United States District Court, District of Columbia
A. HOWELL CHIEF JUDGE.
plaintiff, Bazarian International Financial Associates, LLC,
sued the defendants, Desarrollos Hotelco, C.A.
(“Hotelco C.A.”), Desarrollos Hotelco Corporation
DHC Aruba, N.V. (“DHC”), and Desarrollos Hotelco
Corporation Curacao Holding, N.V. (“Hotelco
Curacao”), after the defendants refused to pay the
plaintiff for investment banking services provided in
anticipation of developing Aruba's beachfront Ritz
Carlton hotel. Following a five-day trial, a jury found that
Hotelco C.A. had breached its written agreement with, and
consequently awarded $2, 200, 000 in damages to, the
plaintiff. DHC and Hotelco Curacao also were found liable as
alter egos of Hotelco C.A. and as its successors in interest.
parties have filed several post-trial motions. First, DHC and
Hotelco Curacao seek judgment as a matter of law, or
alternatively a new trial, repeating arguments made
unsuccessfully pre-trial that neither is Hotelco C.A.'s
alter ego or its successor in interest. Defs.' Renewed
Mot. JMOL or New Trial (“Defs.' Mot. JMOL”),
ECF No. 136. Second, all three defendants seek remittitur of
the jury's damages award. Defs.' Mot. Remittitur or
New Trial (“Defs.' Mot. Rem.”), ECF No. 137.
Finally, the plaintiff seeks prejudgment and post-judgment
interest on the jury's damages award as well as
reasonable attorneys' fees, costs, and expenses. See
Pl.'s Mot. Interest & Fees (“Pl.'s
Mot.”), ECF No. 134.
reasons explained below, both co-defendants' motions are
denied because the defendants have failed to show that the
trial evidence did not permit the jury's verdict as to
alter-ego or successor-in-interest liability or that the
jury's damages award is beyond all reason. Further, the
plaintiff's fee motion is granted because the plaintiff
is entitled to prejudgment interest under District of
Columbia law, post-judgment interest under federal law, and
attorneys' fees, costs, and expenses under the terms of
the parties' contract.
below is the relevant procedural and factual background.
Dismissal of Plaintiff's 2009 Complaint
litigation dates to 2009, when the plaintiff sought a
declaratory judgment to establish its right to payment under
an agreement, dated February 5, 2007 (“the
Agreement”), executed with Desarrollos Aerohotelco,
C.A. (“Aerohotelco”). Compl., Bazarian Int'l
Fin. Assocs., LLC v. Desarrollos Aerohotelco, C.A., Civ.
No. 09-1764 (D.D.C. Sept. 17, 2009), ECF No. 1. Under
the Agreement, the plaintiff was to provide financial
services to Aerohotelco, in exchange for a “debt fee,
” as Aerohotelco built Aruba's Ritz Carlton hotel.
That initial complaint was dismissed, without prejudice,
because no justiciable controversy had yet arisen. Bazarian
Int'l Fin. Assocs., L.L.C. v. Desarrollos
Aerohotelco, C.A., 793 F.Supp.2d 124, 125 (D.D.C. 2011)
Plaintiff's 2013 Complaint
second iteration of this matter dates to 2013, when the
plaintiff again sued Aerohotelco, asserting that Aerohotelco
had breached the Agreement and been unjustly enriched by
receiving, but failing to pay for, plaintiff's services.
Compl. at ¶¶ 30-47. The amended operative version
of that complaint added several defendants, all affiliated
with Aerohotelco, including DHC and Hotelco Curacao. Am.
Compl., ECF No. 13. Following a motion under Rule 12(b)(6),
the claim for unjust enrichment was dismissed. Order, ECF No.
36. The breach-of-contract claim, however, survived against
not only Aerohotelco but also against its affiliated
enterprises, including DHC and Hotelco Curacao, because the
Amended Complaint plausibly alleged each was an alter ego of
Aerohotelco. Bazarian Int'l Fin. Assocs., L.L.C. v.
