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THEC International-Hamdard Cordova Group-Nazari Construction Company, Ltd. v. Cohen Mohr, LLP

United States District Court, District of Columbia

March 16, 2018

COHEN MOHR, LLP, et al., Defendants.



         This matter is before the Court on the plaintiffs' Motion to Vacate Judgment Pursuant to Fed.R.Civ.P. 60(b)(6) (“Pls.' Mot.”), ECF No. 44, which seeks to vacate the Court's dismissal of the above-captioned matter pursuant to the plaintiffs' notice of voluntary dismissal and to instead dismiss this case for lack of subject-matter jurisdiction, see generally Pls.' Mot. at 1; Defendant Cohen Mohr LLP's Motion for Leave to File a Sur-Reply (“Cohen Mohr's Mot.”), ECF No. 50; the Motion of Defendants Abdul Hadi Rakin and THEC International Corporation for Leave to File a Sur-Reply (“Rakin & THEC's Mot.”), ECF No. 51; and the Plaintiffs' Motion for Sanctions (“Pls.' Sanctions Mot.”), ECF No. 57. Upon careful consideration of the parties' submissions, [1] the Court concludes for the reasons set forth below that it must deny the defendants' motions for leave to file sur-replies, deny the plaintiffs' motion to vacate the judgment the Court previously entered in this matter, and deny the plaintiffs' motion for sanctions.

         I. BACKGROUND

         On November 3, 2015, the plaintiffs, THEC International-Hamdard Cordova Group-Nazari Construction Company, Ltd. Joint Venture (“THN Joint Venture”), the Hamdard Cordova Group (the “Hamdard Group”), and the Nazari Construction Company, Ltd. (the “Nazari Company”), initiated this cause of action against two of the named defendants, Cohen Mohr, LLP (“Cohen Mohr”) and Abdul Hadi Rakin (“Rakin”), asserting multiple common law claims based on an alleged diversion of an approximate $3.6 million payment that the plaintiffs purportedly earned for services performed in conjunction with a road construction project in Afghanistan. See Complaint for Fraud[, ] Conversion[, ] Civil Conspiracy[, ] Negligence[, ] Tortious Interference With the Contract[, and] Breach of Fiduciary Duty (“Compl.”) at 1, ECF No. 2; see also Pls.' Mot. at 1. Later, the plaintiffs amended their Complaint in part to name the THEC International Corporation (“THEC”), a company owned by Rakin, see Pls.' Mem. at 1-2, as an additional defendant and to assert, among others allegations, additional claims of conversion, breach of fiduciary duty, and breach of contract, see First Amended Complaint for Declaratory Judgment, Conversion, Breach of Fiduciary Duty, Breach of Contract, Tortious Interference with Contract, Civil Conspiracy, Breach of the Standard of Care, and Breach of the Standard of Conduct (“Am. Compl.”) at 1, ECF No. 18.

         Thereafter, each defendant moved to dismiss the plaintiffs' Amended Complaint on both jurisdictional and procedural grounds. See generally Defendant Abdul Hadi Rakin's Motion to Dismiss (“Rakin's Mot.”), ECF No. 21; defendant Cohen Mohr LLP's Motion to Dismiss Amended Complaint and Memorandum of Points and Authorities in Support Thereof (“Cohen's Mot.”), ECF No. 23; Defendant THEC International Corporation's Motion to Dismiss (“THEC's Mot.”), ECF No. 34. Specifically, the defendants argued that the Court lacked subject-matter jurisdiction because the case involved “an entity with Virginia citizenship [ ] suing another entity with Virginia citizenship as well as an individual with a Virginia domicile, ” and “[d]iversity jurisdiction, therefore, di[d] not exist.” See, e.g., Memorandum of Points and Authorities of Defendant Abdul Hadi Rakin in Support of His Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6) (“Rakin's Mem.”) at 12. Consequently, because “the pleadings and the record d[id] not reveal whether complete diversity exist[ed] between the parties, ” Order at 6 (Apr. 29, 2016), ECF No. 37, the Court denied without prejudice each of the defendants' motions to dismiss, see id. at 8-9, and required the parties to conduct jurisdictional discovery “limited to the question of whether complete diversity exist[ed], ” id. at 9. However, before the close of the parties' limited jurisdictional discovery, on June 27, 2016, the plaintiffs filed a notice on the docket, voluntarily dismissing this case without prejudice. See generally Notice of Voluntary Dismissal Pursuant to Fed. R. Civ. P[. ] 41(a)(1)(A)(i) (“Pls.' Dismissal”). The following day, the Court dismissed this matter without prejudice and closed the case. See Minute Order (June 28, 2016).

