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Armenian Assembly of America, Inc. v. Cafesjian

March 9, 2010

THE ARMENIAN ASSEMBLY OF AMERICA, INC., ET AL., PLAINTIFFS,
v.
GERARD L. CAFESJIAN, ET AL., DEFENDANTS.



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

MEMORANDUM OPINION

This is the second of three related cases pending before this Court that arises out of a very bitter and very unfortunate dispute between Plaintiffs The Armenian Assembly of America, Inc. (the "Assembly") and The Armenian Genocide Museum & Memorial, Inc. ("AGM&M") (collectively, "Plaintiffs") and Defendants Gerard L. Cafesjian ("Cafesjian"), John J. Waters Jr. ("Waters Jr."), The Cafesjian Family Foundation, Inc. ("CFF"), and the TomKat Limited Partnership ("TomKat") (collectively, "Defendants"), relating to the construction of an Armenian genocide museum and memorial in Washington, D.C. In the above-captioned case, Plaintiffs have asserted eleven separate claims against Defendants, including breach of fiduciary duty, misappropriation of trade secrets, and breach of contract. Defendants have asserted nine separate counterclaims against Plaintiffs and Counterdefendant Hirair Hovnanian ("Hovnanian"), including breach of contract and defamation. On February 19, 2009, the Court denied Plaintiffs' partial motion to dismiss the counterclaims for unjust enrichment, constructive trust, and defamation. See [43] Mem. Op. (Feb. 19, 2009).

Currently pending before the Court in this action are the parties' motions for summary judgment. Plaintiffs/Counterdefendants have filed a [66] Motion for Partial Summary Judgment regarding AGM&M's claim for breach of fiduciary duty against Waters Jr. and Cafesjian (Claim I) and Defendants' counterclaim for defamation against the Assembly and Hovnanian (Counterclaim VIII). Defendants have filed a [68] Motion for Summary Judgment regarding all eleven of Plaintiffs' claims. Also pending before the Court is a [71] Motion to Compel the Production of Documents, filed by Plaintiffs-Counterdefendants against Defendants-Counterplaintiffs in this and the related actions, which were consolidated for purposes of discovery only.*fn1 The Court shall address that motion herein.

For the reasons explained below, the Court shall GRANT Defendants' motion for summary judgment with respect to Claims IV and V for breach of contract and breach of duty of good faith and fair dealing by TomKat and Waters Jr. and GRANT-IN-PART Defendants' motion as to Claim I for breach of fiduciary duty to AGM&M with respect to actions occurring before February 15, 2005, on the ground that they are time-barred. The Court shall DENY the motion in all other respects. The Court shall also GRANT Plaintiffs' motion for summary judgment with respect to Counterclaim VIII for defamation and DENY the motion in all other respects. The Court shall also GRANT-IN-PART Plaintiffs' motion to compel with respect to certain documents relating to the formation of the United States-Armenia Public Affairs Committee ("USAPAC"), the organizational structure and finances of CFF and GLC Enterprises, Inc., and the use of mailing lists and other databases by the Armenian Reporter newspaper. The Court shall deny Plaintiffs' motion to compel in all other respects.

I. BACKGROUND

The following facts are drawn from the summary judgment record assembled by the parties and the parties' statements of material facts that are not in dispute.*fn2

A. The Armenian Assembly of America and the Origins of the AGM&M

The Armenian Assembly of America (the "Assembly") is an Armenian-American advocacy group that is incorporated in the District of Columbia as a non-profit corporation. Pls.' Stmt. ¶ 6. In the mid-1990s, the Assembly received a pledge from Anoush Mathevosian, an Armenian-American philanthropist, for the purpose of constructing a permanent museum to the victims and survivors of the Armenian genocide.*fn3 Pls.' Stmt. ¶ 7. Ms. Mathevosian's pledge was initially for $3.0 million but was subsequently raised to $3.5 million. Defs.' Resp. Stmt. ¶ 7. Encouraged by Ms. Mathevosian's generosity, the Assembly began exploring possible sites for the museum in Washington, D.C., and solicited donations from the Armenian-American community for the purpose of establishing and constructing the museum. Pls.' Stmt. ¶ 8. In 2000, the Assembly identified a possible site for the museum at the National Bank of Washington building (the "Bank Building") at 14th and G Streets, N.W. (619 14th Street, N.W.), Washington, D.C., located just a few blocks away from the White House. Pls.' Stmt. ¶ 9.