Desarrollos Aerohotelco, C.A., 168 F.Supp.3d 1, 22-24
(D.D.C. 2016) (“Bazarian II”). The role of Walter
Stipa, Aerohotelco's President and the Agreement's
signatory, Id. at 5, factored heavily in that
conclusion, Id. at 23. Stipa allegedly had a
prominent role with each defendant-enterprise, serving as the
president of some, a representative of others, and an owner
or part-owner of all. Id. Moreover, the Amended
Complaint alleged that Aerohotelco had freely transferred a
valuable asset between defendants. Id. at 24. The
alter-ego ruling obviated the need to consider the
plaintiff's alternative successor-liability argument.
Id. at 22 n.8. Thus, the breach-of-contract claim
continued to trial.
anticipation of trial, the defendants filed two motions
in limine. The first sought exclusion of testimony from
the plaintiff's expert on hotel financing, William
Clover. See Defs.' Mot. Lim. Expert, ECF No. 65. The
second sought to preclude references to the defendants'
foreign status. See Defs.' Mot. Lim. Foreign Status, ECF
No. 67. The first motion was granted only in part and Clover
was allowed to testify about industry standards and
understandings regarding certain documentation used in hotel
financing and the meaning of certain terms, including
“structuring” and “commitments.” See
Order, ECF No. 104. The second motion also was granted in
part, prohibiting unfairly prejudicial references to the
defendant-entities' foreign status. See Order, ECF No.
Evidence at Trial
five-day trial, the plaintiff presented the testimony of
seven witnesses: Carl Bazarian, the plaintiff's President
and Owner; Stipa; Willem Broekaart, a Vice President of
Corporate Finance for the Aruba Investment Bank
(“AIB”); Frendsel Giel, the Managing Director of
AIB; Pedro Vera, a representative of the various
defendant-entities; Gregory Zorella, the plaintiff's
employee from 2004-2016; and Clover, the plaintiff's
expert. The testimony of Stipa, Broekaart, and Giel was in
the form of their pre-trial depositions, with most objections
resolved pre-trial. See Min. Orders (May 2, 2018) (ruling on
the parties' objections to designations in deposition
transcripts of Giel, Stipa and Broekaart, respectively). The
defendants presented a single witness: William Nicholson, an
expert in real estate brokering, financing, and investing.
The plaintiff introduced 93 exhibits into evidence, see
Exhibit Log, ECF No. 121, and the defendants introduced 17,
see Exhibit Log, ECF No. 122. Relevant to the now-pending
motions, the evidence at trial revealed the following facts.
2003, the Aruban government inquired of the plaintiff's
interest in bringing a Ritz Carlton hotel to the island,
based on the plaintiff's specialty in developing resorts
in underdeveloped parts of the world. Day 1 PM at
11:7-12:14. The plaintiff was interested and as a
result purchased the exclusive option to develop the hotel.
Id. at 12:15-25; Day 2 AM at 41:9- 15. While holding
that option, the plaintiff prepared a market study and worked
with Scotiabank and the AIB to secure financing. Day 1 PM at
the end of 2006, Bazarian met Stipa, who was introduced as
someone who had experience financing and constructing hotels,
for the first time. Id. at 20:17-21, 23:5-24:16.
Barzarian and Stipa, and their respective business partners,
Zorella and Vera, emailed about financing the potential hotel
as 2006 came to a close. Id. at 25:16-27:16.
Ultimately, the plaintiff could not arrange financing needed
to begin development and, in 2006, let the exclusive option
expire. Id. at 13:1-14:21, 27:11-19; Day 2 AM at
the plaintiff's relinquishment of the option, Aruba's
government remained interested in opening a Ritz Carlton and
to this end, in February 2007, requested proposals for the
right to develop the luxury hotel. Pl.'s Trial Ex. 18;
see also Day 1 PM at 27:21-28:4. Stipa, on behalf of
Aerohotelco, contacted Bazarian about the request for
proposals (“RFP”) because Bazarian, on behalf of
the plaintiff, already had commissioned studies relevant to
building the beachfront hotel. Day 1 PM at 31:8-19.
Aerohotelco intended to bid, and on February 5, 2007, the
plaintiff executed the Agreement with Aerohotelco
“and/or its successor companies or any related entities
which intend to invest in and/or develop the Project.”
Pl. Trial Ex. 17 at preamble. Under the Agreement, the
plaintiff would “perform exclusive investment banking
services in connection with [the] RFP process and development
of a luxury hotel … on the island of Aruba.”
