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Capitol Services Management v. Vesta Corp.

United States District Court, District of Columbia

July 25, 2018

CAPITOL SERVICES MANAGEMENT, Plaintiff,
v.
VESTA CORPORATION, Defendant.

          MEMORANDUM OPINION AND ORDER

          Emmet G. Sullivan United States District Judge.

         Plaintiff Capitol Services Management, Inc. (“CSMI”) brings suit against Defendant VESTA Corporation (“Vesta”) for: (1) intentional interference with business relations; and (2) tortious interference with a reasonable expectation of prospective economic advantage. CSMI alleges that Vesta interfered with its contract to manage an apartment property in the District of Columbia, causing CSMI to lose the contract. Pending before the Court is Vesta's motion to dismiss the complaint. See ECF No. 6. Upon consideration of the motion, the response and reply thereto, and the relevant law, the Court GRANTS Vesta's motion and DISMISSES CSMI's complaint.

         I. Background

         CSMI is a property management corporation located in the District of Columbia. Compl., ECF No. 1 ¶ 3. Vesta is a property management corporation located in Connecticut. Id. ¶ 4. At different times, both corporations managed the Park Southern Apartments, an apartment property located in Southeast District of Columbia. Id. ¶¶ 3, 8, 9. This property was owned by the Park Southern Neighborhood Corporation (“PSNC”) under a Deed of Trust with the District of Columbia, “acting by and through DHCD [the District of Columbia Department of Housing and Community Development].” Id. ¶ 5. The Deed of Trust stated that PSNC was indebted to the District of Columbia for over three million dollars. Id. ¶ 6. The Deed of Trust required PSNC to repay the debt with interest and perform certain duties. Id. ¶ 7.

         PSNC contracted with Vesta to manage the Park Southern Apartments. Id. ¶ 8. However, on March 17, 2014, PSNC terminated the contract because it was “not satisfied” with Vesta's services. Id. The same day, PSNC entered into an “exclusive” management agreement with CSMI. Id. ¶¶ 9, 10. Pursuant to that agreement, CSMI was to manage the Park Southern Apartment for a year with the option to continue the contract on a year-to-year basis thereafter. Id. ¶ 10. If the contract was terminated without cause within the first year, CSMI would be entitled to the compensation owed for the time remaining under the contract. Id. ¶ 12.

         Less than a month after PSNC entered into the management contract with CSMI, DHCD sent PSNC a “notice of default” and gave PSNC a month to cure the default. Id. ¶ 26. When PSNC did not cure the default by May 2, 2014, DHCD “implemented the default process.”[1] Id. ¶ 27. The same day, DHCD entered into an “emergency contract” with Vesta to manage the Park Southern Apartments. Id. ¶ 28. The emergency contract “authorized Vesta to take over the management of the Park Southern Apartments on May 3, 2014 without any notice of termination to CSMI.” Id. ¶ 29.

         CSMI alleges that Vesta knew about its business relationship and contractual expectancy, yet interfered with its management agreement. See Id. ¶¶ 36-51. CSMI alleges that Vesta had been in frequent communication with DHCD regarding DHCD's “intention to default” PSNC and remove CSMI as property manager. Id. ¶ 14; see also Id. ¶¶ 15-25. According to CSMI, Vesta told DHCD that it “was going to continue to manage the property and to provide (DHCD) whatever assistance we need with respect to the ongoing condition of the property, ” despite having been terminated by PSNC. Id. ¶¶ 16, 41. CSMI alleges that “its relationship with PSNC was broken and CSMI lost any income it should have received for its management services” as a “direct and proximate result of Vesta performing the management contract.” Id. ¶ 45. CSMI requests $100, 000 in compensatory and economic damages, as well as punitive damages. Id. ¶¶ 45, 51.

         II. Standard of Review

         A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of a complaint. Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002). To survive a motion to dismiss, a complaint “must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotations and citations omitted). A claim is facially plausible when the facts pled in the complaint allow the court to “draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. The standard does not amount to a “probability requirement, ” but it does require more than a “sheer possibility that a defendant has acted unlawfully.” Id.

         “[W]hen ruling on a defendant's motion to dismiss [pursuant to Rule 12(b)(6)], a judge must accept as true all of the factual allegations contained in the complaint.” Atherton v. D.C. Office of the Mayor, 567 F.3d 672, 681 (D.C. Cir. 2009) (internal quotations and citations omitted). In addition, the court must give the plaintiff the “benefit of all inferences that can be derived from the facts alleged.” Kowal v. MCI Commc'ns Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994). Even so, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements” are not sufficient to state a claim. Iqbal, 556 U.S. at 678.

         III. Analysis

         Vesta moves to dismiss CSMI's complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). See Def.'s Mot., ECF No. 6. It makes three arguments: (1) CSMI's complaint must be dismissed as time-barred; (2) CSMI is collaterally estopped from bringing its case against Vesta because the same issues were already litigated against the District of Columbia in the Superior Court of the District of Columbia;[2] and (3) CSMI's complaint must be dismissed because it fails to state claims of tortious interference. See Id. at 3.[3] Because the Court agrees that CSMI's complaint is time-barred, it need not consider Vesta's additional arguments.

         A. CSMI's Claims are Time-Barred

         Vesta argues that CSMI was aware of its alleged tortious actions on May 3, 2014-the date that DHCD took control of the Park Southern Apartments and contracted with Vesta, thereby terminating CSMI's contract. Def.'s Mot., ECF No. 6 at 5-7. Because the statute of limitations for tortious interference claims is three years under District of Columbia law, Vesta contends that ...


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