At some point in the late 1990s, Cafesjian became involved with the Assembly's efforts to create an Armenian genocide museum.*fn4 With the help of donations from Cafesjian (through CFF), the Assembly purchased the Bank Building in early 2000. Pls.' Stmt. ¶ 9. As part of the Bank Building transaction, which involved both grants and loans from CFF, the Assembly executed a promissory note to CFF for $500,000.*fn5 See Defs.' Br., Ex. 71 (3/23/00 Letter from Assembly to Cafesjian) at 1; Pls.' Br., Ex. 5 (R. Kaloosdian Aff.) ¶ 9. According to Robert Kaloosdian, a founding member and long-time officer and Trustee of the Assembly, the Assembly eventually came to understand that this note would be forgiven. See Pls.' Br., Ex. 5 (R. Kaloosdian Aff.) ¶ 9. Defendants, however, dispute this. See Defs.' Br., Ex. 1 (Waters Jr. Aff.) ¶ 86. CFF and the Assembly also agreed to include a memorial named after Cafesjian as part of the museum project. See Defs.' Br., Ex. 71 (filed under seal).

Subsequent to the purchase of the Bank Building, Cafesjian, through an affiliated entity called The TomKat Limited Parternship ("TomKat LP"), acquired several lots adjacent to the Bank Building. Pls.' Stmt. ¶ 10. Cafesjian ultimately decided to donate these lots to the museum project.*fn6 Cafesjian wanted the museum project to be run by an independent entity, and the Assembly eventually decided to create one. Pls.' Stmt. ¶ 11; Cafesjian Defs.' Resp. Stmt. ¶ 11.*fn7

In October 2003, the Armenian Genocide Museum & Memorial, Inc. ("AGM&M") was incorporated as a District of Columbia nonprofit corporation. Pls.' Stmt. ¶ 12. The AGM&M was established for the purpose of constructing, owning, operating, and maintaining a permanent museum and memorial to the victims and survivors of the Armenian genocide. Pls.' Stmt. ¶ 2.

The Articles of Incorporation and By-Laws of AGM&M were ratified and adopted, respectively, pursuant to a Unanimous Written Consent of the Initial Trustees of AGM&M executed on October 30, 2003. Pls.' Stmt. ¶ 13. The parties agree that these three documents-the Articles, the By-Laws, and the Unanimous Written Consent-govern the operation of and organization of AGM&M. Pls.' Stmt. ¶ 14. Pursuant to the By-Laws and Articles, AGM&M has no members. Defs.' Br., Ex. 3 (By-Laws) § 2.17. The Articles provide that AGM&M's "affairs shall be managed and controlled by the Board of Trustees." Pls.' Stmt. ¶ 15. The Board of Trustees serves as the Board of Directors for purposes of the D.C. Non-Profit Corporations Act. Defs.' Br., Ex. 3 (By-Laws) § 2.2.

Under the Articles of Incorporation, there were four initial Trustees: Cafesjian, Hirair Hovnanian, Anoush Mathevosian, and Robert Kaloosdian. See Pls.' Br., Ex. 1 (Articles of Incorporation of AGM&M) (hereinafter, "Articles"). Each initial Trustee was designated as a representative of one of the four major donors to AGM&M: CFF (designating Cafesjian), Hirair Hovnanian (designating himself), Anoush Mathevosian (designating herself), and the Assembly (designating Kaloosdian). See Defs.' Br., Ex. 4 (Unanimous Written Consent) (hereinafter, "UWC") at 1-2. Pursuant to the By-Laws, the terms of these initial Trustees is perpetual, and each initial donor may appoint successor Trustees in the event that the initial Trustees are no longer able to serve. See Defs.' Br., Ex. 3 (By-Laws) § 2.4. A donor may elect one Trustee for every $5 million contributed to AGM&M (or elect a single Trustee to control as many votes as the donor has contributed in multiples of $5 million). Id. § 2.5. Unless otherwise provided in the By-Laws or the Articles, all questions are to be decided by an 80% vote of the Trustees at a meeting where a quorum is present. Id. § 2.7. Persons representing one-half of the aggregate eligible votes constitute a quorum at a duly-called meeting of the Board of Trustees. Id. § 2.6. The By-Laws also establish notice requirements that must be followed to properly convene a Board meeting: Trustees much each be given personal notice of the time and place of the meeting at least five, and no more than thirty, days in advance. Pls.' Stmt. ¶ 17.

