to rescission.

Under District of Columbia law,*fn8 "[n]ot every breach of an agreement or failure by one party exactly to perform entitles the other to rescind or avoid performance." Travis v. Travis, 203 A.2d 173, 176 (D.C. 1964) (citing Cooper v. Cooper, 35 A.2d 921, 924 (D.C. 1944)). Rather, it is "only where the breach is material-that is, receiving something substantially less or different from that for which he bargained-is one able to elect the alternative rights and the remedies available to him." Fowler v. A&A Co., 262 A.2d 344, 347 (D.C. 1970) (internal quotation marks and citations omitted). As the District of Columbia Court of Appeals has explained:

[T]he act upon which the person bases his right to no longer be bound by the contract must involve an unqualified refusal by the other party to perform, and should, in its legal effect, amount to a determination not to be bound by, or perform, the contract in the future. A mere dispute as to the manner of the performance, a misunderstanding as to the manner in which it shall be performed, not persisted in, does not justify a rescission by the other party.

Travis, 203 A.2d at 176 (internal quotation marks omitted). Moreover, rescission is unavailable if the party seeking rescission has failed to seek rescission within a reasonable time. Mariner Water Renaturalizer of Washington, Inc. v. Aqua Purification Sys., Inc., 665 F.2d 1006, 1069 (D.C. Cir. 1981). Finally, "[i]t is 'axiomatic' that equitable relief [such as rescission] will not be granted where the plaintiff has a complete and adequate remedy at law." Kakaes v. George Washington Univ., 790 A.2d 581, 583 (D.C. 2002).

The Court concludes that Klayman is not entitled to rescission as a matter of law. First, the alleged breaches, even if proven, do not justify rescission of the Severance Agreement. As set out above, Klayman contends that he is entitled to rescission based on five alleged breaches of contract by Defendants. However, two of these five alleged breaches are not included in Count Six of the Second Amended Complaint and are therefore not proper grounds for Klayman's rescission claim. Specifically, the Second Amended Complaint contains no allegation whatsoever that Defendants failed to provide him with copies of press materials and artist renderings pursuant to paragraph 4.E of the Severance Agreement. See generally Second Amended Complaint. Additionally, although the Second Amended Complaint does broadly allege that Defendants failed to provide Klayman with documents-an allegation that may be broadly read to encompass Klayman's claim that Defendants failed to provide him with back-up expense documentation-that allegation is not included as a basis for Count Six of the Second Amended Complaint. See id. ¶¶ 115-137. Rather, Klayman has asserted this claim only under Count Eight (specific performance). See id. ¶ 146. Klayman himself concedes that these are "new" breaches of the Severance Agreement not previously alleged in Count Six of his Second Amended Complaint. See Pl.'s Reply at 1. He nonetheless contends, without case law or legal support, that these new allegations are somehow "subsumed" into the Second Amended Complaint and that he therefore "moves not just for summary judgment on 'old' breaches, but the new ones as well." Id. Klayman is clearly wrong as a matter of law; he has not sought leave of this Court to amend his Second Amended Complaint to include these allegations in Count Six. See Fed. R. Civ. P. 15(a)(2) (stating a party may amend its pleading "by leave of court").

Accordingly, the only alleged breaches of contract asserted by Klayman that may be considered by the Court in evaluating his claim for rescission are: (1) Defendants' alleged failure to pay the cost of his and his family's health care insurance; (2) Defendants' alleged failure to make good faith efforts to remove him as guarantor of JW's lease; and (3) Defendants' dissemination of derogatory information about him to various media entities. Id. at 1-4. These alleged breaches, even if true, are merely a "dispute as to the manner of the performance," and therefore do "not justify a rescission by the other party." Travis, 203 A.2d at 176 (internal quotation marks omitted). To support his claim for rescission, however, Klayman must show conduct by Defendants that involves "an unqualified refusal . . . to perform." Travis, 203 A.2d at 176 (internal quotation marks omitted). Klayman has failed to do so. Rather, as Defendants emphasize, JW has already performed its key obligation under the Severance Agreement-paying Klayman a lump sum of $600,000 as severance and consideration for his agreement not to compete. Defs.' Stmt. ¶ 12; see also Severance Agreement ¶ 2. Klayman does not dispute that JW has satisfied its obligation under the Severance Agreement to pay him more than a half million dollars in consideration for his voluntary resignation and agreement not to compete with JW. Accordingly, it is evident from the record that JW has not demonstrated an "an unqualified refusal . . . to perform," as is necessary to justify rescission of the contract by Klayman. Travis, 203 A.2d at 176 (internal quotation marks omitted).

