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THE ARMENIAN ASSEMBLY of AMERICA, INC. Et Al., Plaintiffs

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THE ARMENIAN ASSEMBLY of AMERICA, INC. Et Al., Plaintiffs Case 1:08-cv-00255-CKK Document 193 Filed 01/26/11 Page 1 of 190 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA THE ARMENIAN ASSEMBLY OF AMERICA, INC. et al., Plaintiffs/Counter-Defendants, Civil Action Nos. 07-1259, 08-255, v. 08-1254 (CKK) GERARD L. CAFESJIAN et al., Defendants/Counter-Plaintiffs. MEMORANDUM OPINION (January 26, 2011) “Who, after all, speaks today of the annihilation of the Armenians?” These chilling words are said to have been spoken by Adolf Hitler in 1939 in reference to the largely successful efforts by the Ottoman Turkish government to eliminate the Armenian population living on its historic homeland during the World War I era, known today as the Armenian Genocide.1 Beginning around the year 2000, a group of dedicated individuals agreed to organize their efforts to build a museum in Washington, D.C. devoted to the understanding and memorialization of the Armenian Genocide. Unfortunately, that end goal was about all they could agree on, and after seven years of internal debate and struggles over the size and scope of the project, relations between the parties broke down completely, resulting in litigation that led to the three above-captioned cases. The parties to these actions are The Armenian Assembly of America, Inc. (the “Assembly”), Armenian Genocide Museum & Memorial, Inc. (“AGM&M”), 1 The use of the term “genocide” to describe the atrocities that befell the Armenians between 1915 and 1923 is not without controversy, but the parties in this case agree that it is appropriate. The Court has relied on the parties’ stipulated facts, and therefore the Court’s use of the term “genocide” is not intended to express any opinion on the propriety of that label. Case 1:08-cv-00255-CKK Document 193 Filed 01/26/11 Page 2 of 190 Gerard L. Cafesjian (“Cafesjian”), John J. Waters Jr. (“Waters”), and The Cafesjian Family Foundation, Inc. (“CFF”). On March 9, 2010, this Court issued a series of rulings granting-in- part and denying-in-part the parties’ various motions for summary judgment. See Armenian Genocide Museum & Mem’l, Inc. v. Cafesjian Family Found., Inc., 691 F. Supp. 2d 132 (D.D.C. 2010); Armenian Assembly of Am., Inc. v. Cafesjian, 692 F. Supp. 2d 20 (D.D.C. 2010); Waters v. Armenian Genocide Museum & Mem’l, Inc., 692 F. Supp. 2d 57 (D.D.C. 2010).2 The parties subsequently agreed to consolidate these cases for a single trial by the court without a jury. See Joint Stip. to Nonjury Trial, ECF No. [102]; Stip. of Consolidation, ECF No. [108].3 Based on the parties’ proposals during pretrial hearings, the Court ordered the parties to file consolidated complaints and answers with specific factual allegations supporting their remaining claims and counterclaims in the three cases. The Assembly and AGM&M (collectively, “Plaintiffs”) filed their Consolidated Complaint (hereinafter, “Complaint”), which alleges that Cafesjian and Waters each breached their fiduciary duties to AGM&M (Count One) and to the Assembly (Count Two), that Cafesjian breached his duty of good faith and fair dealing to the Assembly (Count Three), and that Cafesjian and Waters each misappropriated trade secrets of the Assembly (Count Four). See generally Consol. Compl. (hereinafter, “Compl.”), ECF No. [109]. Cafesjian, Waters, and CFF (collectively, “Defendants”) filed their Streamlined Answer and Counterclaims, which asserts claims for breach of contract against the Assembly (Count I) and AGM&M (Count II), breach of implied covenant of good faith and fair dealing against the 2 In the course of these rulings, the Court dismissed as parties John J. Waters Sr., The TomKat Limited Partnership, and Hirair Hovnanian. 3 For convenience, the Court shall refer only to docket entries in Civil Action No. 08-255. 2 Case 1:08-cv-00255-CKK Document 193 Filed 01/26/11 Page 3 of 190 Assembly (Count III) and AGM&M (Count IV), third-party beneficiary against AGM&M (Count V), unjust enrichment against the Assembly and AGM&M (Count VI), and indemnification against AGM&M (Count VII). See Streamlined Countercls. (hereinafter, “Countercls.”), ECF No. [104]; Answer to Consol. Compl., ECF No. [141]. Before trial, the parties also filed proposed conclusions of law. See Defs.’ Proposed Conclusions of Law, ECF No. [144] (hereinafter, “Defs.’ Concls.”); Pls.’ Proposed Conclusions of Law, ECF No. [145] (hereinafter, “Pls.’ Concls.”). A bench trial commenced on November 9, 2010. Plaintiffs called thirteen witnesses and introduced deposition testimony from five additional witnesses. Defendants called eight witnesses and introduced deposition testimony from one additional witness. To avoid having witnesses testify twice (once during Plaintiffs’ case and once during Defendants’ case), the parties agreed that Defendants could cross-examine Plaintiffs’ witnesses beyond the scope of direct examination. At the close of Plaintiffs’ case-in-chief, Defendants orally moved for judgment on partial findings under Federal Rule of Civil Procedure 52(c). Plaintiffs also moved orally for judgment on partial findings at the close of Defendants’ case-in-chief. After hearing brief argument, the Court took those motions under advisement.4 Plaintiffs did not present any evidence in rebuttal to Defendants’ case. The trial concluded with closing arguments on the twelfth trial day, November 29, 2010. There were 453 exhibits admitted into evidence, 282 marked as Plaintiffs’ exhibits (“PX-”) and 171 marked as Defendants’ Exhibits (“DX-”). See 4 Ultimately, the Court exercised its discretion and declined to enter judgment prior to the close of the evidence. See Fed. R. Civ. P. 52(c). 