As of October 31, 2003, Cafesjian became the Chairman and President of AGM&M and Waters Jr. became the Secretary and Treasurer of AGM&M. Pls.' Stmt. ¶¶ 20-21. Hirair Hovnanian became Vice Chairman of AGM&M. See UWC at 2.

B. The Grant Agreement & Transfer Agreement

On November 1, 2003, the Assembly executed a Grant Agreement with CFF and Cafesjian.*fn8 Pls.' Stmt. ¶ 22; see Pls.' Br., Ex. 12 (Grant Agreement). The Grant Agreement is signed by Hirair Hovnanian and Peter Voskibian on behalf of the Assembly and by Cafesjian on behalf of himself and CFF. See Grant Agreement at 11. The Grant Agreement memorialized CFF/Cafesjian's $3.5 million donation to the Assembly in 2000 for the purchase of the Bank Building (the "First Grant"). It states that the Assembly shall use the First Grant funds solely to purchase the Bank Building, pay any related transaction costs, and construct the "Gerard L. Cafesjian Memorial," which is described in section 3.2 of the Grant Agreement. See Grant Agreement §§ 1.2, 3.2. The Grant Agreement also memorialized a second donation (the "Second Grant") of $12.85 million for the purchase of four parcels of real estate surrounding the Bank Building: 1334-36, 1338, 1340, and 1342 G Street, N.W., Washington, D.C. (the "Adjacent Properties"). See id. § 2.2. These are the properties that Cafesjian had purchased through TomKat LP. See Defs.' Br. at 10. Collectively, the Bank Building and the Adjacent Properties shall be referred to as the "Grant Property" or "the Properties."

The Grant Agreement also describes several conditions imposed on the use of the grant funds. First, the Grant Agreement provides that the Grant Property "may only be used as part of the AGM&M, subject to plans for the AGM&M approved by the Board of Trustees of Armenian Genocide Museum & Memorial, Inc. (the 'Plans')...." See Grant Agreement § 3.1. Second, the Grant Agreement contains a termination and reversion clause:

If the Grant Property is not developed prior to December 31, 2010 in accordance with the Plans, or if the Grant Property is not developed in substantial compliance with the Plans including with respect to deadlines for completion of the construction, renovation, installation and other phases detailed in the Plans, then:

(i) in the event any portion of the Grants has not been funded, this Agreement terminates; and

(ii) to the degree any portion of the Grants has been funded, at the Grantor's sole discretion, the Assembly shall return to the Grantor the Grant funds or transfer to the Grantor the Grant Property.*fn9

Grant Agreement § 3.1(B). The Agreement states that the Assembly is in breach if it fails to use the Grants solely for the purposes set out in the Agreement or if it fails to satisfy any of the conditions set forth in the Agreement. Id. § 3.9. One of the conditions related to the Assembly was that it must have received "actual grants or firm pledges to support the AGM&M, including the Grants [from CFF/Cafesjian], totaling at least $20,000,000." Id. § 4.1.

In addition, the Grant Agreement conditions the gift of funds on the creation of AGM&M, Inc. as a separate entity. See Grant Agreement § 5.1. The Grant Agreement calls for the Assembly to enter into a "Transfer Agreement" with AGM&M, Inc. whereby the Assembly would transfer to AGM&M all of its "right, title, and interest" in assets and pledges contributed for the museum and memorial project. Id. § 5.3. The Grant Agreement calls for the Transfer Agreement to oblige AGM&M to honor all of the existing donor requirements at the time of transfer and to assume and agree to comply with the Assembly's obligations relating to the construction of the Cafesjian memorial. Id.

The Grant Agreement also provides that the Assembly "must issue a new promissory note... to replace the promissory note issued on March 17, 2000 by the Assembly in favor of [CFF] in the amount of $500,000." Grant Agreement § 5.4(A). If the promissory note is still outstanding when the Transfer Agreement is executed, the Agreement requires it to be transferred to AGM&M as part of the transfer of the Assembly's assets. Id. § 5.4(C). The Grant Agreement also contains a merger clause stating that the Grant Agreement represents the entire agreement between CFF/Cafesjian and the Assembly. See id. § 7.5.