Second, the Court finds that Klayman has failed to move for rescission within a reasonable time after discovering facts justifying such a claim. As stated above, "one who seeks to rescind a contract must act within a reasonable time after discovery of the facts justifying rescission." Mariner Water, 665 F.2d at 1069. Although "[w]hat constitutes a reasonable time is ordinarily a question of fact, [] where the facts are clear and support but one inference, the question is one of law." Cambpell Music Co. v. Singer, 97 A.2d 340, 341 (D.C. 1953) (finding that "as a matter of law fifteen months was an unreasonable length of time" to delay before seeking rescission). Correspondence submitted by Klayman himself shows that he has been aware, as early as April of 2004, of each of the alleged breaches of the Severance Agreement asserted in his motion for summary judgment. See, e.g., Docket No. [285-4 at pp. 13-26] (Letter from Klayman to counsel for JW dated April 26, 2004 listing alleged breaches of Severance Agreement). Klayman did not file suit for rescission until April 12, 2006, almost a full two years after the record evidence shows he was aware of the underlying facts allegedly justifying rescission. Klayman has made no efforts to refute JW's assertion that the delay is unreasonable. See Pl.'s Reply. Moreover, the Court notes that under D.C. law, "one who seeks rescission must 'indicate to the other party at least the intent to restore the parties to the relative positions they would have occupied if no such contract had ever been made, and this as soon as the disenchanted party learns of the facts." Brown v. Hornstein, 669 A.2d 139, 143 (D.C. 1996). Although the Court has previously advised Klayman that he would "be required to return to Judicial Watch the $600,000 he received under the Severance Agreement," in order to succeed on his rescission claim, 1/17/07 Klayman, 2007 WL 140978, at *15, Klayman does not indicate anywhere in the record that he is willing to do so. Accordingly, the Court finds that Klayman failed to seek rescission within a reasonable time as a matter of law.

Third and finally, Klayman "has not shown why damages would not provide him with full and complete relief." Kakaes, 790 A.2d at 583. Indeed, Klayman has sought damages in the alternative and makes no argument as to why such damages would provide him less than complete relief. Equitable relief, such as rescission, is not appropriate where there is "a complete and adequate remedy at law." Id. This is particularly so here, where Klayman's request for rescission is at heart a request for specific performance-i.e., that "Klayman [] be restored to his position as Chairman and General Counsel of Judicial Watch." SAC ¶ 137. However, "[i]t is true that in common law contract cases the courts have hesitated to compel persons to work together or to enforce other ongoing human relationships." Hopkins v. Price Waterhouse, 920 F.2d 967, 980 (D.C. Cir. 1990). Klayman offers no case law or legal authority supporting award of such an unusual remedy in these circumstances, and, in the absence of any argument to the contrary, the Court concludes that Klayman has failed to show that he is entitled to reinstatement at JW as a matter of law.

Indeed, Klayman has failed to provide anycase law or legal authority in support of his claim for rescission-both his motion for partial summary judgment and reply are entirely devoid of any legal citations. See Pl.'s MSJ; Pl.'s Reply. Rather, Klayman bases his entire argument on the mistaken belief that the Court has previously ruled that he is entitled to rescission in this case. See Pl.'s Reply at 2 (stating that Defendants "now seek to reargue this Court's prior ruling that a breach of the Confidential Severance Agreement will give rise to Plaintiff's right to elect rescission of the Agreement"). Such a conclusion, however, is plainly incorrect. Although the Court previously denied Defendants' motion to dismiss Klayman's claim for rescission, the Court did not address the merits of the rescission claim in that decision and certainly did not hold that Klayman is entitled to such relief. See 1/17/07 Klayman, 2007 WL 140978, at * 15. Accordingly, the Court finds that Klayman is not entitled to rescission as a matter of law, and therefore DENIES Klayman's [275] motion for summary judgment and GRANTS JW's [269] motion for summary judgment insofar as it relates to Count Six of Klayman's Second Amended Complaint.