Id. § 1. Among other forms of compensation, the
plaintiff was slated to receive a debt fee “[u]pon the
settlement of binding loan and/or guarantee commitments for
the Project obtained directly or indirectly by Bazarian
International, ” the amount of which would be “a
flat two percent (2%) of the gross amount of the debt fee
financing provided to the Project, net of VAT and all
wiring/bank fees, except for Scotiabank at one percent (1%)
of the gross amount of debt financing.” Id.
§ 2.C. The debt fee would be paid “upon the
earlier of the first drawdown of funds and/or first infusion
of equity capital, provided that financing has been committed
to the Project as a result of the efforts of Bazarian
International.” Id. § 2.D.
signed the Agreement on behalf of the plaintiff and Stipa
signed on behalf of Aerohotelco. Id. at 5; see also
Day 2 AM at 125:14-17. Though Stipa entered the agreement on
behalf of Aerohotelco, Aerohotelco was a Venezuelan company
and Stipa testified that he was aware that if
Aerohotelco's bid succeeded, “it would have to be a
company in Aruba” that held the option on the
beachfront property. Day 2 AM at 123:25-124:6. Vera, who
worked alongside Stipa in negotiating the Agreement on behalf
of Aerohotelco, also knew at the time of executing the
Agreement that should Aerohotelco's bid prevail
Aerohotelco would need to structure an Aruban entity to
receive the leasehold. Day 3 PM at 52:19-53:11; Day 4 AM at
25:22-26:4. At his deposition, Stipa was asked, “[D]id
you intend for, at the time you signed [the Agreement], if
the project were successful, for that Aruban entity to also
be bound by this agreement?” Day 2 AM at 124:16-19.
Stipa answered: “Of course.” Id. at
between the formation of the Agreement and the end of March
2007, Aerohotelco merged into Hotelco C.A. See Joint
Stipulation Regarding Substitution and Voluntary Dismissal of
Parties at 1, ECF No. 55. The parties agree that Hotelco C.A.
is Aerohotelco's successor in interest and assumed all
Aerohotelco's liabilities under the Agreement.
Id. at 1-2. Stipa and his family were Hotelco
C.A.'s largest shareholders. Day 3 PM at 80:10-16.
Bazarian and Zorella introduced Stipa and Vera to
representatives from AIB, including Giel and Broekhart. Day 1
PM at 74:20-78:22; Day 2 PM at 91:5-92:15; Day 3 AM at
93:16-18; Day 3 PM at 18:6-15; Day 4 PM at 15:13-16:3.
Bazarian and Broekhart each recalled that during the initial
introduction, Broekhart, representing AIB, expressed interest
in serving as a syndicate arranger for Hotelco C.A.'s
funders. Day 1 PM at 78:23-79:8; Day 3 AM at 35:12-19.
According to Bazarian and Zorella, after the meeting, the
plaintiff did all the due diligence for AIB as the bank
prepared an indicative term sheet, and the plaintiff
ultimately secured an indicative term sheet from AIB for the
defendants. Day 1 PM at 48:6-49:14, 69:23- 70:2, 71:6-16,
74:4-14, 80:16-81:14; Day 4 AM at 93:16-24; Pl.'s Trial
Exs. 25, 26, 27. AIB's indicative term sheet was then
included in the proposal that Stipa submitted to the Aruba
government, in March 2007, on behalf of Hotelco C.A. for the
right to develop the luxury hotel. Day 1 PM at 48:6-21,
85:6-21; see also Pl.'s Trial Ex. 35.
Hotelco C.A's proposal was pending, the plaintiff
remained a conduit from AIB to Stipa and Vera, pushing for
AIB's inclusion as a financier or syndicate arranger for
the hotel. Day 1 PM at 86:10-18, 87:7-88:1, 89:20-90:10; Day
2 AM at 73:22-74:7; Day 4 AM at 95:3- 23; Day 4 PM at
69:10-23; see also Pl.'s Trial Ex. 34. AIB maintained
regular communication with the plaintiff. Day 1 PM at
96:8-15, 103:10-15; Day 3 AM at 18:23-19:11, 24:10-14;
Pl.'s Trial Exs. 43, 44, 45, 46.
