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Alemayehu v. Abere

United States District Court, District of Columbia

August 3, 2016

NEWAY ALEMAYEHU, Plaintiff,
v.
BELAY ABERE, et al., Defendants. Re Document No. 5

          MEMORANDUM OPINION

          RUDOLPH CONTRERAS United States District Judge

         Granting in Part and Denying in Part Defendant’s Motion to Dismiss

         I. INTRODUCTION

         Plaintiff Neway Alemayehu brings this action alleging that three individuals, Belay Abere, Bekalu Bayabile, and Iyossias Tilahun (collectively, “Defendants”), worked together to defraud Mr. Alemayehu out of his $460, 000 investment in a restaurant enterprise currently known as Amsterdam Café and Lounge. See generally Compl., ECF No. 1. Mr. Tilahun, proceeding pro se, has moved to dismiss Mr. Alemayehu’s complaint under Federal Rule of Civil Procedure 12(b)(6). See Def.’s Mot. Dismiss at 1, ECF No. 5. Because the Court concludes that Mr. Alemayehu has failed to state a claim upon which relief can be granted for his promissory estoppel and quantum meruit causes of action, the Court will grant Mr. Tilahun’s motion to dismiss as to those claims. Because, however, the Court also determines that Mr. Alemayehu has properly alleged his remaining claims, the Court will deny Mr. Tilahun’s motion to dismiss as to Mr. Alemayehu’s remaining claims.

         II. BACKGROUND

         According to the complaint, Mr. Bayabile and Mr. Abere approached Mr. Alemayehu about investing in a restaurant enterprise in April 2015.[1] Compl. ¶ 7. A written agreement, signed by Mr. Abere, described the terms of the investment: Mr. Abere would transfer a building lease and liquor license to BelayAbere Enterprises, LLC (“the LLC”); Mr. Abere and Mr. Bayabile would be 5 percent and 15 percent shareholders in the LLC, respectively; Mr. Alemayehu would be the majority shareholder (owning the remaining 80 percent) of the LLC; and Mr. Alemayehu would serve as the executive manager of both the LLC and the restaurant. Id. Mr. Abere also made oral assurances reinforcing these terms. See id.

         Based on these written agreement and oral assurances, Mr. Alemayehu decided to proceed with investing in the restaurant. Id. Mr. Alemayehu thus began contributing funds to “(a) pay back rents that [Mr.] Abere owed the landlord, along with taxes and insurance; (b) pay all legal fees to get the lease and liquor license transferred to the LLC; (c) finish the renovation of the restaurant; (d) replace the HVAC and water heater systems; (e) purchase and install new kitchen equipment; (f) install security and fire alarm systems; and (g) furnish the restaurant with tables, chairs, bar stools, a liquor/wine inventory, and a computerized cash register system.” Id. ¶ 9. Mr. Alemayhu paid for “substantial construction work” that was “performed over the course of more than three months.” Id. ¶ 8.

         But Mr. Alemayehu soon encountered difficulties. The landlord for the restaurant’s building refused to allow Mr. Abere to assign the building lease to the LLC. Id. ¶ 10. Because of Mr. Abere’s “history of being dishonest, not paying rent, and disappearing on [the landlord] for months at a time, ” the landlord wanted Mr. Abere to be personally liable for the rent. Id. Mr. Alemayehu, however, worked with the LLC’s attorneys in an effort to persuade the landlord to allow assignment of the building lease to the LLC. Id. Mr. Alemayehu also attempted to transfer the liquor license to the LLC, in accordance with the written agreement and oral assurances he had received. Id.

         During this time, however, Mr. Abere left the United States without informing Mr. Alemayehu, traveling to East Africa. Id. Mr. Abere remained abroad for nearly three months, and was “hardly reachable” during this time. Id. Mr. Alemayehu eventually received, however, assurance from Mr. Abere that he would return to the United States shortly, and that he would reach out to the landlord’s attorney to arrange assignment of the lease. Id. With this assurance, Mr. Alemayehu continued to supply funds for the restaurant’s rent, tax, and insurance. Id.

         After Mr. Abere’s return to the United States, he informed Mr. Alemayehu and the LLC attorneys that, curiously, the landlord would only assign the lease to the LLC if the landlord was “presented with an LLC operating agreement which showed [Mr.] Abere as the only member.” Id. ¶ 11. Mr. Abere requested, therefore, that Mr. Alemayehu be temporarily removed from the LLC membership documents. Id. Although “[n]either [Mr. Alemayehu] nor the LLC attorneys believed this to be an acceptable outcome, . . . the attorneys made the temporary changes until the assignment was accomplished.” Id. The amended operating agreement listed both Mr. Alemayehu and Mr. Abere as “manager[s].” Id.

         As a result of these issues with the lease and license transfers, the LLC attorneys eventually recommended a new plan for the restaurant, which they suggested was the “only realistic way forward.” Id. ¶ 12. First, “the lease, liquor license[, ] and business license, ” would remain “under [Mr.] Abere’s name.” Id. Mr. Abere would also “sign a binding agreement with the LLC that made the LLC the managing company until [Mr.] Abere regained the landlord’s trust and obtained her permission to transfer the lease, liquor license[, ] and business license to the LLC.” Id. Mr. Alemayehu, meanwhile, “would be the executive manager, have daily access to financial records, be able to participate in major corporate decisions, and secure the power of attorney from [Mr.] Abere.” Id.