Having disposed of Klayman's motion for partial summary judgment, all that remains are Defendants motions for summary judgment, to which the remainder of this Memorandum Opinion is directed.

2. Defendants' Motions as to Count Seven of the Second Amended Complaint -Breach of Contract (Damages)

The Court now turns to JW's motion for summary judgment as to Count Seven of Klayman's Second Amended Complaint, which seeks monetary damages for various breaches of the Severance Agreement as enumerated above. Specifically, JW has moved for summary judgment as to allegations in Count Seven that JW breached the Severance Agreement by, inter alia: (1) failing to take affirmative steps to purchase the headquarters building and to remove Klayman as guarantor of the building's lease, SAC ¶¶ 66(F), 127, 145; (2) failing to return Klayman's personal property and assets as well as property and assets belonging to his law firm, Klayman & Associates, P.C. ("K&A"), id. ¶¶ 66(E), 126, 143; (3) failing to pay Klayman and his family for health care insurance, id. ¶ 66(C); (4) opening mail sent to Klayman at JW and failing to forward mail and telephone messages to Klayman, id. ¶¶ 66(A) & (H); (5) tortiously interfering with Klayman's new organization, Freedom Watch, Inc. ("Freedom Watch"), id. ¶ 66(A); (6) filing false and frivolous legal pleadings in proceedings in Florida, id. ¶ 66(G); (7) interfering with Klayman's former clients who had offered to assist with his Senate campaign, id. ¶ 66(J); and (8) instructing media outlets not to speak to Klayman and not to refer to him as Founder and former Chairman of JW, id. ¶¶ 124, 125.*fn9

At the outset, Defendants note that it is somewhat unclear as against which of the Defendants Klayman intended to assert Count Seven. Although Count Seven explicitly names only JW as a defendant, see SAC at p. 25, Klayman's prayer for relief as to that count asks the Court to award him damages "against the defendants, jointly and severally," id. at pp. 32. In an abundance of caution, the Individual Defendants have therefore moved for summary judgment as to Count Seven. Specifically, the Individual Defendants assert that, to the extent Klayman intended to assert a breach of contract claim against them, such a claim must fail because the Individual Defendants-as agents of JW-are not personally liable for the Severance Agreement, which was executed on behalf of JW. See Farrell MSJ at 27-28; Fitton MSJ at 23-24; Orfanedes MSJ at 25-26. "It is a general principle of corporation law that the officers and employees of a corporate entity are its agents." Paul v. Judicial Watch, Inc., 543 F. Supp. 2d 1, 5 (D.D.C. 2008). "Under the law of the District of Columbia, an agent is not personally liable on a contract it executes on behalf of a principal so long as it identifies the principal and discloses the agency relationship." Id.; see also Resnick v. Abner B. Cohen Advertising, Inc., 104 A.2d 254, 255 (D.C. 1954). Further, "[w]here a principal is disclosed, no liability will fall upon the agent for acts committed by the principal unless he binds himself for same by definite words or stipulation." Rittenberg v. Donohoe Construction Co., Inc., 426 A.2d 338, 341 (D.C. 1981). "Nor does liability attach to an agent of a disclosed principal for his act within the scope of the agency unless he binds himself by definite words or stipulation." Id.

The Severance Agreement is clearly between JW and Klayman. Farrell did not sign the Severance Agreement at all, so it is entirely unclear to the Court on what basis Klayman would allege that Farrell may be held personally liable. See generally Severance Agreement. Moreover, although Fitton and Orfanedes signed the Severance Agreement, they did so in their respective capacities as President and Corporate Secretary of Judicial Watch. See id. at p. 12. Nonetheless, Klayman broadly claims that the Individual Defendants "are liable individually as well as on behalf of JW" and that "[a] review of all of the affidavits and documents in the record show that [Fitton] in particular is liable individually." Second Klayman Aff. ¶ 29. Klayman, however, fails to provide any legal or factual support for this claim. Although he alleges that "documents in the record" support his claim, he has not actually included any citations to record evidence or otherwise directed the Court to such alleged evidence. See id. Moreover, the Court, upon its own independent review of the record, finds that the record is devoid of any evidence that Fitton or Orfanedes personally obligated themselves to the terms of the Severance Agreement or otherwise gave their consent to be personally bound. Accordingly, to the extent Klayman sought to allege Count Seven as against the Individual Defendants, the Court GRANTS summary judgment to Farrell, Fitton, and Orfanedes as to Klayman's breach of contract claim for monetary damages.

