United States District Court, District of Columbia
MEMORANDUM OPINION: GRANTING IN PART AND DENYING IN
PART DEFENDANTS' MOTIONS TO DISMISS
DENYING THE FAY DEFENDANTS' MOTION FOR SUMMARY
HONORABLE ROYCE LAMBERTH UNITED STATES DISTRICT JUDGE
the Court are the following motions and all responses and
• Defendants Thomas Fay and Fay Law Group's Motion
to Dismiss. (ECF#10).
• Defendants Thomas Fay and Fay Law Group's
alternative Motion for Summary Judgment. (ECF#10).
• Defendants Steven Perles and Perles Law Firm's
Motion to Dismiss. (ECF #12). Because the arguments in each
are nearly identical, the Court will refer to the
defendants' two motions to dismiss collectively as the
"motions to dismiss" except where distinguishing
between the two is necessary. For the following reasons, the
Court will DENY the motion for summary
judgment and GRANT IN PART AND DENY IN PART
the motions to dismiss.
Thomas Fay and Steven Perles were lead counsel for the
plaintiffs in Peterson v. Islamic Republic of Iran,
Case Nos. 01-cv-2094, 01-cv-2684, an action commenced in this
Court by victims of the 1983 Beirut barracks bombings and
their relatives against Iran. During their time as lead
counsel, Messrs. Fay and Perles worked together in a
partnership known as "Fay & Perles"
("F&P"), of which each was a principal. F&P
no longer exists as a law firm. Messrs. Fay & Perles have
dissolved their partnership and have each started new law
firms of their own- Fay Law Group and Perles Law Firm, the
other named defendants in this case.
2003, this Court entered a default judgment against Iran in
the Peterson action and directed that all damages
claims be submitted to court-appointed special masters whose
reports the Court would consider in determining each
plaintiffs damages. (Peterson v. Islamic Republic of
Iran, 264 F.Supp.2d 46, 65 (D.D.C. 2003)). Following the
default judgment, F&P entered into two agreements with
Mr. Glenn, the plaintiff in this case (the
"Agreements"). In the first, F&P retained Mr.
Glenn to represent the plaintiffs in damages proceedings
before the special masters and the Court (the "Associate
Counsel Agreement"). In the second, F&P offered Mr.
Glenn an additional share of their contingency fee if Mr.
Glenn could find additional plaintiffs for the
Peterson case (the "Additional Fee
accounts, Mr. Glenn seems to have performed his part
admirably. According to uncontested portions of the
complaint, Mr. Glenn found an additional 40 plaintiffs for
the Peterson case and successfully represented all
of the plaintiffs in their damages proceedings. The
culmination of Mr. Glenn's work on behalf of F&P came
on September 7, 2007, when this Court awarded damages
totaling more than $309 million to the Peterson
plaintiffs. (Peterson v. Islamic Republic of Iran,
515 F.Supp.2d 25, 60-66 (D.D.C. 2007)). But despite his work
being completed, Mr. Glenn's payment was not due at that
time. Instead, Mr. Glenn's payments were due under the
Agreements when and to the extent that the judgment was
collected upon. And the "truth is that the prospects for
recovery upon judgments entered in these cases are extremely
remote." (In re Islamic Republic of Iran Terrorism
Litg., 659 F.Supp.2d 31, 37 (D.D.C. 2009)).
the remote chances of recovery, F&P repudiated their
obligations under the Agreements in 2010. At that time, Mr.
Glenn sued Messrs. Perles and Fay and F&P in New York,
seeking a declaratory judgment that the Agreements were still
valid and other related relief (but not damages). (Glenn
v. Fay, No. 10-cv-8287-WHP (S.D.N.Y.2010)). That
declaratory judgment suit was dismissed on jurisdictional and
more years passed with no significant developments in this
case. Then, in 2016, the Supreme Court decided
BankMarkazi v. Peterson, 136 S.Ct. 1310 (2016),
which made certain Iranian assets available to satisfy
judgment against Iran, including the Peterson
judgment. On June 6, 2016, those assets were approved for
distribution to the plaintiffs (including the
Peterson plaintiffs) and their attorneys. But the
defendants once again refused to pay Mr. Glenn for his
services. In December, Mr. Glenn filed this action seeking
payment pursuant to the Agreements. Mr. Glenn asserts breach
of contract and quantum meruit claims against all of the
defendants. The defendants have moved to dismiss on various
of the Parties' Arguments; Motions to
The Defendants' Arguments
The Defendants Argue that Mr. Glenn's Claims Are
defendants acknowledge that they repudiated any contracts
they had with Mr. Glenn in 2010, telling him explicitly that
they would not pay him anything. Despite this repudiation,
they argue that all claims in Mr. Glenn's suit should be
dismissed as time-barred.
defendants argue that both of Mr. Glenn's causes of
action accrued and the statutes of limitations began to run
in 2010. They point to two events, both occurring in 2010, at
least one of which triggered the statute of limitations: (1)
their anticipatory repudiation of the contracts and their
making that repudiation known to Mr. Glenn, and (2) Mr.
