United States District Court, District of Columbia
Houshang Momenian, et al. Plaintiffs,
Michael M. Davidson, Defendant.
MEMORANDUM OPINION AND ORDER
P. MEHTA UNITED STATES DISTRICT JUDGE.
case returned after the D.C. Circuit vacated this court's
order dismissing as time-barred claims brought by Plaintiffs
Houshang and Vida Momenian and the Houshang Momenian
Revocable Trust. See Momenian v. Davidson, 878 F.3d
381 (D.C. Cir. 2017). The D.C. Circuit instructed
the court on remand to consider Defendant Michael
Davidson's remaining arguments for dismissal of the
Amended Complaint, which the court previously did not
address. See Id. at 391. There are two such
arguments. First, Defendant asserts that the Amended
Complaint lacks any allegation of negligence or wrongdoing by
Defendant. See Def.'s Mot. to Dismiss Am.
Compl., ECF No. 14 [hereinafter Def.'s Mot.]; Mem. of
P&A in Support of Def.'s Mot. [hereinafter Def.'s
Mem.], ECF No. 14-1, at 8-11. And, second, Defendant
maintains that the complaint alleges only that the Trust was
harmed as a result of Defendant's alleged malpractice,
not the Momenians personally, so the Momenians cannot
maintain an action against him. Id. at 12. In
addition, Defendant argues that because he did not represent
the Trust, he therefore owed it no duty. Id. For the
reasons that follow, the court rejects these contentions and
denies Defendant's Motion to Dismiss. 
Defendant's first argument rests on the premise that the
lawsuit Defendant brought on behalf of the Momenians against
their lenders, Paul and Amelia Interdonato, “stood no
chance of winning.” Def.'s Mem. at 9. Defendant
maintains that none of the four transactions the Momenians
claimed that the Interdonatos failed to credit against the
Note Modification Agreement could have been applied to the
Momenians' outstanding indebtedness. Id. at 11
(“Nowhere do the Plaintiffs allege the existence of a
single payment that should have been credited to the
Plaintiffs' Note but was overlooked by [Defendant] . .
.”). Defendant points out that three of the four
claimed credits pre-date the Note Modification Agreement,
under which the Momenians agreed to a sum certain owed to the
Interdonatos on the original Note ($141, 898.47) without
reference to the credits, and thus these could not plausibly
apply to their outstanding debt. Id. at 10. With
respect to the fourth transaction, Defendant argues that it
is implausible that the $50, 000 payment from Fikru to the
Interdonatos on the Fikru Note could be credited to the
Momenians. Id. He also maintains that the alleged
oral agreement between Houshang Momenian and Paul
Interdonato, Pls.'s Am. Compl., ECF No. 13, ¶ 18,
which forms the basis for the claimed credit of $50, 000, was
void under the statute of frauds and therefore could not
reduce the amount owed, see generally Supp. Br. to
Def.'s Mot., ECF No. 27.
arguments have surface appeal. The Note Modification
Agreement, entered into on January 1, 2002,  provides that the
Momenians and the Interdonatos agreed that the “balance
due on said Note  as of the date hereof is agreed to
be [$141, 898.47]” and that “[s]aid balance
represents adjustments and Credits agreed upon by the parties
hereto.” Pls.' Submission in Resp. to Oral Order of
the Court, Exs. ECF No. 26-1 [hereinafter Am. Compl. Exs.],
Ex. 24, at 56. Thus, on its face, the Note
Modification Agreement would appear to make clear that, as of
its effective date, the balance due to the Interdonatos
included all credits pre-dating the Agreement. Therefore, if
the parties had agreed that the proceeds from any of the
first three transactions were credits, those amounts ought to
be subsumed within the sum certain set forth in the Note
Modification Agreement. Moreover, Plaintiffs' allegation
that Houshang Momenian and Mr. Interdonato agreed that the
Fikru Note was additional security against Plaintiffs'
original Note, and not a straightforward debt owed by Fikru
to the Interdonatos, strikes the court as dubious. Indeed,
the Amended Complaint arguably does not even allege a binding
agreement at all. It avers no more than that Houshang
asked Mr. Interdonato to acknowledge the Fikru Note
as additional security and that Mr. Interdonato “orally
agreed to write such a document, but in fact he
never did.” Am. Compl. ¶ 18 (emphasis added). Such
an allegation, at best, supports an inchoate intention to
enter into a written agreement, but not a final, binding one.
See Anchorage-Hynning & Co. v. Moringiello, 697
F.2d 356, 363 (D.C. Cir. 1983) (“District of Columbia
law permits parties to enter into an arrangement obligating
them to prepare and execute a subsequent written contract,
but to achieve enforceability it is necessary that [the]
agreement shall have been expressed on all essential terms
that are to be incorporated in the final document.”)
(cleaned up) (citations omitted).
this case does not concern a contract dispute, but rather
centers on alleged legal malpractice. Therefore, what matters
is Defendant's perception of the Superior Court
suit's likelihood of success, his investigation of the
facts, and the advice he rendered to the Momenians about that
action. On that score, the Amended Complaint, and the
documents referenced therein, render it plausible that
Defendant in fact believed that the suit had merit at the
time he filed it.
the complaint filed in D.C. Superior Court. That pleading not
only alleged that the Interdonatos had not properly credited
the Momenians with the proceeds of the four transactions, it
also attached correspondence between Defendant and Mr.
Interdonato. See Am. Compl. Exs., Ex. 31, at 79-94.