On November 1, 2003, the Assembly and AGM&M entered into the Transfer Agreement. See Pls.' Br., Ex. 13 (Transfer Agreement). The Transfer Agreement provides that the Assembly shall contribute to AGM&M all of its rights, title, and interest to all assets contributed to the Assembly or held by the Assembly for the development, renovation, and construction of the museum and memorial project-valued at approximately $28 million. See Transfer Agreement § 1.1. As part of the Transfer, AGM&M must honor all of the Assembly's donor requirements existing at the time of transfer (or obtain donor consent to modification of any terms). Id. § 1.2(A). The Transfer Agreement explicitly states that AGM&M "assumes and agrees to comply with the [Assembly's] obligations relating to the memorial commemorating the Armenian Genocide under the [Grant Agreement]," which was attached as an exhibit. Id. § 1.2(B). The AGM&M also agreed to use the assets "solely to develop, construct, and operate the AGM&M." Id. § 1.3.

Subsequent to the execution of the Grant and Transfer Agreements, AGM&M entered into various agreements with TomKat LP, the Assembly, and a third party seller to obtain title to the Adjacent Properties. Pls.' Stmt. ¶ 29.

C. Governance of AGM&M by Cafesjian

The AGM&M Board of Trustees held its first meeting in New York on June 9, 2004. Defs.' Stmt. ¶ 28. The meeting was attended by Messrs. Hovnanian, Cafesjian, Kaloosdian, Waters Jr., and Mr. Rouben Adalian (on behalf of Ms. Mathevosian). Id. At the meeting, there was a review of the Museum formation documents, a property and financial report, and two proposals: (1) the selection of an architect, and (2) the selection of an executive director. Id. The parties dispute what happened at this meeting, although it is clear that no architect or executive director was selected by the Board. See Defs.' Stmt. ¶ 29; Pls.' Resp. Stmt. ¶ 29. Messrs. Hovnanian and Kaloosdian expressed some skepticism about the architect proposals that were put forward at the meeting, but Plaintiffs contend that the proposals were never put up for a vote. See Cafesjian Defs.' Stmt. ¶ 29; Pls.' Resp. Stmt. ¶ 29.

The second AGM&M Board of Trustees meeting was held in New York on February 10, 2005. Defs.' Stmt. ¶ 30. This meeting had the same attendees as the first meeting, and the agenda for the meeting was: (1) a financial and property status report; (2) selection of an executive director; (3) selection of an architect; and (4) an ANI status report*fn10 by Mr. Adalian. Id. The parties also dispute what transpired at this meeting, although the record indicates that Edgar Papazian, a young Armenian architect, gave a presentation to the Board about his vision for the project. See Defs.' Stmt. ¶ 31; Pls.' Resp. Stmt. ¶ 31. Some of the Board members were critical of Mr. Papazian's proposals for the museum. See Defs.' Stmt. ¶ 31; Pls.' Resp. Stmt. ¶ 31. Mr. Kaloosdian suggested that the proposed design was too aggressive and might not satisfy zoning or historic preservation regulations, saying "it looked as if a dirigible had crashed into a building." See Pls.' Opp'n, Ex. 10 (R. Kaloosdian Dep. Tr.) at 93-95. There is a dispute as to whether the Board also discussed the possibility of having a competition to select a world-class architect. See Stmt. ¶ 32; Pls.' Resp. Stmt. ¶ 32. No architect was selected by the Board at this meeting. The Board did approve retaining the services of one executive director candidate, Ms. Deborah Devedjian, although the details about her engagement and what was disclosed to the Board about it are disputed by the parties. See Defs.' Stmt. ¶ 33; Pls.' Resp. Stmt. ¶ 33.

A third Board meeting was held on July 26, 2005. Defs.' Stmt. ¶ 34. Ms. Devedjian gave a presentation to the Board regarding her business plan for the Museum, in which she proposed calling it "The Bank of Moral Courage." See Defs.' Br., Ex. 26 (Business Plan). Several Trustees were put off by the name proposed by Ms. Devedjian as well as her proposed budget. See Pls.' Opp'n, Ex. 10 (R. Kaloosdian Dep. Tr.) at 103-08; Pls.' Opp'n, Ex. 6 (G. Cafesjian Dep. Tr.) at 255 ("I would be embarrassed by a name like that."). The parties dispute whether Ms. Devedjian was re-engaged to continue her consulting. See Defs.' Stmt. ¶ 36; Pls.' Resp. Stmt. ¶ 36. However, the record shows that Ms. Devedjian ultimately billed AGM&M for additional work performed after the July 2005 meeting. See Pls.' Opp'n, Ex. 22 (filed under seal) (Letter from Devedjian to AGM&M Re: Outstanding Payments).