3 Case 1:08-cv-00255-CKK Document 193 Filed 01/26/11 Page 4 of 190 Amended Exhibits Entered During Trial: Nov. 9-24, 2010.5 At the request of the Court, the parties did not file proposed findings of fact or revised conclusions of law after trial. However, Defendants did file a [190] Notice of Untruthful Testimony of Plaintiffs’ Witnesses summarizing what they perceived to be inconsistencies in the testimony presented by Plaintiffs, to which Plaintiffs filed a [191] Response. The Court has placed no special weight on these filings and has made its own conclusions with respect to the credibility of the witnesses. This memorandum opinion contains the Court’s findings of fact and conclusions of law. In making the findings enumerated below, the Court has relied on the testimony of the witnesses, the exhibits admitted into evidence, and the record as a whole. The Court has not relied on any exhibits that were not admitted into evidence or testimony that was stricken from the record at trial. In addition, the Court has considered only the legal arguments made by the parties on the record during the course of the trial, in the pleadings, or in the proposed conclusions of law. I. INTRODUCTION A. Preliminary Observations Before the Court proceeds with a recitation of the facts, a few preliminary comments are in order. The factual record in this case is voluminous, and the Court has reviewed every exhibit admitted and reviewed the transcripts of each witness’s testimony. The key events relevant to this dispute occurred over a period of approximately eight years leading up to the filing of the first lawsuit and continued while the parties were in litigation. Although the parties strongly 5 Following the trial, the parties provided the Court with a list of the exhibits that they agree were admitted into evidence, and the Court has relied on this document. Although some additional exhibits were discussed at various points during the trial, the Court has not relied on any exhibits that are not on the list of admitted exhibits agreed on by the parties. The Court notes that there is an error on the admitted exhibit list, as PX-364 is listed twice. 4 Case 1:08-cv-00255-CKK Document 193 Filed 01/26/11 Page 5 of 190 disagree about what motivated them to take certain actions, the facts of what actually occurred are largely undisputed. However, because context is critical to understanding the relationships between the parties and the reasons for their actions (or their inaction), the Court has endeavored to make its findings of fact as specific and detailed as possible. Several key witnesses were unable to recall specific details from the meetings and events that gave rise to the claims in these lawsuits. In some cases, the witnesses were unable to remember any details from such meetings or events. To a certain extent, these witnesses’ lack of memory is unsurprising. After all, the events took place between four and ten years ago, and the Court is also mindful of the fact that several of these witnesses are octogenarian. However, in many instances, lack of memory appeared to be driven more by convenience than cognition. Some witnesses were unable to recall their attendance at critical meetings even when presented with written records of the actions they took. Some witnesses could recall in detail events that were favorable to them (or unfavorable to their opponents) but were hazy about similar events that were unfavorable to them (or favorable to their opponents). Additionally, most of the witnesses who testified at trial are biased in some manner, either because they have a financial stake in the outcome of the trial or because their reputation has been called into question by the allegations raised in this litigation. The Court considers all of this as a factor in assessing the credibility of the witnesses. Because of concerns about the reliability of some of the witnesses’ testimony, the Court relies heavily on the admitted exhibits to document what transpired at the time. With the exception of a few exhibits that were admitted only for a limited purpose, the parties have largely waived objections as to the authenticity of or hearsay contained in the vast array of emails, 5 Case 1:08-cv-00255-CKK Document 193 Filed 01/26/11 Page 6 of 190 letters, meeting notes, minutes, and other records admitted during the trial.6 Although there are some minor inconsistencies and a few major ones in the documentary evidence submitted, the Court finds that the exhibits are generally the best evidence of what occurred because most of them were created at the same time as the events they describe or shortly thereafter.
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