In a letter dated August 14, 2008, Defendant admitted that he
had obtained and reviewed the Note Modification Agreement.
See Id. at 92. He nevertheless insisted that the
Interdonatos had failed to apply the proceeds from the three
transactions pre-dating the Note Modification Agreement and
the $50, 000 payment on the Fikru Note to reduce the
Momenians' remaining amount due on the Note. Id.
at 92-93. Defendant then suggested mediation to Mr.
Interdonato who apparently rebuffed the idea of settling,
id. at 94, prompting Defendant to file suit on
behalf of the Momenians eight months later on August 18,
2009, id. at 84. As this timeline shows, Defendant
had ample opportunity to consider the legal effect of the
Note Modification Agreement before filing suit, and evidently
still concluded that the Momenians' claims of unapplied
credits were “warranted by existing law.” D.C.
Super. Ct. Civ. R. 11(b)(2). Yet, Defendant now contends that
the very same Agreement effectively foreclosed the credits
sought by the Momenians, rendering recovery in the Superior
Court litigation “purely speculative.” Def.'s
Reply in Support of Def.'s Mot., ECF No. 19, at 3.
Defendant cannot have it both ways.
end, although the transactions at issue are complicated and,
in some cases, of uncertain legal effect, the central
question for purposes of Defendant's Motion to Dismiss is
whether Plaintiffs have made out plausible claims of
professional negligence and breach of fiduciary duty. The
court concludes that they have. Plaintiffs well-pleaded
allegations, along with the supporting records, render
plausible that Defendant committed malpractice and breached
fiduciary duties in connection with the Superior Court
action. Precisely what Defendant did in advance of filing
suit, during the investigation and litigation of the case,
and what advice he gave the Momenians about its likelihood of
success and settling the action, must be addressed through
discovery. See Am. Compl. ¶ 41 (alleging
negligence in investigating and analysis in the case, as well
as providing deficient advice concerning settlement).
Next, Defendant urges dismissal on the ground that the
Amended Complaint fails to allege that Plaintiffs suffered
harm as a result of Defendant's purported deficient
performance. Def.'s Mem. at 12. Defendant notes that,
according to the Amended Complaint, the Momenians at some
point transferred their property interests into a trust, the
Houshang Momenian Revocable Trust. Id. (citing Am.
Compl. ¶¶ 31, 36). Then, in May 2012, Mr.
Interdonato issued a notice of foreclosure on the
Trust, after which the Trust sued Mr. Interdonato in
D.C. Superior Court, seeking to prevent foreclosure and
challenging the amounts owed. See Am. Compl. ¶
34-35. That lawsuit eventually settled, with the Trust
agreeing to pay the Interdonatos the sum of $85, 000 in full
and final satisfaction of the Note. Id. ¶ 36.
Under this factual retelling, Defendant argues, only the
Trust was harmed by any malpractice, and not the Momenians.
See Def.'s Mem. at 12.
reads the Amended Complaint too narrowly. It is true that
Plaintiffs allege that the Trust ultimately satisfied the
outstanding balance on the Note. But the Momenians also claim
that they personally suffered harm as a result of
Defendant's negligence. For instance, the Momenians
allege that they personally overpaid the Interdonatos on the
Note because, by settling the initial Superior Court action
based on Defendant's advice, they never received full
credit for the claims that they released. See Am.
Compl. ¶¶ 29-30. The Momenians further allege that
they incurred costs associated with the accounting done to
determine the amount of overpayment on the Note, though it is
not clear on the face of the Amended Complaint whether these
expenses were incurred personally or by the Trust. See
Id. ¶ 42. Moreover, it might be the case-though the
court reaches no firm conclusion-that Houshang and Vida
Momenian, as beneficiaries of the Trust, id. ¶
3, also suffered a legally cognizable injury as a result of
the Trust's alleged overpayment, cf. Reardon v. Riggs
Nat'l Bank, 677 A.2d 1032, 1037 n.12 (D.C. 1996)
(noting exception to general rule that a beneficiary cannot
bring an action directly against a third-partly wrongdoer,
“if the beneficiary is in possession of the subject
matter of the trust”). Accordingly, the court concludes
that Plaintiffs have pleaded sufficient facts of harm arising
from Defendant's alleged professional malpractice to
survive Defendant's Motion to Dismiss.
also argues that the Trust cannot maintain a claim against
Defendant, because there is no allegation that Defendant ever
represented the Trust. See Def.'s Mem. at 12.
That is a fair point, and one that the court may consider
again at a later stage in this litigation, but at this time
the court is reluctant to dismiss the Trust's claims on
that ground. Given the allegation that “Defendant had
been representing Houshang in a variety of matters over a
lengthy period of time, ” Am. Compl. ¶ 7,
discovery could plausibly reveal some connection between
Defendant and the Trust that would give rise to a duty
running to the Trust. Therefore, the court will permit the
Trust's claims to proceed.
the foregoing reasons, Defendant's Motion to Dismiss the
Amended Complaint is denied. Defendant shall file an answer
no later than 14 days from the date of this order.
See Fed. R. Civ. P. 12(a)(4)(A).
The court, writing primarily for
the parties, does not summarize the Amended Complaint's
allegations. Plaintiffs' factual averments are set forth
in detail in the court's prior decisions, see
Momenian v. Davidson, 209 F.Supp.3d 288, 291-92 (D.D.C.
2016), rev'd Momenian, 878 F.3d at 381;
Momenian v. ...