2008, Aruba issued a letter of intent selecting Hotelco
C.A.'s bid for the beachfront hotel and offering Hotel
C.A. an exclusive right to the leasehold. Day 3 PM at
49:22-50:24; see also Pl.'s Trial Ex. 65. As expected,
the letter of intent instructed Hotelco C.A. “to
structure and incorporate a local company … to hold
the option right and lease hold.” Pl.'s Trial Ex 65
at 1; see also Day 1 PM at 111:6-21. Within three months,
Vera had incorporated DHC in Aruba for purposes of
transferring the leasehold. Day 2 AM at 124:3-9; Day 3 PM at
48:19-49:16, 53:12-54:4. Hotel Curacao was incorporated two
weeks later. Day 3 PM at 49:11-16. DHC was wholly owned by a
non-defendant holding company, which was itself wholly owned
by Hotelco Curacao. Id. at 56:16-19, 57:14-20,
58:6-15; see also Pl.'s Trial Ex. 121. Vera acknowledged
that Stipa and his family were the largest shareholders of
DHC and Hotel Curacao, and that Stipa continued to act on
behalf of each defendant. Day 3 PM at 80:17- 81:12; Day 4 AM
at 8:21-10:12; see also Pl.'s Trial Ex. 101 at preamble.
Hotelco C.A., Vera conceded, then transferred the exclusive
right to the leasehold for the beachfront property to DHC at
no cost. Day 3 PM at 50:20-52:2.
21, 2008, Hotelco C.A. and AIB entered into a Syndicate
Management Agreement, pursuant to which AIB would act as
Hotelco C.A.'s syndicate arranger for the hotel's
funders. Pl.'s Trial Ex. 78; see also Day 1 PM at
132:6-15. In August 2008, the defendants, through Stipa,
instructed the plaintiff to cease working on the
defendants' behalf. Day 2 AM at 23:4-23, 26:20-27:1; Day
3 PM at 28:20-29:20; Day 4 PM at 44:19-45:17; see also
Pl.'s Trial Ex. 87. Still, as AIB began its work as the
syndicate arranger, the bank continued soliciting and
receiving support from the plaintiff. Day 1 PM at 112:7-12,
114:1-9; Day 2 AM at 23:17-23, 82:5-83:18; Day 4 PM at
27:10-25; see also Pl.'s Trial Ex. 86.
October 26, 2009, DHC and Hotelco Curacao, but not Hotelco
C.A., entered into a Facility Agreement with a syndicate of
seven lenders. Pl.'s Trial Ex. 99; see also Day 3 PM at
63:1-11, 72:19-21. The Facility Agreement permitted DHC and
Hotel Curacao to borrow up to $110, 000, 000. Day 3 PM at
60:6-62:15; see also Pl.'s Trial Ex. 99 at 1. AIB,
according to Broekhart, was instrumental in negotiating that
agreement. Day 3 AM at 65:20-66:2. From the money lent
through the Facility Agreement, Vera explained, just under
$16.5 million went to Hotel Curacao and just over $93.5
million went to DHC. Day 3 PM at 63:12-24, 69:14-72:1; see
also Pl.'s Trial Exs. 107, 108. The money was disbursed
in stages. The first drawdown was for $78.5 million, and
occurred in early 2013, Day 3 PM at 78:25-80:1, while the
remainder was disbursed in 2014 after the hotel was in
operation, Id. at 61:5-12.
following year, Stipa entered into a shareholders'
agreement that disbursed shares of Hotelco Curacao and listed
Stipa as the representative of Hotelco C.A., DHC, and Hotelco
Curacao. Pl.'s Trial Ex. 101 at preamble. That agreement
also noted that each entity was “directly or indirectly
fully owned by or related to Stipa.” Id.
Ritz Carlton Aruba opened in 2013. Day 3 PM at 79:9-11.
Hotelco C.A. and the affiliated enterprises, however, failed
to make any payment owed to the plaintiff. Day 2 AM at
the plaintiff's presentation of its case, DHC and Hotel
Curacao moved for judgment as a matter of law, under Federal
Rule of Civil Procedure 50(a), on grounds that neither was
liable as an alter-ego of or successor-in-interest to Hotelco
C.A. Day 5 AM at 16:24-17:11. That motion was denied.
Id. at 35:18-37:18. The case then went to the jury,
which returned a verdict in the plaintiff's favor.
Verdict Form, ECF No. 125. The jury found that Hotelco C.A.
breached the Agreement and awarded the plaintiff $2.2 million
in damages. Id. The jury also found that DHC and
Hotelco Curacao were both alter egos of and successors in
interest to Hotelco C.A. Id. at 2.
