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Glenn v. Fay

United States District Court, District of Columbia

December 15, 2017

Jay Glenn, Plaintiff,
Thomas Fortune Fay; Fay Law Group, P.A.; Steven R. Perles; and Perles Law Firm, P.C. Defendants.



         Before the Court are the following motions and all responses and replies thereto:

• 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.


         Defendants 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.

         In 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 Agreement").

         By all 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)).

         Despite 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 venue grounds.

         Six 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 grounds.

         Summary of the Parties' Arguments; Motions to Dismiss

         I. The Defendants' Arguments

         A. The Defendants Argue that Mr. Glenn's Claims Are Time-Barred.

         The 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.

         The 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.

         In 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.

         B. Fay Law Group Argues that It Cannot Be Held Liable for the Acts of Fay & Perles.

         One of 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.

         II. The Plaintiffs Arguments

         A. Mr. Glenn Argues that His Claims Are Not Time-Barred.

         In 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.

         1. Mr. Glenn Argues that the Doctrine of Anticipatory Repudiation Does Not Apply to this Case.

         Mr. 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.

         The 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.

         2. Mr. Glenn Argues that He Did Not Elect to Treat the Defendants' Anticipatory ...

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