The Court therefore moves next to the merits of Klayman's breach of contract claim for damages against JW. As explained above, JW has moved for summary judgment on eight of the alleged breaches of contract asserted by Klayman in Count Seven of his Second Amended Complaint. The Court shall examine each in turn.

a. JW's Alleged Failure To Take Affirmative Steps To Purchase The Headquarters Building And To Make A Good Faith Effort To Remove Klayman As Guarantor Of The Building's Lease

JW first moves for summary judgment as to Klayman's allegations that the organization breached the Severance Agreement by failing to take affirmative steps to purchase the headquarters building and by failing to remove Klayman as guarantor of the building's lease, SAC ¶¶ 66(F), 127, 145. As to the first part of this allegation, JW asserts that the Severance Agreement contains no language obligating it to purchase, or attempt to purchase, its headquarters building. JW's SAC-MSJ at 10. Reference to the Severance Agreement confirms that the contract does not require JW to "take affirmative steps" to purchase the headquarters. See generally Severance Agreement. It is a basic principle of contract law that there can be no breach of an agreement where there is no agreement. See New Economy Capital, LLC v. New Markets Capital Group, 881 A.2d 1087, 1094 (D.C. 2005) (Under District of Columbia law, "the party seeking to enforce a contract must prove that a contract exists by demonstrating: '(1) agreement as to all material terms; and (2) intention of the parties to be bound.'") (quoting Jack Bauer, Inc. v. Office Space Dev. Corp., 664 A.2d 1236, 1238 (D.C. 1985)). As there is no provision in the Severance Agreement requiring JW to purchase (or attempt to purchase) the headquarters building, the failure to do so is not a breach of the Severance Agreement. Accordingly, the Court GRANTS JW's motion for summary judgment insofar as Klayman alleges that JW breached the Severance Agreement by failing to take affirmative steps to purchase the headquarters building.

With respect to the latter part of Klayman's allegation-that JW breached the Severance Agreement by failing to remove Klayman as guarantor of the lease-JW admits that it agreed in the contract to make a good faith effort to remove Klayman as guarantor. JW's SAC-MSJ at 11. Specifically, the Severance Agreement provides in relevant part that:

Judicial Watch agrees to continue to work in good faith to remove Klayman as guarantor of its lease for its Washington, D.C. headquarters . . . . Klayman acknowledges and agrees that he shall not receive any additional compensation from Judicial Watch above and beyond the Severance Pay and other benefits provided in this Agreement for his guarantying the lease.

Severance Agreement ¶ 9.B. JW argues, however, that it has satisfied its contractual obligation to make a good faith effort to remove Klayman as guarantor of the lease. JW's SAC-MSJ at 10-11. According to JW, shortly after Klayman's departure on September 19, 2003, Fitton contacted an agent for JW's landlord to discuss possible ways of removing Klayman as guarantor of the lease. Defs.' Stmt. ¶ 34. After a series of conversations in September and October 2003, the landlord proposed that Judicial Watch obtain a letter of credit from a bank in an amount equal to three years rent, or approximately $1.8 million, in lieu of Klayman continuing to serve as guarantor. Id. ¶ 35. JW determined that the cost of such an approach was not commercially acceptable and therefore sent a letter to the landlord's agent asking the landlord to reconsider. Id. ¶ 36. Neither the landlord or his agent responded. Id. ¶ 37. Based on these facts, JW asserts that it is entitled to judgment as a matter of law that it made a good faith effort to remove Klayman as a guarantor, despite the fact that such efforts ultimately proved unsuccessful. JW's SAC-MSJ at 10-12.

As an initial matter, JW has not addressed what legal standard the Court should apply in determining whether it met its obligation to exert a "good faith" effort. Rather, JW simply asserts that-whatever the standard may be-JW has clearly satisfied it as a matter of law. The Court does not agree. Whether a party to a contract has exerted a good faith effort is generally a question of fact. Cf. 23 Williston on Contracts § 63:22 (4th ed. 2006) ("Thus, whether particular conduct violates or is consistent with the duty of good faith and fair dealing necessarily depends upon the facts of the particular case, and is ordinarily a question of fact to be determined by the jury or other finder of fact."). Here, the Court cannot say as a matter of law that JW's efforts satisfied its obligation under the Severance Agreement, particularly where the evidence shows that JW, after rejecting the landlord's first offer, made little effort to follow-up with the landlord or his agent after receiving no response to their request for reconsideration.