         Concurrent with the filing of their notice of the voluntary dismissal of this matter, the plaintiffs initiated arbitration proceedings against THEC in the International Court of Arbitration of the International Chamber of Commerce (“ICC”). See Cohen Mohr's Opp'n, Exhibit (“Ex.”) A (International Chamber of Commerce - International Court of Arbitration, Request for Arbitration (“ICC Request for Arbitration”)). In March 2017, the plaintiffs also filed a cause of action against Cohen Mohr in the Superior Court of the District of Columbia (“Superior Court”). See id., Ex. B (The plaintiffs' Complaint in the Superior Court of the District of Columbia (“Superior Court Complaint”)). On June 25, 2017, “the ICC proceedings were dismissed for lack of jurisdiction . . . [, and] the Tribunal awarded THEC almost 100% of its fees and costs incurred in the arbitration.” Rakin & THEC's Opp'n at 4; see also id., Ex. 2 (ICC International Court of Arbitration, Case No. 22065/RD/MK (“ICC Arbitration Award”)) at 35 (ordering the plaintiffs to pay THEC $87, 558.79 in legal costs related to the arbitration proceedings). In the Superior Court proceedings, defendant Cohen Mohr filed a motion seeking costs and a stay of those proceedings under Superior Court Local Rule 41(d)[2] “[b]ecause the Superior Court Action alleged the same wrongs and injury as [the voluntarily dismissed] federal court action, . . . [and] Rule 41(d) . . . warranted relief.” Cohen Opp'n at 3. On June 29, 2017, the Superior Court issued an order, ruling that “[s]hould [Cohen Mohr] move for an assessment of costs under Rule 41(d), [the p]laintiffs may then present their positions as to the suitability of awarding such costs to [Cohen Mohr].” Id., Ex. F (Order of the Superior Court of the District of Columbia) (June 29, 2017) (“Superior Court Order”)), at 4.[3] That same day, the plaintiffs filed their motion in this Court to vacate their voluntary dismissal of this matter. See Pls.' Mot. at 1. The following day, on June 30, 2017, defendant Cohen Mohr filed its motion for costs and to stay the litigation in the Superior Court proceedings. See Pls.' Status Update, Ex. 1 (Omnibus Order of the Superior Court of the District of Columbia) (Aug. 31, 2017) at 2.

         After briefing of the plaintiffs' motion to vacate was completed, each defendant requested that this Court permit them to file sur-replies given their shared position that the plaintiffs' replies to their oppositions raised new arguments. See, e.g., Cohen Mohr's Sur-Reply Mot. at 1. On September 6, 2017, the plaintiffs filed on the docket a status update, indicating that on August 31, 2017, the Superior Court denied defendant Cohen Mohr's motion for costs and to stay that litigation. See Pls.' Status Update, Ex. 1 (Omnibus Order of the Superior Court of the District of Columbia) at 16. The plaintiffs also reiterated in their status update their request for relief under Rule 60(b)(6), contending that the ICC's “dismissal of the [plaintiffs] arbitration creates a new, additional imperative for the Court to vacate the voluntary dismissal and substitute an Order of Dismissal noting its ab initio lack of subject[-]matter jurisdiction.” See id. at 1 (citation omitted). In addition, on October 26, 2017, the plaintiffs filed a motion for sanctions in this case against the defendants for alleged misconduct, see generally Pls.' Sanctions Mot., which the parties have now fully briefed.


