United States District Court, District of Columbia
C. Lamberth, United States District Judge
an ancillary dispute between attorneys over who will reap the
rewards of a sprawling litigation against the Islamic
Republic of Iran (Iran) under the state sponsor of terrorism
exception to the Foreign Sovereign Immunities Act (FSIA).
Plaintiff Jay Glenn filed a declaratory suit against
defendants Thomas Fortune Fay, Steven Perles, and their
respective law practices. Defendants were the lead attorneys
for plaintiffs in the action captioned Peterson v.
Islamic Republic of Iranlitigated before this Court. Glenn
claims he was employed by defendants to assist in that
litigation and seeks a declaratory judgment that he is
entitled to payment. Before this Court are Fay's Motion
to Dismiss [ECF No. 8] and Perles' Motion to Dismiss [ECF
No. 13], pursuant to Federal Rule of Civil Procedure
12(b)(6). For the reasons discussed below, this Court will
dismiss this action sua sponte.
October 23, 1983, suicide bombers from Hezbollah murdered 241
American servicemen and injured several more by bombing a
United States Marine Corps barracks in Beirut, Lebanon. This
Court previously presided over a consolidated action by
nearly one thousand plaintiffs consisting of the victims,
their families, and the representatives of their estates. On
September 7, 2007, this Court found Iran liable for damages
because it provided material support and assistance to
Hezbollah. Iran did not appear here, and default judgment was
entered in favor of the plaintiffs in the amount of more than
Peterson plaintiffs were represented before this
Court by the Fay Law Group, PA, Thomas Fortune Fay, the
Perles Law Firm, PC, and Steven R. Pedes (collectively,
"Fay and Perles"). Fay and Perles engaged Jay Glenn
to prove the amount of some of the Peterson
plaintiffs' damages to a Special Master. Glenn asserts
that, pursuant to a written agreement signed in 2003, Fay and
Perles agreed to pay Glenn 3% of the gross amounts collected
on judgments for plaintiffs represented before the Special
Master, plus an amount equal to the necessary expenses
incurred by Glenn. Compl. Ex. 1 [ECF 1-1]. Glenn alleges that
Fay and Perles referred 63 plaintiffs to Glenn for
representation before a Special Master. Compl. 3, ¶ 14.
Importantly, Glenn's fee was "contingent upon
collection and to the extent of collection only." Compl.
Ex. 1 [ECF No. 1-1].
further asserts that Fay and Perles orally agreed to pay
Glenn one-third of the one-third contingent fee received by
Fay and Perles (11.11% of the total recovery), on top of the
amount owed under the 2003 Written Agreement (3% of the gross
recovery), if Glenn were to engage and refer other potential
plaintiffs to Fay and Perles. Glenn claims to have engaged 40
additional plaintiffs pursuant to this Oral Agreement. Compl.
4, ¶ 17. He also claims the substance of the Oral
Agreement was confirmed in the following writings to Fay and
• "First, following Glenn's entry into a
Contingent Retainer Agreement with each additional plaintiff,
Glenn transmitted an executed copy of the same to Fay,
together with a cover letter confirming that the client was
referred by Glenn." Compl. 4, ¶ 19.
• "Second, following Glenn's entry into each
Contingent Retainer Agreement with the relatives of a Marine
Barracks bombing victim, Glenn completed a Family Information
Sheet. .. together with a letter which provided:
I located and executed Attorney Client Contracts for [names
indicated on Family Information Sheet]. In accordance with
prior discussions, I am entitled to an additional contingent
fee of 11.11 % of any recovery/interest for these [__]
claims." Compl. 4-5, ¶ 20.
• "Third, following the Special Master's entry
of a report and recommendation for each [plaintiff] Glenn
represented, Glenn transmitted a copy of the same to Fay,
together with a cover letter indicating the calculation of
his fee under both the [Written Agreement] and [Oral
Agreement], and Fay and Perles never objected." Compl.
5, ¶ 21.
Court entered default judgment in favor of the
Peterson plaintiffs. Glenn asserts that the 103
plaintiffs he represented pursuant to the Written and Oral
Agreements were awarded over $309 million. Compl. 5, ¶
22. However, Glenn claims that Fay and Perles repudiated the
agreement in 2010, advising Glenn that he "would not be
paid any amount under the [Written Agreement] or [Oral
Agreement]." Id. Glenn filed for declaratory
relief in the United Stated District Court for the Southern
District of New York, Glenn v. Fay, Case No.
1:10-cv-08287. There, Glenn sought a declaratory judgment
that (1) Glenn had a charging lien against Iranian assets in
New York in an amount equal to that owed under the Written
and Oral Agreements, (2) Glenn referred the 40 plaintiffs to
Fay and Perles, (3) Glenn should be permitted access to
sealed files in the Peterson case. Fay's Am.
Mot. to Dismiss Ex. 2 [ECF No. 8-3]. That case was
subsequently dismissed on jurisdictional grounds.
Id. at Ex. 4 [ECF No. 8-5].
2013, the Peterson plaintiffs successfully brought
an action to seize Iranian assets in the United States
District Court for the Southern District of New York. That
court ordered the turnover of $1.75 billion in assets held by
Citibank N.A., cash bonds that Bank Markazi-the Central Bank
of Iran-held in an account through an intermediary. The
court's order created a qualified settlement fund (QSF
trust) and transferred the seized funds to a trustee-the
Honorable Stanley Sporkin-for the benefit of the plaintiffs.
The court's order was affirmed by both the Second
Circuit and the United States Supreme
2016, Glenn filed this action seeking a sole declaratory
judgment that "upon Defendants' receipt of a
distribution from the QSF Trust, Defendants must immediately
remit to Glenn an amount to be determined at trial, plus
interest and costs, as required by the Associate Counsel
Agreement and the Additional Fee Agreement." Compl. 7,
¶ 30. Fay and Perles have moved that this action should
be dismissed pursuant to Federal Rule of Civil Procedure
12(b)(6) for failure to state a claim upon which relief may
be granted. Specifically, Fay and Perles argue that the case
is barred by the District of Columbia's three-year
statute of limitations on breach of contract actions, which
was triggered by the 2010 S.D.N.Y. suit. In the alternative,
Fay and Perles argue Glenn has failed to plead to necessary
elements of a breach of contract claim. Fay's Am. Mot. to
Dismiss [ECF No. 8]; Perles' Mot. to Dismiss [ECF No.
13]. Glenn counters that the statute of limitations would not
begin to run until Fay and Perles actually receive payment
and decline to pay Glenn. Mem. in Opp'n. to Fay's
Mot. to Dismiss 4-5. Further, Glenn argues that he is not
required to plead the elements of a breach of contract claim
because the entire purpose of a declaratory action is to