         In accordance with this plan, in October 2015, the liquor license was subsequently transferred to Mr. Abere. Id. ¶ 13. But Mr. Abere once again left the United States “without completing the management agreement, without giving the power of attorney to [Mr. Alemayehu], and without resolving an ongoing disagreement with [Mr. Alemayehu] regarding the financial aspect of the management agreement.” Id. Despite these issues, the restaurant opened and began operating around this time. Id.

         A few months later, Mr. Abere returned to the United States. Id. ¶ 14. Shortly afterwards, Mr. Abere “argued that his superior liability protection and experience required that he take over the management and operation of the business.” Id. Mr. Abere assured Mr. Alemayehu that this takeover would be temporary. Id. Mr. Alemayehu eventually relented as he believed this course of action “to be beneficial . . . as long as [the] management was performed in an inclusive, collaborative way.” Id. But later, when Mr. Alemayehu requested that Mr. Abere complete the management agreement and sign the power of attorney, Mr. Abere delayed because “he needed legal advice.” Id. ¶ 15. Mr. Abere eventually refused to sign the power of attorney, id., and also refused to sign the “management agreement . . . that would have made [Mr. Alemayehu] the on-site executive manager consistent with the executive operation rights, ” id. ¶ 19.

         Sometime during these events, Mr. Abere hired Mr. Tilahun, who had previously worked only as a consultant for the restaurant, as the “general manager” of the restaurant with “major authority in terms of running the restaurant enterprise.” Id. ¶ 16. Mr. Alemayehu expressed to Mr. Abere that Mr. Tilahun was unqualified to serve as general manager, and “need[ed] to be replaced by a more experienced manager.” Id. ¶ 17. Mr. Tilahun reportedly “had very little people-to-people skills, and as a result the company had very bad restaurant reviews from customers.” Id.

         In addition, Mr. Tilahun presented several other issues for the restaurant. See Id. First, Mr. Tilahun “is a foreign national who does not possess the necessary authorization to work in the United States” and his hiring “thus exposed the restaurant enterprise senior executives . . . to potential liability in case of an Immigration Customs Enforcement investigation, which could result in closure and loss of [Mr. Alemayehu’s] investment.” Id. ¶ 16. Second, because of his immigration status, Mr. Tilahun could not apply to serve as “an [Alcoholic] Beverage Commission (ABC) Licensed manager, ” and therefore the restaurant operated without a licensed manager “which is against [the District of Columbia Alcoholic Beverage Regulation Administration’s] basic rules.” Id. ¶ 17.

         Mr. Tilahun, however, assisted Mr. Abere in undermining Mr. Alemayehu’s position in both the LLC and the restaurant. See Id. ¶¶ 16-18. Mr. Tilahun followed Mr. Abere’s instructions to keep Mr. Alemayehu “in the dark about [the restaurant’s] operations.” Id. ¶ 16. Mr. Tilahun was allegedly “promised a salary and commission structure as a reward” for doing so. Id. ¶ 17. Mr. Tilahun also reportedly had a “long history of securing financial assistance from [Mr.] Abere.” Id. That assistance, which apparently “included some of [Mr. Alemayehu’s] funds, ” allowed Mr. Tilahun “to acquire a Mercedes Benz for his own use and enjoyment.” Id.

         Mr. Tilahun also “maliciously interfere[d] with the contractual agreements” made regarding Mr. Alemayehu’s involvement in the restaurant. Id. ¶ 20. Specifically, Mr. Tilahun “began informing restaurant employees not to take any orders from [Mr. Alemayehu].” Id. Mr. Tilahun told the employees “that he work[ed] for [Mr.] Abere and [Mr.] Bayabile, ” which “created an impression among the employees that [Mr. Alemayehu] did not have any control or decision making authority.” Id. Mr. Tilahun reportedly also “badmouth[ed] [Mr. Alemayehu] to all restaurant employees, blaming [Mr. Alemayehu] to cover up [Mr.] Abere’s poor management and planning decisions.” Id.

         Likewise, Mr. Bayabile, the third LLC shareholder, also appeared to work against Mr. Alemayehu. Mr. Bayabile followed Mr. Abere’s instructions to “keep [Mr. Alemayehu] in the dark as to the financial operations of the restaurant enterprise.” Id. ¶ 18. Mr. Bayabile thus “continued to work against [Mr. Alemayehu’s] interest by totally aligning himself with [Mr.] Abere.” Id. ¶ 20.

         Despite the restaurant’s rough start, see Id. ¶ 17, starting in December 2015, Defendants “were able to realize the turnaround of the restaurant business, ” id. ¶ 20. Soon afterwards, however, Mr. Abere “changed the bank account of the merchant services to his personal account, without letting [Mr. Alemayehu] know about that change.” Id. ¶ 19. Mr. Alemayehu believes that Mr. Abere forged Mr. Alemayehu’s signature to do so. See Id. Mr. Abere has “refused to share financial statements and financial operations data with [Mr. Alemayehu]” and has “avoided all communication[s], discussions, and [Mr. Alameyhu’s] request[s] for explanation.” Id. Therefore, Mr. Alemayehu claims he “knows nothing about the financial status of the business, ” despite his status as an investor in the restaurant and as the majority shareholder in the LLC. Id.

         In February 2016, Defendants “delay[ed] in making timely rent payments” for the restaurant’s building, and as a result received complaints from the landlord. Id. ¶ 22. These rent payments were delayed even though Defendants had previously “solicited additional funding from [Mr. Alemayehu]” to make “overdue rent payments.” Id. To make these delinquent rent payments, Mr. ...


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