         A. Motion for Leave to File a Sur-Reply

         A court will grant a motion for leave to file a sur-reply if “the party making the motion would be unable to contest matters presented to the court for the first time in the opposing party's reply.” Lewis v. Rumsfeld, 154 F.Supp.2d 56, 61 (D.D.C. 2001), remanded on other grounds, No. 01-5296, 2003 WL 21018861 (D.C. Cir. Apr. 30, 2003) (per curiam); see also Ben-Kotel v. Howard Univ., 319 F.3d 532, 536 (D.C. Cir. 2003) (quoting Lewis, 154 F.Supp.2d at 61). Although “sur[-]replies are generally disfavored, ” Kifafi v. Hilton Hotels Ret. Plan, 736 F.Supp.2d 64, 69 (D.D.C. 2010), aff'd, 701 F.3d 718 (D.C. Cir. 2012), “[t]he decision to grant or deny leave to file a sur-reply is committed to the sound discretion of the Court, ” Ying Qing Lu v. Lezell, 45 F.Supp.3d 86, 91 (D.D.C. 2014). If new arguments appear for the first time in a movant's reply, granting leave to file a sur-reply is appropriate. See Flynn v. Veazey Constr. Corp., 310 F.Supp.2d 186, 189 (D.D.C. 2004). But, such arguments “must be truly new.” United States ex rel. Pogue v. Diabetes Treatment Ctrs. of Am., Inc., 238 F.Supp.2d 270, 277 (D.D.C. 2002). “Simply put, a sur[-]reply is not a vehicle for rehashing arguments that have already been raised and briefed by the parties. Were that not true, briefing would become an endless pursuit.” Crummey v. Soc. Sec. Admin., 794 F.Supp.2d 46, 63 (D.D.C. 2011), aff'd, No. 11-5231, 2012 WL 556317 (D.C. Cir. Feb. 6, 2012).

         B. Motion to Vacate Judgement

         Federal Rule of Civil Procedure 60(b)(6) “grants federal courts broad authority to relieve a party from a final judgment ‘upon such terms as are just.'” Salazar ex rel. Salazar v. District of Columbia, 633 F.3d 1110, 1116 (D.C. Cir. 2011) (quoting Liljeberg v. Health Servs. Acquisition Corp., 486 U.S. 847, 863 (1988)); see also Fed.R.Civ.P. 60(b)(6) (permitting courts to “relieve a party . . . from a final judgment, order, or proceeding” for “any other reason that justifies relief”). Although district courts “enjoy[] a large measure of discretion in deciding whether to grant or deny a [Rule] 60(b)[(6)] motion, ” Randall v. Merrill Lynch, 820 F.2d 1317, 1320 (D.C. Cir. 1987), the Supreme Court has held that Rule 60(b)(6) applies only in “extraordinary” circumstances, see Ackermann v. United States, 340 U.S. 193, 202 (1950), and this Circuit has cautioned that Rule 60(b)(6) “should be only sparingly used, ” Twelve John Does v. District of Columbia, 841 F.2d 1133, 1140 (D.C. Cir. 1988) (quoting Good Luck Nursing Home, Inc. v. Harris, 636 F.2d 572, 577 (D.C. Cir. 1980)). “In short, plaintiffs must clear a very high bar to obtain relief under Rule 60(b)(6).” Kramer v. Gates, 481 F.3d 788, 792 (D.C. Cir. 2007).

         C. Motion for Sanctions

         Under “[Federal Civil Procedure] Rule 11[, ] sanctions may be imposed where a party files a pleading, motion[, ] or other paper with the court for an improper purpose, that is unwarranted by existing law, [ ] that is lacking evidentiary support, ” Henok v. Chase Home Fin., LLC, 926 F.Supp.2d 100, 104 (D.D.C. 2013) (citing Fed.R.Civ.P. 11(b)(1)-(3)), or that is not “reasonably based on belief or a lack of information, ” Fed.R.Civ.P. 11(b)(4). “Rule 11 sanctions are an extreme punishment for filing pleadings that frustrate judicial proceedings.” Brown v. FBI, 873 F.Supp.2d 388, 408 (D.D.C. 2012) (quoting Wasserman v. Rodacker, No. 06-1005 (RWR), 2007 WL 2071649, at *7 (D.D.C. July 18, 2007)). Although “‘the district court is accorded wide discretion' in determining whether sanctions are appropriate, ” Gomez v. Aragon, 705 F.Supp.2d 21, 23 n.2 (D.D.C. 2010) (quoting Westmoreland v. CBS, Inc., 770 F.2d 1168, 1174 (D.C. Cir. 1985)), the test “under Rule 11 is an objective one: that is, ...

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