United States District Court, District of Columbia
MEMORANDUM OPINION AND ORDER
P. Mehta United States District Judge.
lawsuit arises out of a contract between Plaintiff Washington
Tennis & Education Foundation, Inc., and Defendant Clark
Nexsen, Inc., in which Defendant agreed to design and oversee
construction of a $10 million tennis and education facility
in southeast Washington, D.C. (“Architect
Agreement”). A little more than a year after entering
into the Architect Agreement, Plaintiff assigned “all
of [its] right, title and interest” in the agreement to
a related but separate entity, Washington Tennis &
Education Foundation East, Inc. (“WTEF East”),
which is not a party to this suit. After discovering various
alleged design flaws in the facility, Plaintiff filed this
action against Defendant, alleging breach of the Architect
Agreement and violation of the common law duty of
professional care. Defendant responded by filing a
counterclaim for breach of contract.
the court are three related motions. The first is
Defendant's Motion for Summary Judgment. Defendant seeks
entry of judgment in its favor on a host of grounds, but its
primary argument is that Plaintiff lacks standing to sue
because Plaintiff assigned all contractual rights it
possessed under the Architect Agreement to WTEF East. The
second motion is Defendant's Motion in Limine to Strike
the Expert Reports and Opinion Testimony of Jeffrey Stoiber
and John Farrell. The third motion before the court is
Plaintiff's Motion to Add WTEF East as a Co-Plaintiff.
Although Plaintiff insists that it has standing to pursue its
claims, it nevertheless moves to add WTEF East as a
co-plaintiff in order to preemptively cure any purported
court has considered the parties' pleadings and
accompanying materials, and it agrees that Plaintiff lacks
standing in light of its assignment of all of its contractual
interests to WTEF East. Further, because the court lacks
subject matter jurisdiction over Plaintiff's original
claims, the court correspondingly lacks authority to add WTEF
East as a party. Accordingly, the court grants
Defendant's Motion for Summary Judgment and denies
Plaintiff's Motion to Add WTEF East as a Co-Plaintiff.
Defendant's Motion in Limine is denied as moot.
Washington Tennis & Education Foundation, Inc., is a
nonprofit organization operating in the District of Columbia
that provides athletic and academic programs for children
from low-income families in the region. Pl.'s Opp'n
to Defs.' Mot. for Summ. J. & Mot. in Limine, ECF No.
50 [hereinafter Pl.'s Opp'n], at 1. In October 2010,
Plaintiff entered into a contract (“Architect
Agreement”) with Defendant Clark Nexsen, Inc.,
architecture and engineering firm, under which Defendant
agreed to provide architectural design and construction
oversight services for Plaintiff's new tennis and
education campus in southeast Washington, D.C. (“East
Capitol Campus”). Defs.' Ex. N, ECF No. 47
[hereinafter Architect Agreement], at 1-2, 6-7. Plaintiff
raised nearly $8 million to build the new facility. Pl.'s
Opp'n, Pl.'s Stmt. of Material Facts in Dispute, ECF
No. 50-1 [hereinafter Pl.'s Stmt.], ¶ 2.
December 2011, Plaintiff formed a new entity, Washington
Tennis & Education Foundation East, Inc. (“WTEF
East”). Pl.'s Opp'n, Ex. 2, ECF No. 50-3
[hereinafter Pl.'s Ex. 2], at 2-3. WTEF East was
incorporated as a non-stock corporation under Delaware law,
and established as a “supporting organization”
under Internal Revenue Code Section 509(a)(3), for the
purpose of supporting Plaintiff's charitable and
educational purposes. Id. at 3, 5; 26 U.S.C. §
509(a)(3). Plaintiff is the sole member of WTEF East.
Pl.'s Ex. 2 at 5. The formation of WTEF East enabled
Plaintiff to obtain an additional $2 million in financing for
the East Capitol Campus under the federal New Markets Tax
Credit program, which provides federal tax credits to private
investors who finance community development projects in
low-income neighborhoods. Pl.'s Mot. to Add WTEF East as
a Co-Plaintiff, ECF No. 49 [hereinafter Pl.'s Mot.], at 2
n.1; Defs.' Mot. for Summ. J., ECF No. 46 [hereinafter
Defs.' Mot.], Ex. L, ECF No. 46-15 [hereinafter
Defs.' Ex. L], at 2. WTEF East had to be created as a
separate entity to secure the New Markets Tax Credits.
Defs.' Mot., Ex. G, ECF No. 46-10 [hereinafter Grand
Dep.], at 60-61.
early 2012, due to the project's financing structure and
the creation of WTEF East, the parties to the Architect
Agreement changed. Plaintiff and WTEF East entered into an
agreement, made effective December 30, 2011, in which
Plaintiff assigned “all of [its] right, title and
interest” in the Architect Agreement to WTEF East
(“Assignment Agreement”). Defs.' Mot., Ex. O,
ECF No. 46-18 [hereinafter Assignment Agreement]. The
Architect Agreement, however, required Defendant's
consent to the assignment. Architect Agreement at 16 (Art.
10, § 10.3). Thus, in a letter dated February 13, 2012,
Plaintiff's President, Eleni Rossides, sought
Defendant's consent to assign Plaintiff's rights to
WTEF East and explained the need for the assignment as
In order to obtain financing for the project,
[Plaintiff's] lender, Capital One (“Lender”),
stipulated that [Plaintiff] transfer its leasehold interests
to a new entity which is known as [WTEF East]. . . .
Moving forward, all documents including, but not limited to[,
] amendments, change orders and so forth, must be submitted
to the Lender for approval. So that our team is not utilizing
an entity name which is no longer applicable to this project
and otherwise creating confusion with the Lender, [Plaintiff]
would like to formalize an assignment of its interests under
the [Architect] Agreement to [WTEF East].
Mot., Ex. P, ECF No. 46-19 [hereinafter Defs.'
Ex. P]; see also Defs.' Mot., Ex. Q, ECF No.
46-20 (E-mail from Maria Graziano to Adrian Lazaro, Feb. 13,
2012, with Defs.' Ex. P attached) (stating that
“WTEF East Inc[.] is the entity created to fund and
manage the new site [and] [t]hus, we will need to adjust the
[Architect Agreement] with similar information”);
Defs.' Mot., Ex. K, at 7. Defendant consented to the
assignment and, consistent with the agreement's new
structure, future amendments to the Architect Agreement
identified WTEF East as the project's
“Owner.” See Assignment Agreement at 1,
3; Defs.' Mot., Ex. S, ECF No. 46-22.
problems with the construction of the East Capitol Campus led
to the instant suit. In November 2015, Plaintiff filed this
action alleging various design defects in the East Capitol
Campus that it believed were attributable to Defendant,
including a defective HVAC system, a mis-located wall that
left the building's foundation exposed, and buckling tile
flooring. See Notice of Removal, ECF No. 1, Compl.,
ECF No. 1-3, ¶ 9. Plaintiff's Complaint advances two
theories of liability. In Count I, WTEF alleges Defendant
breached the Architect Agreement through errors and
shortcomings in its design of the East Capitol Campus and its
oversight of the construction process. Id.
¶¶ 11-13. In Count II, WTEF alleges that Defendant
vio lated its commo n law duty of professional care by
failing to perform its work with the skill and care
ordinarily provided by architects in this locality, and
violated industry standards. Id. ¶¶ 14-17.
Defendant responded by filing a ...