Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Alemayehu v. Abere

United States District Court, District of Columbia

May 23, 2018

BELAY ABERE, et al., Defendants.




         This Memorandum Opinion addresses whether Federal Rule 19 requires that certain parties be joined to this lawsuit before it may continue, and it evaluates Plaintiff's two remaining summary judgment arguments. The lawsuit arose from a dispute between Plaintiff Neway Alemayehu and Defendants Belay Abere, Bekalu Bayabile, and Iyossias Tilahun regarding their involvement in a Washington, D.C. restaurant venture. During a recent round of briefing, the Court became aware that two of Mr. Abere's counterclaims implicate the contractual rights of two non-parties. Concerned that Rule 19 may require that the non-parties be joined so that they may protect their interests, the Court directed the parties to provide supplemental briefing on the issue. Having reviewed the briefing, the Court concludes that Rule 19 does not require the non-parties to be joined, and it grants in part and denies Mr. Alemayehu's two summary judgment arguments implicated by the Rule 19 issue.


         In March 2016, Mr. Alemayehu filed the complaint initiating this lawsuit. See generally Compl., ECF No. 1. Mr. Abere, in turn, filed a counterclaim against Mr. Alemayehu, triggering the briefing that precipitated the Rule 19 issue. See generally Countercl., ECF No. 4. In his counterclaim, Mr. Abere asserts breach of fiduciary duty and breach of contract claims premised in part on the allegation that Mr. Alemayehu forged Mr. Abere's signature on a settlement agreement (the “Agreement”) with Mr. Abere's sub-tenant, Wilson Concepts, LLC and its proprietor, Garnell Wilson (collectively, the “Wilson Parties”). Countercl. ¶ 30-31. The Agreement allegedly released Mr. Abere's claims against the Wilson Parties arising from the sub-lease. Id.

         Mr. Alemayehu argues that he should be granted summary judgment on these claims because his alleged forgery could not have harmed Mr. Abere. Pl.'s Mot. Dismiss Alt. Summ. J. (“Pl.'s Mot. Summ. J.”) at 8-11, ECF No. 26. According to Mr. Alemayehu, the Agreement was conditioned on Mr. Wilson transferring a liquor license from Wilson Concepts to an LLC created by Mr. Abere, Belayabere Enterprises LLC, and that transfer never occurred. Id. Because a necessary condition of the Agreement was not met, Mr. Alemayehu argues, it never became operative and it did not release Mr. Abere's claims. Id. In other words, Mr. Alemayehu's defense to these particular counterclaims hinges on whether an agreement between Mr. Abere, a party, and the Wilson Parties, non-parties, was fully executed.

         In a prior Memorandum Opinion, the Court recognized the tension created by interpreting an agreement to which a non-party is a signatory. It noted that “the argument advanced by Mr. Alemayehu concerns the enforceability of the Settlement Agreement with Wilson Concepts and Mr. Wilson . . . Yet, those contractual rights are being considered without their participation.” Alemayehu v. Abere, No. 16-0596, 2018 WL 1129661, at *11 (D.D.C. Feb. 26, 2018). Discharging its “independent duty to raise a Rule 19(a) issue sua sponte, ” it declined to address Mr. Alemayehu's summary judgment arguments related to the Agreement and it ordered the parties to provide supplemental briefing explaining whether Rule 19 mandates joinder of the Wilson Parties to this lawsuit. Id. at *10 (quoting Cook v. FDA, 733 F.3d 1, 6 (D.C. Cir. 2013) (internal quotation and alteration omitted)). Having received the parties' supplemental briefing, the Court takes up the issue.

         III. ANALYSIS

         1. Rule 19

         The Court holds that Rule 19 does not require the Wilson Parties to be joined to the litigation. Rule 19 has three provisions that trigger mandatory joinder of a party, but the only relevant provision here requires that “[a] person . . . must be joined as a party if . . . that person claims an interest relating to the subject of the action and is so situated that disposing of the action in the person's absence may, as a practical matter impair or impede the person's ability to protect the interest.” Fed.R.Civ.P. 19(a)(1)(B)(i).0F[1] It is intended to “promote[ ] fair treatment of nonparties in certain circumstances where their interests, and particularly their due process rights, are at risk from litigation between others.” Nanko Shipping, USA v. Alcoa, Inc., 850 F.3d 461, 464 (D.C. Cir. 2017). If a required party cannot be joined, the Court must examine the factors in Rule 19(b) to “determine whether in equity and good conscience, the action should proceed among the parties before it, or should be dismissed, the absent person being regarded as indispensable.” Fed.R.Civ.P. 19(b); see Cherokee Nation of Okla. v. Babbitt, 117 F.3d 1489, 1495-96 (D.C. Cir. 1997). Here, the Court need not proceed to the second step of the Rule 19 analysis because the Wilson Parties are not required parties.