Glenn's filing a declaratory judgment action against the
defendants in New York seeking to uphold the contract. The
defendants argue that under D.C. law, their unequivocal
anticipatory repudiation of the contracts, made known to Mr.
Glenn, was sufficient to constitute a breach that triggered
the running of the statutes of limitations for both of Mr.
Glenn's claims. Alternatively, they argue that Mr. Glenn,
by filing the declaratory judgment action, elected to treat
their anticipatory repudiation as a breach of contract and
thereby triggered the running of the statutes of limitations.
Washington, D.C, the statute of limitations for contract
actions is three years. (D.C. Code § 12-301(7)). The
statute of limitations for quantum meruit / unjust enrichment
claims is three years as well. (D.C. Code § 12-301 (8)
(setting a three-year statute of limitations for all causes
of action not specially prescribed elsewhere in §
12-301)). So if Mr. Glenn's causes of actions accrued in
2010, then the statutes of limitations expired in 2013, long
before Mr. Glenn filed the present suit in 2016. Therefore,
the defendants argue that all of Mr. Glenn's claims
should be dismissed as to all defendants.
Fay Law Group Argues that It Cannot Be Held Liable for the
Acts of Fay & Perles.
the defendants, Fay Law Group ("FLG"), argues that
Mr. Glenn alleges no facts in his complaint from which a
claim against it can plausibly be inferred. In his complaint,
Mr. Glenn alleges that FLG "is a successor to and is
responsible for debts incurred by Fay & Perles."
(ECF #1 at 2, ¶8). FLG argues that this "is a
conclusion of law, not a statement of fact, " and that
Mr. Glenn pleads no facts that actually support this
conclusion. Thus, because FLG did not itself enter into a
contract with Mr. Glenn and because Mr. Glenn alleges no
facts that would make FLG liable on contracts entered into by
Fay & Perles or by Mr. Fay, the complaint contains no
facts from which a claim against FLG can plausibly be
inferred and must be dismissed as to FLG.
The Plaintiffs Arguments
Mr. Glenn Argues that His Claims Are Not
response to the defendants' arguments that his claims run
afoul of the statute of limitations, Mr. Glenn raises three
independent arguments: (1) that the doctrine of anticipatory
repudiation is inapplicable to this case, (2) that even if
the doctrine of anticipatory repudiation were applicable to
this case, he did not elect to treat the repudiation as a
present breach, and (3) that the statute of limitations
should be equitably tolled.
Mr. Glenn Argues that the Doctrine of Anticipatory
Repudiation Does Not Apply to this Case.
Glenn acknowledges that the defendants repudiated any
obligation to pay him under the Agreements in 2010. But Mr.
Glenn argues that neither this anticipatory repudiation nor
his reaction to it could trigger the statute of limitations
in this case. He argues that the doctrine of anticipatory
repudiation applies only to bilateral contracts "that
are still executory on both sides, " not to unilateral
contracts. (ECF #16 at 11). Stated simply, an anticipatory
repudiation of a unilateral contract gives rise to no
breach-of-contract claims; such a claim only accrues when the
obligor's performance finally became due.
Agreements were initially bilateral contracts. Mr. Glenn
asserts that he fully performed his end of the Agreements no
later than 2007. He argues that this full performance
converted the bilateral contracts to unilateral
obligations/contracts-all that remained was for the
defendants to pay him. And because the Agreements were
unilateral in 2010 when the defendants repudiated, neither
that repudiation nor any reaction to it could support a
breach-of-contract claim or trigger the running of the
statute of limitations. Rather, Mr. Glenn argues that because
he had fully performed his end of the bargain, a claim for
breach-of-contract could not accrue until payment was due
under the Agreements. Payment under the Agreements was
conditioned on the defendants' successful recovery on the
2007 judgment, which did not begin to occur until June 2016.
That, Mr. Glenn argues, is when a breach-of-contract action
accrued and the statute of limitations began to run. This
suit, then, is timely.
Mr. Glenn Argues that He Did Not Elect to Treat the
Defendants' Anticipatory ...