On September 9, 2005, Waters Jr. emailed the Board of Trustees requesting a meeting at the end of September to reach agreement on the scope, budget, management, and timing for the next phase of development. Defs.' Stmt. ¶ 35. Mr. Hovnanian replied that he did not believe it was necessary to attend a meeting to discuss these details: "I have not been involved in those things up to this point and have expressed a desire not to be involved with them. I continue my support and belief in this project." Defs.' Stmt. ¶ 36; Defs.' Br., Ex. 27 (9/12/2005 Email from

H. Hovnanian). Mr. Hovnanian has testified that his involvement in the museum project was limited to approving or disapproving the final concept and then soliciting a large donation from a multi-billionaire. Defs.' Stmt. ¶ 37. No Board meeting was held in the fall of 2005. Id. ¶ 36.

In February 2006, Cafesjian sent a memo to Messrs. Hovnanian, Kaloosdian, and Adalian stating that his goal was to push the project forward. Defs.' Stmt. ¶ 38. Cafesjian proposed to start by approaching targeted major donors and endorsed the selection of Papazian as the project design architect. Id. Cafesjian called for the Board to have its fourth meeting on April 25, 2006. Id. ¶ 39. The proposed agenda for the meeting included: (1) a fundraising campaign consisting of a "Phase I" $75 million "quiet" campaign from major donors and then a "Phase II" $75 million worldwide public fundraising campaign; (2) a proposed structure for AGM&M during its development phase; an "Honorary Committee Prospect List"; (4) a senior staff recruiting plan; and (5) the selection of Mr. Papazian as the design architect. Id. Waters Jr. circulated this agenda with accompanying materials, including a financial overview for 2005 and 2006. Id.

During the April 2006 meeting, the Board discussed Ms. Devedjian's demand for payment for additional work that she had performed regarding the business plan for the Museum. Id. ¶ 40. The Board also discussed Mr. Papazian's proposed design: Messrs. Hovnanian and Kaloosdian criticized the plans and thought they would turn off potential donors. Id. ¶ 41. Cafesjian responded by noting that Messrs. Hovnanian and Kaloosdian had the votes to block the selection of Papazian, and that if they were against it, it would not happen. Id. There was no decision taken on how to proceed in selecting an architect. Id. During the meeting, Mr. Hovnanian "inquired about a likely fallback position in the event Phase I targets were not reached." Id. ¶ 42. Mr. Kaloosdian "proposed considering the renovation of the bank building as one option." Id. Testimony in the record indicates that there was an "impasse" between Cafesjian and the other Trustees regarding the proper budget for the Museum. Id.

Mr. Adalian testified that by May 2006 "it was becoming apparent that there were issues at the Board level." Defs.' Stmt. ¶ 50. Mr. Kaloosdian testified that in the summer of 2006, the relationship among the Board members was "disintegrating." Id. Ms. Mathevosian testified that there were arguments between Cafesjian on the one hand and Messrs. Hovnanian and Kaloosdian on the other. Id. On May 24, 2006, Cafesjian sent a letter, through counsel, to the other three Board members stating that the problem has been one of two competing visions for AGM&M neither of which has commanded a consensus among the Trustees. His [Cafesjian's] has been a more ambitious, more expensive and, almost certainly, a more controversial vision. It is certainly a vision more difficult to achieve. The other, and doubtless more readily attainable solution, is to confine the effort to the existing National Bank of Washington building with the view that the purposes of AGM&M are best accomplished by the opening of the Museum sooner rather than later.

See Pls.' Opp'n, Ex. 15 (5/24/2006 Letter from William J. Brody to Trustees) at 1. The letter goes on to state that the problem of competing visions has been exacerbated by the voting arrangements on the Board which require an 80% affirmative vote before taking action. See id. at 2. The letter proposes that Cafesjian end his involvement with AGM&M, resigning as a Trustee and renouncing his right to appoint future Trustees. See id. The letter further suggests that if Cafesjian were to resign, he would expect AGM&M to repay the $500,000 debt that is outstanding and that the Adjacent Properties would revert to him since they would not be needed for the scaled-back Museum. Id. The provisions in the Grant Agreement regarding the Bank Building would remain unchanged, but Cafesjian would eliminate any requirement that AGM&M build a memorial. See id. at 2-3.