         The parties' sparse briefing on this issue focuses on whether the Court's interpretation of the Agreement would have preclusive effect in subsequent litigation between Mr. Abere and the Wilson Parties. Mr. Alemayehu argues that Rule 19 does not require joinder because “even if [Mr. Alemayehu's] actions were unauthorized and this Court is called upon to determine whether the settlement agreement ever took effect, any such determination would not be binding on the Wilson Parties.” Pl.'s Mem. P. & A. Regarding Joinder ¶ 11, ECF No. 40. Thus, the Wilson Parties “would not be prejudiced and their interests would not be put at risk by any determination in this case that the Agreement never took effect.” Id. ¶ 12. In response, Mr. Abere argues that the “doctrine of collateral estoppel and its potential application are not relevant to the analysis of whether [the Wilson Parties] should be joined as necessary parties.” Def.'s Resp. Pl.'s Mem. P. & A. Regarding Joinder ¶ 3, ECF No. 44 (citing Janney Montgomery Scott, Inc. v. Shepard Niles, Inc., 11 F.3d 399, 409 (3d Cir. 1993)). Both parties oversimplify issue preclusion's role in the analysis, but Mr. Alemayehu's argument is closer to the mark.

         The preclusive effect of this Court's ruling is a relevant factor in its Rule 19 analysis, and it weighs against joining the Wilson Parties here. Mr. Alemayehu correctly asserts that because the Wilson Parties are not participating in this litigation, they are not bound by the Court's decisions and will not be precluded from re-litigating the Agreement. See In re Subpoena Issued to CFTC, 370 F.Supp.2d 201, 206 (D.D.C. 2005). The Third Circuit case Mr. Abere cites in his Opposition Brief aptly describes the point at which issue preclusion triggers Rule 19 joinder: “Mere presentation of an argument that issue preclusion is possible is not enough to trigger Rule 19(a)(2)(i). Rather, it must be shown that some outcome of the federal case that is reasonably likely can preclude the absent party with respect to an issue material to the absent party's rights or duties under standard principles governing the effect of prior judgments.” Janney Montgomery Scott, Inc., 11 F.3d at 409. That threshold is not met here, because the Wilson Parties are not legally impaired from protecting their interests in subsequent litigation.

         The Court's Rule 19 analysis may not stop there; a court may not “proceed without considering the potential effect on nonparties simply because they are not ‘bound' in the technical sense.” Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 110 (1968). Given the opportunity, however, Mr. Abere has not described how, in the absence of legally binding effect, the Court's ruling may otherwise practically impair the Wilson Parties. Further, in this District “Rule 19 does not require joinder merely because a case calls for interpretation of an agreement to which a non-party is a signatory.” Saddler v. AMEC Foster Wheeler Env't & Infrastructure, Inc., 253 F.Supp.3d 210, 218 (D.D.C. 2017) (holding non-party was not a required party even though the case concerned breached duties allegedly created by the non-party's contract with the defendant); see Nanko Shipping, USA, 850 F.3d at 465 (holding non-party signatory to the contract at issue was not a required party because “due process protects [non-party] from being bound”); cf. Huber v. Taylor, 532 F.3d 237, 251 (3d Cir. 2008) (holding that Rule 19 was not triggered where “the outcome of this lawsuit might in some unspecified way have a preclusive effect with respect to some issue material to [the non-parties'] rights in some future lawsuit that may or may not be filed”).

         That reasoning is dispositive here. The Wilson Parties will not be precluded from fully litigating the Agreement in any subsequent lawsuit with Mr. Abere. Mr. Abere has pointed to no other practical impairment the Wilson Parties may face should they not be joined. And the Wilson Parties have no interest in the core subject of this action, the personal dispute between Mr. Alemayehu, Mr. ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.