JW also argues that, even if it breached the Severance Agreement by failing to make a good faith effort to remove Klayman as guarantor, it is nonetheless entitled to summary judgment because Klayman has not suffered damages as a matter of law nor can he articulate any actual damages. JW's SAC-MSJ at 12. Although it is true that Klayman has failed to produce any documentary evidence of actual damages in this case, and will therefore be unable to prove actual damages at trial, under District of Columbia law, "where a plaintiff proves a breach of a contractual duty . . . [but] offers no proof of actual damages or when the proof is vague and speculative, he is entitled to . . . nominal damages." Cahn v. Antioch Univ., 482 A.2d 120, 130 (D.C. 1984); Bedell v. Inver Housing, Inc., 506 A.2d 202, 205 (D.C. 1986) (same). Accordingly, the Court DENIES JW's motion insofar as it moves for summary judgment as to Klayman's allegation that JW breached its obligation to make good faith efforts to remove him as lease guarantor.

b. JW's Alleged Failure To Forward Klayman's Telephone Messages And Mail

JW next moves for summary judgment as to Klayman's allegation that the organization breached the Severance Agreement by opening mail sent to Klayman at JW and by failing to forward mail and telephone messages to him. SAC ¶¶ 66(A) & (H). JW argues that the Severance Agreement does not contain any language concerning the manner in which Klayman's telephone messages and mail should be handled, and that Klayman's breach of contract claim based on such alleged conduct must fail. JW's SAC-MSJ at 25. Reference to the Severance Agreement confirms that the contract does not contain any agreement as to the handling of Klayman's telephone messages or mail. See generally Severance Agreement. As explained above, it is a basic principle of contract law that there can be no breach of an agreement where there is no agreement. See New Economy Capital, 881 A.2d at 1094. As there is no provision in the Severance Agreement that Klayman points to requiring JW to forward his mail and his telephone messages, the failure to do so is not a breach of the Severance Agreement.*fn10

Accordingly, the Court GRANTS JW's motion for summary judgment insofar as Klayman alleges that JW breached the Severance Agreement by failing to forward his mail and telephone messages and by opening his mail without his permission.*fn11

c. JW's Alleged Tortious Interference With Freedom Watch

JW next moves for summary judgment on Klayman's allegation that the organization breached the Severance Agreement by "tortiously interfer[ring] with another entity funded by Klayman, Freedom Watch, Inc." SAC ¶ 66A. Once again, JW points out that the Severance Agreement does not reference Freedom Watch, an organization that did not exist at the time the Agreement was drafted, nor does it impose any obligations on JW with regards to any future entities that may be funded by Klayman. JW's SAC-MSJ at 25-26. Reference to the Severance Agreement confirms that the contract does not contain any reference to Freedom Watch or any future entities created and/or funded by Klayman. See generally Severance Agreement. As explained above, it is a basic principle of contract law that there can be no breach of an agreement where there is no agreement. See New Economy Capital, 881 A.2d at 1094. Klayman's allegation that JW breached the Severance Agreement by tortiously interfering with Freedom Watch thus fails.*fn12

In addition, Klayman has failed to provide any record evidence from which a reasonable jury could conclude that JW in fact "tortiously interfered" with Freedom Watch. Klayman asserts only one example of allegedly tortious behavior by JW: that the organization opened mail from the IRS to Klayman concerning Freedom Watch. Second Klayman Aff. ¶ 23. As discussed above, however, Klayman has not provided any evidence to support this allegation, see supra p. 26, and Klayman's self-serving, unsupported assertion is insufficient as a matter of law to defeat summary judgment. See Hinson, 579 F. Supp. 2d at 103 n. 5.*fn13 Accordingly, the Court GRANTS JW's motion for summary judgment insofar as Klayman alleges that JW breached the Severance Agreement by failing to forward his mail and telephone messages and by opening his mail without his permission.