Pending Post-Trial Motions
DHC and Hotelco Curacao again seek judgment as a matter of
law, repeating that neither can be found liable as either
Hotelco C.A.'s alter ego or as successors in interest.
Additionally, all three defendants insist that the jury's
damage award is unreasonably high. Separately, the plaintiff,
as the prevailing party, seeks prejudgment and post-judgment
interest on the jury's award, as well as reimbursements
for reasonable fees, costs, and expenses incurred while
litigating this matter. Each of these motions is ready for
Federal Rule of Civil Procedure 50(b)
Rule of Civil Procedure 50(a) authorizes a court, once a
party has been fully heard on an issue, to enter judgment as
a matter of law if “a reasonable jury would not have a
legally sufficient evidentiary basis to find for the party on
that issue.” Fed.R.Civ.P. 50(a). If a Rule 50(a) motion
is denied, the moving party may renew the motion within 28
days of the entry of judgment. Fed.R.Civ.P. 50(b). A
defendant seeking relief from a jury verdict through Rule 50
must satisfy an exceedingly demanding standard.
“Judgment as a matter of law is appropriate only if the
evidence and all reasonable inferences that can be drawn
therefrom are so one-sided that reasonable men and women
could not have reached a verdict in plaintiff's
favor.” Campbell v. District of Columbia, 894
F.3d 281, 286 (D.C. Cir. 2018) (citations omitted).
“[A]lthough the court should review the record as a
whole, it must disregard all evidence favorable to the moving
party that the jury is not required to believe. That is, the
court should give credence to the evidence favoring the
nonmovant as well as that evidence supporting the moving
party that is uncontradicted and unimpeached, at least to the
extent that that evidence comes from disinterested
witnesses.” Reeves v. Sanderson Plumbing Prod.,
Inc., 530 U.S. 133, 150-51 (2000) (citations omitted).
Federal Rule of Civil Procedure 59(a)
jury trial, a court may, upon the motion of a party, grant a
new trial “for any reason for which a new trial has
heretofore been granted in an action at law in federal
court.” Fed.R.Civ.P. 59(a)(1)(A). Other circuits have
given meaning to this less than pellucid standard, ruling
that a new trial is “warranted when a jury has reached
a ‘seriously erroneous' result as evidenced by: (1)
the verdict being against the weight of the evidence; (2) the
damages being excessive; or (3) the trial being unfair to the
moving party in some fashion, i.e., the proceedings being
influenced by prejudice or bias.” E.E.O.C. v. New
Breed Logistics, 783 F.3d 1057, 1066 (6th Cir. 2015)
(citations omitted); see also Venson v. Altamirano,
749 F.3d 641, 656 (7th Cir. 2014) (“A new trial is
appropriate if the jury's verdict is against the manifest
weight of the evidence or if the trial was in some way unfair
to the moving party.”).Whether to grant a motion for a
new trial is “entrusted to the sound discretion of the
trial court.” Grogan v. Gen. Maint. Serv. Co.,
763 F.2d 444, 447 (D.C. Cir. 1985).
DHC and Hotelco Curacao have moved for judgment as a matter
of law, arguing that the trial evidence does not support the
jury's verdict that each is an alter ego of, and
successor in interest to, Hotelco C.A. Additionally, all
three defendants urge that the jury's damages award is
excessive and ask for remittitur or a new trial.
Independently, the plaintiff, as the prevailing party, seeks
prejudgment and post-judgment interest on the jury's
damages award, as well as reimbursement for reasonable fees,
costs, and expenses. The respective arguments are taken in
Trial Evidence Support Jury Verdict that DHC and Hotelco
Curacao are Alter Egos of Hotelco C.A.
default principle, “a corporation is regarded as an
entity separate and distinct from its shareholders.”
Estate of Raleigh v. Mitchell, 947 A.2d 464, 469
(D.C. 2008) (citations omitted). “Courts apply the
‘alter ego' theory to cast aside the corporate
shield and fasten liability on the individual shareholder,
” however, “when substantial ownership of
corporate stock is concentrated in one person or a few
persons and other factors support disregarding the corporate
entity in the interest of equity and fairness.”