On August 2, 2006, Robert Kaloosdian responded to Cafesjian's counsel on behalf of the other Trustees. See Pls.' Br., Ex. 16 (8/2/2006 Letter from R. Kaloosdian to William J. Brody). In the letter, Mr. Kaloosdian states that "[i]n all candor, we were quite surprised to receive the letter and Mr. Cafesjian's assertion of two competing visions for AGM&M. There have not been two competing visions." Id. at 1. The letter asserts that Cafesjian has acted as the chief executive officer of the Museum project and that the other Trustees encouraged that. Id. The letter asserts that the other Trustees did not object to Mr. Cafesjian's engagement of an architect or other plans and "at no time stood in the way of any of his decisions." Id. The letter expressed support for Cafesjian's vision, despite some concerns about its cost, and urged Cafesjian to withdraw his attempt to separate from AGM&M. Id. at 1-2. On August 26, 2006, Cafesjian's counsel responded. See Pls.' Br., Ex. 17 (8/26/2006 Letter from W. Brody to the other Trustees). The letter disagreed with many of the facts stated by the Trustees and reaffirmed Cafesjian's desire to part ways with AGM&M. Id. The letter restated the terms proposed in the earlier letter for Cafesjian's departure, and proposed as an alternative that AGM&M simply be liquidated. Id. at 2. The letter also stated that because of AGM&M's financial situation, Cafesjian would no longer be advancing AGM&M funds to cover expenses. Id.

Cafesjian resigned his position as President and Chairman of AGM&M on September 13, 2006. Pls.' Stmt. ¶ 19.However, he remained a Trustee until May 2, 2007. Id. Cafesjian's resignation letter indicated that Waters Jr. intended to resign as Secretary/Treasurer as soon as the Board of Trustees identified a successor. See Pls.' Br., Ex. 10 (9/13/2006 Letter from Cafesjian to the other Trustees) at 1.

D. The Memorandum of Agreement and the Lis Pendens

On October 23, 2006, Waters Jr. executed a Memorandum of Agreement Reserving Rights ("MOA") between AGM&M and CFF. See Pls.' Br., Ex. 18 ("MOA"). The MOA explains that pursuant to the Grant Agreement, "the Assembly agreed, among other things, to undertake the development of certain real properties situated in the District of Columbia ('Development Obligations') which properties are described in Exhibit A attached hereto...." MOA at 1. The properties listed in Exhibit A are the Bank Building and the Adjacent Properties. MOA at 3-4. The MOA further explains that the Grant Agreement "provided for the reservation of certain reversionary rights in the CFF in the event that the Assembly failed to perform the Development Obligations." MOA at 1. The MOA goes on to explain that pursuant to the Transfer Agreement, "AGM&M agreed, among other things, to undertake the Development Obligations of the Assembly." Id. The MOA states that "the AGM&M and the CFF desire to execute this memorandum and record it among the land records of the District of Columbia, in order to provide notice of the Development Obligations contained in the Transfer Agreement." Id. Waters Jr. signed the MOA for both parties, in his capacity as Secretary/Treasurer for AGM&M and in his capacity as Vice President of CFF. See id. at 2. Waters Jr. sent the executed MOA to the District of Columbia Recorder of Deeds on October 23, 2006, and it was recorded on October 27, 2006. See id. at 3; Pls.' Stmt. ¶ 40.

Cafesjian testified that he had directed Waters Jr. execute the MOA and record it. See Pls.' Br., Ex. 6 (G. Cafesjian Dep. Tr.) at 303. The day after Waters Jr. executed the MOA, he attended a meeting of the Board of Trustees. Pls.' Stmt. ¶ 45. Waters Jr. never informed the other members of the Board of his actions regarding the MOA. Id. ¶ 46.

On April 26, 2007, Cafeesjian and CFF filed a complaint against the Assembly in the United States District Court for the District of Minnesota seeking, inter alia, rescission of the Grant Agreement and restitution of all donations made. Pls.' Stmt. ¶ 54. Cafesjian and CFF sought a declaration that the Assembly had breached the Grant Agreement and sought damages for the failure to reissue the promissory note or repay the $500,000 loan as required by the Grant Agreement. Defs.' Resp. Stmt. ¶ 54. This case was ultimately dismissed by the court for failure to join a necessary party, AGM&M. See Pls.' Opp'n, Ex. 45 (Order of Dismissal).