d. JW's Alleged Interference With Klayman's Senate Campaign

JW next moves for summary judgment as to Klayman's allegations that the organization breached the Severance Agreement by "interefer[ring] with Klayman's relationship with Klayman's former clients who had offered to help Klayman in his Senate campaign." SAC ¶ 66J. As an initial matter, it is entirely unclear whether Klayman, in referring to his "former clients," intended to refer to clients he worked with while employed at Judicial Watch or clients that he had previously worked with in a private capacity. The Second Amended Complaint does not specify these individuals by name nor is there any evidence in the record identifying these alleged individuals. JW, in moving for summary judgment, has assumed that Klayman is in fact referring to clients he worked with while employed at Judicial Watch and argues that the Severance Agreement does not contain any terms or provisions purporting to govern or limit JW's own interaction with its own clients and former clients. JW's SAC-MSJ at 27-28. Significantly, Klayman does not dispute that his allegations refer to former clients he worked with while at JW nor does he dispute that the Severance Agreement contains no relevant terms or provisions regulating JW's interaction with its own former and current clients. Indeed, Klayman has entirely failed to address JW's arguments on this point. See Second Klayman Aff.*fn14 He has therefore conceded that this claim is without merit. See Franklin v. Potter, 600 F. Supp. 2d 38, 60 (D.D.C. 2009) (treating defendant's argument in motion for summary judgment as conceded where plaintiff failed to address in his response); Hopkins v. Women's Div., General Bd. of Global Ministries, 284 F. Supp. 2d 15, 25 (D.D.C. 2003) ("It is well understood in this Circuit that when a plaintiff files an opposition to a dispositive motion and addresses only certain arguments raised by the defendant, a court may treat those arguments that the plaintiff failed to address as conceded."), aff'd 98 Fed. Appx. 8 (D.C. Cir. 2004).

In addition, the Court notes that Klayman has failed to provide any evidence that JW in fact interfered with former clients who offered to help him with his Senate campaign. As stated above, Klayman has not briefed this point in the submissions now before the Court nor has he ever identified any specific individuals who were allegedly precluded from assisting with his Senate campaign. Morever, the Court, upon its own review of the record, finds no evidence to support this allegation. Accordingly, Klayman has not shown that there is any agreement between the parties that was breached or that any offending conduct actually occurred. The Court therefore GRANTS JW's motion for summary judgment insofar as Klayman alleges that JW breached the Severance Agreement by interfering with his Senate campaign.

e. JW's Alleged Failure To Return Property Belonging To Klayman And His Law Firm, K&A

JW moves for summary judgment as to Klayman's allegations that the organization breached the Severance Agreement by failing to return Klayman's personal property and assets as well as property and assets belonging to his law firm, K&A. SAC ¶¶ 66(E), 126, 143. As JW acknowledges, the organization agreed, pursuant to paragraph 4.B of the Severance Agreement, that, "[u]pon reasonable advance notice to Judicial Watch, Klayman shall be permitted to remove his personal effects (e.g., family photos and other personal property that he purchased with his personal funds)." Although the Second Amended Complaint does not specify the property or assets at issue, at deposition, Klayman identified four pieces of artwork that he claims JW failed to return to him, consisting of three pieces of artwork purchased at the Kennedy Gallery in Miami Beach and one piece purchased from a vendor at the Miami Art Deco Festival. Defs.' Stmt., Ex. 10 (Excerpts of Deposition of Larry Klayman) ("Klayman Dep.") at 244:4 - 246:21. Further, in discussing this allegation in his supporting materials, Klayman points only to the piece of artwork purchased from Art Deco and does not identify any other "personal property" or "assets" that he contends have been impermissibly retained by JW. Second Klayman Aff. ¶ 20 ("Defendants have not returned artwork which I purchased at the Miami Deco Arts festival.").

The Court therefore proceeds with the understanding that this allegation is based solely on JW's alleged failure to return the four pieces of artwork identified above.

According to JW, no reasonable jury could find, on the evidence now in the record, that the four pieces of artwork at issue are owned by Klayman, and not JW-that is, that Klayman either purchased the items with his own funds or reimbursed JW for the purchases if made on a corporate credit. JW's SAC-MSJ at 13-16. The Court agrees. First, as to the three pieces of artwork purchased at the Kennedy Gallery, the undisputed evidence in the record demonstrates that the items were charged by Klayman to JW's corporate American Express card on September 22, 2002. Defs.' Stmt. ΒΆ 54; First Prytherch ...


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