Id. at 470 (citations and internal quotation marks
omitted). Thus, alter ego analysis looks beyond formalism to
a transaction's economic substance. See Vuitch v.
Furr, 482 A.2d 811, 816 n.8 (D.C. 1984) (“[T]he
essential term is to be defined in the act of
operation.” (quoting Berkey v. Third Ave.
R.R., 155 N.E. 58, 61 (N.Y. 1926) (Cardozo, J.)). As
Justice Cardozo explained, and as the D.C. Court of Appeals
has endorsed, an entity may be held liable as another's
alter ego “though agency in any proper sense is
lacking, where the attempted separation between parent and
subsidiary will work a fraud upon the law.”
Berkey, 155 N.E. at 61; accord Vuitch, 482
A.2d at 816 n.8. “At such times, unity is ascribed to
parts which, at least for many purposes, retain an
independent life, for the reason that only thus can we
overcome a perversion of the privilege to do business in a
corporate form.” Berkey, 155 N.E. at 61;
accord Vuitch, 482 A.2d at 816 n.8.
may “pierce the corporate veil upon proof that there is
(1) unity of ownership and interest, and (2) use of the
corporate form to perpetrate fraud or wrong, or other
considerations of justice and equity justify it.”
Mitchell, 947 A.2d at 470 (citations internal
quotation marks omitted). There is neither a “precise
formula by which to predict when courts will pierce the
corporate veil since each case is sui generis, ” nor
“a uniform standard to determine whether the evidence
has sufficiently demonstrated unity of interest and
ownership.” Vuitch, 482 A.2d at 816 (citations
omitted). “[T]he factor which predominates will vary in
each case, . . . influenced by considerations of who should
bear the risk of loss and what degree of legitimacy exists
for those claiming the limited liability protection of a
trial, the parties proposed jury instructions as to alter ego
liability. The defendants objected generally to the
plaintiff's proposal, arguing simply that the proposed
instruction was not “tailored to the facts of this
case.” Joint Pretrial Statement, App. 9, Pl.'s
Proposed Jury Instrs. Defs.' Obj. at 20-21, ECF No.
71-13. At the charging conference, the defendants reiterated
their objection to the proposed alter ego instruction, Day 5
AM at 87:2-93:12, 110:11- 115:2, and this time more
specifically asked that this instruction include a reference
to whether corporate formalities have been disregarded,
consistent with Standard Instruction 406. Day 5 AM at 93:1-8;
114:14-18. The defendants' request was adopted, Day 5 PM
at 2:23-3:2; Jury Instrs. at 5, ECF No. 119. The Court
instructed the jury “[t]o decide whether the Defendants
DHC and Hotelco Curacao are alter egos of Aerohotelco and
Defendant Hotelco C.A., for purposes of liability under the
Agreement, ” by considering “factors such
as”: (1) “[w]hether corporate formalities have
been disregarded;” (2) “whether corporate assets
have been transferred from Aerohotelco or Hotelco, C.A. to
Defendants DHC and/or Hotelco Curacao without payment of fair
market value therefor;” (3) “whether Defendants
DHC and/or Hotelco Curacao were started with inadequate
capital;” (4) “whether Defendants DHC and/or
Hotelco Curacao were used to protect Aerohotelco and/or
Hotelco, C.A., from Plaintiff Bazarian International's
claim;” (5) “the extent to which Defendants DHC
and/or Hotelco Curacao have the same beneficial owners as
Aerohotelco and/or Hotelco, C.A.;” and (6) “the
extent to which Defendants DHC and/or Hotelco Curacao are
controlled by the same dominating beneficial owner as
Aerohotelco and/or Hotelco, C.A.” Jury Instrs. at 5.
defendants do not now contend that the instruction on alter
ego liability improperly stated the law, and thus have waived
that argument. See Defs.' Mot. JMOL at 11-16; Defs.'
Reply Pl.'s Opp'n Defs.' Mot. JMOL
(“Defs.' Reply JMOL”) at 8-12, ECF No. 150.
Instead, the defendants contend that insufficient evidence
supports imputing alter ego liability to DHC and Hotelco
Curacao. Defs.' Mot. JMOL at 11. Contrary to the
defendants' contention, sufficient evidence supports the
jury's finding that DHC and Hotelco Curacao are
“legally responsible for the damages suffered by
Plaintiff as a ...