On May 2, 2007, Cafesjian tendered his resignation from the AGM&M Board of Trustees and appointed Waters Jr. to act as CFF's designated Trustee in his place. On May 7, 2007, the Board of Trustees convened a meeting, with Waters Jr. present by telephone. Defs.' Stmt. ¶ 60. At the meeting, a discussion occurred regarding whether or not Cafesjian and CFF's conduct in filing the action against the Assembly in Minnesota, as well as Waters Jr.'s actions in executing and recording the MOA, had created a conflict of interest and breach of fiduciary duty which prohibited Waters Jr. and/or CFF from participating in the discussions or voting on proposals for going forward with the development of the museum. See Defs.' Br., Ex. 32 (filed under seal) (5/7/2007 Meeting Draft Transcript) at 1-13. Waters Jr. declined to answer many questions about this subject. Id. The details surrounding what occurred at this meeting are hotly disputed by the parties. However, it is clear that at some point during the meeting, Waters Jr. disconnected the phone, and the remaining Trustees proceeded with the meeting without him. See id. at 13-14.

In addition to the April 26, 2007, lawsuit filed by Cafesjian and CFF in the District of Minnesota against the Assembly regarding the $500,000 promissory note, see Pls.' Opp'n, Ex. 44, the record indicates that there have been five other lawsuits filed arising out of disputes over the museum. On June 7, 2007, AGM&M filed the first of three related actions now pending before this Court; the lawsuit was filed in the Superior Court of the District of Columbia and removed to this Court on July 16, 2007. Among other things, AGM&M claimed that Cafesjian and Waters Jr. had breached their fiduciary duty by filing the MOA. On September 28, 2007, CFF filed a derivative lawsuit in this District against AGM&M, the Assembly, and the other Trustees to enjoin AGM&M from developing the museum without participation by trustees from CFF. See Pls.' Opp'n, Ex. 47. On October 10, 2007, the Cafesjian Defendants and TomKat LP filed a lawsuit in the District of Minnesota against AGM&M and the Assembly to enjoin arbitration of the parties' disputes. See Pls.' Opp'n, Ex. 48. On February 15, 2008, the Assembly and AGM&M filed this action. A third related action now pending before this Court was filed by the Cafesjian Defendants and TomKat LP against AGM&M and the Assembly on February 13, 2008, in federal court in Minnesota and subsequently transferred to this Court.

On March 19, 2009, the AGM&M Board called a special meeting by telephone to consider the removal of Waters Jr. as the CFF Trustee and to remove any other CFF-designated successor Trustees as well as CFF's right to act as a Trustee or appoint Trustees. See Defs.' Ex. 36 (3/19/2009 Meeting Minutes). Notice of this meeting was not provided to CFF. See Defs.' Stmt. ¶ 66; Pls.' Resp. Stmt. ¶ 66. The Trustees present at the meeting discussed issues relating to conflicts of interest between CFF and the business of AGM&M. See Pls.' Resp. Stmt. ¶ 66. Ultimately, the Board of Trustees voted to remove Waters Jr. as a Trustee and to terminate CFF's rights as an initial donor. Id.

E. Defendants' Involvement with the Assembly

Cafesjian and Waters Jr. became Trustees of the Assembly in the late 1990s. Defs.' Stmt. ¶ 72. During their time as Trustees, they received a copy of the 2003 Assembly Trustee Directory, which was sent to all Assembly Trustees. Id. In January 2007, Mr. Hovnanian and the Assembly suspended Cafesjian and Waters Jr. from the Assembly Board of Trustees. Defs.' Stmt. ¶ 56. The meeting minutes from the Assembly's Board meeting indicate that Cafesjian and Waters Jr. were suspended [---------------------------------REDACTED--------------------------------] See Defs.' Br., Ex. 58 (filed under seal) (1/12/2007 Assembly Board of Trustees meeting minutes) at 1.

On June 18, 2007, the Assembly sent out a letter to its membership regarding the status of the museum project and the lawsuit filed by Cafesjian and CFF against the Assembly in April 2007. See Counterclaim, Ex. 5 (6/18/2007 Letter). The letter was signed by Hirair Hovnanian as Assembly Chairman and Carolyn Mugar as President of the Assembly. See id. The letter stated that "[t]he Assembly led the initial three-year effort to locate an appropriate site for an Armenian Genocide museum" and that "Cafesjian joined the Assembly and other donors in making the purchase of the National Bank of Washington a reality." Id. The letter went on to describe Cafesjian's subsequent purchase of the adjacent ...


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