United States District Court, District of Columbia
Houshang Momenian, et al. Plaintiffs,
Michael M. Davidson, Defendant.
MEMORANDUM OPINION AND ORDER
Amit P. Mehta United States District Judge
Plaintiffs Houshang Momenian and Vida Momenian have filed suit against their former lawyer, Defendant Michael Davidson, for legal malpractice and breach of fiduciary duty. Plaintiffs allege that Defendant negligently represented them in connection with a D.C. Superior Court case that they filed on August 18, 2009, and later dismissed with prejudice on October 10, 2010, as part of a settlement agreement. Plaintiffs assert that Defendant negligently advised them to settle their claims. Defendant has moved to dismiss their Complaint. Because the court concludes that Plaintiffs’ claims are time-barred, it grants Defendant’s Motion to Dismiss.
A. Factual Background
1. The Relevant Real Estate Transactions
Plaintiffs are a husband and wife who, either directly or as beneficiaries of a trust, own real property in the District of Columbia. Compl., ECF No. 1-1, ¶ 6. In 1990, Plaintiffs purchased three adjacent properties, located in Southeast Washington, D.C. (the “Southeast Properties”), from Paul and Amelia Interdonato (the “Interdonatos”). In exchange for the Southeast Properties, Plaintiffs executed a $265, 000 promissory note payable to Paul Interdonato (the “Promissory Note”), which was secured against the three properties by a Deed of Trust Note. Id. ¶ 7.
Plaintiffs claim that the proceeds of four real estate transactions that occurred between 1997 and 2002 should have been credited toward satisfying the Promissory Note. First, in late 1997 or early 1998, Plaintiffs contracted to sell another property that they owned on Georgia Avenue, N.W. (the “Georgia Avenue Property”), but the sale fell through. Id. ¶ 8. Plaintiffs assert that the forfeited deposit on the unsuccessful sale, in the amount of $10, 000, was transferred to the Interdonatos and should have been applied to the balance due on the Promissory Note. Id.
Second, later in 1998, Plaintiffs assigned their interest in the Georgia Avenue Property to the Interdonatos, who eventually foreclosed on the property in June 1999. Id. ¶¶ 10-11. Several months later, the Interdonatos sold the Georgia Avenue Property for $120, 000. Id. ¶ 11. According to Plaintiffs, the Interdonatos agreed that over $78, 000 from the proceeds of the sale would be applied toward the balance due on Plaintiffs’ Promissory Note. Id. No such credit was given, however. Id.
Third, in late 1998, Plaintiffs sold the Southeast Properties to Emmebet Fikru and Tesfay Guebre (collectively “Fikru”). The transaction’s details are difficult to follow. But it seems that, as part of the sale transaction, the Interdonatos agreed to release their first position on the Deed of Trust Note on the Southeast Properties in exchange for a lump-sum payment of nearly $30, 000; a new $100, 000 promissory note from Fikru (the “Fikru Note”); and second position on the Deed of Trust Note. Id. ¶¶ 12-15. According to Plaintiffs, the nearly $30, 000 lump-sum payment (the “30, 000 Lump Sum Payment”) should have been credited against the outstanding amount they owed the Interdonatos. Id. ¶ 14.
In December 2001, Fikru sought to sell two of the three Southeast Properties. Id. ¶ 17. The Interdonatos agreed to the sale on the condition that the Fikru Note be secured by a first position on the deed of trust for the remaining third property. Id. While this was being arranged, in January 2002, Plaintiffs and the Interdonatos “entered into a Note Modification Agreement in which it was agreed that, after the application of certain adjustments, Plaintiffs’ outstanding indebtedness to the Interdonatos was at the time $141, 898.47.” Id. ¶ 18. Under that Agreement, Plaintiffs were to pay off the Promissory Note at a rate of $1, 300 per month starting in January 2002. Id. Several months later, in June 2002, Fikru’s sale of two of the Southeast Properties became final. Id. ¶ 19. According to Plaintiffs, Fikru was to have paid $50, 000 of the sale proceeds to the Interdonatos as part of that transaction. Id. Plaintiffs assert that this fourth and final sale proceed also should have been credited to the balance left on Plaintiff’s Promissory Note, but was not. Id.
According to Plaintiffs, from January 2002 to November 2012, they “faithfully and regularly” made the required $1, 300 per month payment due under the Note Modification Agreement. Id. ¶ 20. Over that period, they made 152 payments totaling $197, 600. Id.
2. The D.C. Superior Court Litigation
On August 18, 2009, Plaintiffs filed a lawsuit in D.C. Superior Court against the Interdonatos (the “D.C. Lawsuit”). Id. ¶ 21. Their lawyer was Defendant Michael Davidson. The D.C. Lawsuit alleged that the Interdonatos wrongfully had failed to apply at least $90, 000 in proceeds from the above-described four transactions against the outstanding balance on the Promissory Note. Id. ¶ 23. During the litigation, Plaintiffs claimed that they repeatedly asked Defendant to hire an accountant, or seek court appointment of ...