Armenian Assembly of America v. Gerard Cafesjian

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 21, 2014 Decided July 15, 2014

No. 11-7048

ARMENIAN ASSEMBLY OF AMERICA, INC., ET AL.

APPELLANTS

v.

GERARD L. CAFESJIAN, ET AL.,

APPELLEES

Consolidated with 11-7049, 11-7054, 11-7055, 11-7056,

11-7057, 11-7110, 11-7111, 11-7112, 13-7050, 13-7051

Appeals from the United States District Court

for the District of Columbia

(No. 1:07-cv-01259)

(No. 1:08-cv-00255)

(No. 1:08-cv-01254)

William S. Consovoy argued the cause for

appellants/cross-appellees. With him on the briefs were

Brendan J. Morrissey, Helgi C. Walker, and Richard I.

Chaifetz.

John B. Williams argued the cause and filed the briefs for

appellees/cross-appellants.

2

Before: GARLAND, Chief Judge, WILKINS, Circuit Judge,

and GINSBURG, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge WILKINS.

WILKINS, Circuit Judge: Nearly a century ago, around

the start of the First World War, the Ottoman Turkish

government engaged in a years-long conflict with its

Armenian population. According to the parties to these

appeals, this is “the single most resonant occurrence in

modern Armenian culture,” in which “approximately one and

a half million Armenians were killed and hundreds of

thousands were deported and forcibly converted” in what they

refer to as the “Armenian Genocide.” Joint Appendix

(“J.A.”) 237 (Joint Pretrial Statement ¶¶ 13-14). 1 Far more

recently, beginning in the 1990s, a coalition of dedicated

individuals came together to create an “Armenian Genocide

Museum” here in Washington, D.C. This litigation springs

from their efforts—or, more accurately, the unraveling of

their efforts—to bring that vision to life.

The venture began successfully enough. Buoyed with

enthusiasm, the architects behind the project set to work.

They secured sizeable funding contributions, and they formed

a nonprofit corporation, the Armenian Genocide Museum and

Memorial (“AGM&M”). They also agreed on and purchased

a historic building for the museum’s site, just a few blocks

from the White House. But as the years wore on, they were

unable to agree on much else. Progress staggered. Tensions

1

We are well aware of the longstanding dispute in the global

community about the characterization of these events, particularly

the use of the term “genocide.” As they did in the court below, the

parties all use that label; we endorse no view ourselves.

3

mounted. Little true headway was made. Eventually, one of

the project’s principal founders and benefactors, the late

Gerard Cafesjian, chose to part ways with the group and

resigned his post as President of AGM&M. 2 The split was far

from amicable. And so began a chain of events culminating

in this tangle of litigation.

After several years of legal wrangling, the parties’ claims

ultimately proceeded to a bench trial before the District Court.

Save for a single cause of action, all of the claims were found

unproven. Post-trial proceedings ensued on a multitude of

issues, and, after many of the District Court’s decisions were

appealed on a piecemeal basis, the assorted cases on appeal

were consolidated and presented to us for resolution.

Disagreeing with the parties’ challenges to the rulings below,

we affirm the District Court on all accounts.

I.

The factual backdrop surrounding these appeals is, to put

things mildly, lengthy. The District Court’s findings of fact

alone span nearly seventy-five pages in the Federal

Supplement. See Armenian Assembly of Am., Inc. v.

Cafesjian, 772 F. Supp. 2d 20, 28-102 (D.D.C. 2011).

Hoping to keep things a bit more simple, we recount only the

facts relevant to our disposition and otherwise commend the

interested reader to the District Court’s able and thorough

synopsis of this dispute’s history. 3

2

Cafesjian passed away during the pendency of these proceedings,

in September 2013. Per Federal Rule of Appellate Procedure

43(a)(1), we allowed the substitution of Kathleen Baradaran,

Cafesjian’s personal representative, in his stead.

3

Unless specifically denoted by a citation to the Joint Appendix,

we draw record support for our factual statements from the District

Court’s findings of fact.

4

A.

In the mid- to late-1990s, several individuals resolved to

coordinate their efforts to create an Armenian Genocide

Museum.

One of the groups behind these efforts was the Armenian

Assembly of America (the “Assembly”). Founded as a

charitable, nonprofit organization, the Assembly advocates

for and educates the public about Armenian issues in the

United States. Over the years, many have been involved with

the Assembly’s leadership and work, but only a few names

are relevant to the issues we confront in this dispute. Hirair

Hovnanian is one of the Assembly’s founders and has served

as the chairman of its board of trustees since the 1970s;

Robert Kaloosdian is another founder of the Assembly and

has served as a long-time trustee on its board; and Anoush

Mathevosian is an Armenian-American philanthropist who,

over the years, has dedicated a wealth of her time and money

to the Assembly’s work, including as a trustee herself. These

folks were all involved, in some way or another, with the

Assembly’s early efforts in creating a museum.

During this same period, Cafesjian was independently

planning a similar endeavor: the construction of a memorial

dedicated to the victims and survivors of the “Armenian

Genocide,” though not necessarily to be built in Washington,

D.C. He and John Waters, Jr.—Cafesjian’s “right-hand

man”—channeled their work on this project through the

Cafesjian Family Foundation (“CFF”), a charitable

organization founded by Cafesjian and his family. As luck

would have it, the two groups discovered the other’s plans,

and they arranged to meet to discuss the possibility of a

combined museum and memorial. Not long after, Cafesjian

5

and Waters officially joined the Assembly as trustees,

although they continued to search separately for a potential

site for the memorial. That is, until the Assembly came upon

a prime location for the project in the heart of D.C.: the

National Bank of Washington Building (“Bank Building”).

The Bank Building sits at the corner of 14th and G

Streets N.W., practically a stone’s throw from the White

House. It is designated as a historic District of Columbia

landmark, both by the National Register of Historic Places

and the D.C. Inventory of Historic Sites. 4 The Assembly

reached out to Cafesjian about the Bank Building, and

Cafesjian was extremely interested. He quickly dispatched

Waters to conduct the necessary due diligence on the

property, and the group as a whole decided to move forward,

agreeing to develop the site as a consolidated museum and

memorial. Cafesjian donated $3.5 million to the Assembly to

help acquire the Bank Building, and Mathevosian also

pledged $3.5 million for its purchase. Because Mathevosian

could not access her share of the funds by the closing date,

however, Cafesjian (largely through CFF) floated the

Assembly an interest-free bridge loan of $4 million to ensure

the deal could go through. The Assembly closed on the Bank

Building in February 2000, for a purchase price of $7.25

million. Upon receipt of Mathevosian’s pledge, the Assembly

repaid $3.5 million to CFF in March 2000 and executed an

interest-free promissory note to CFF for the remaining

$500,000, originally payable in May 2000.

4

The property is also known as the “Federal-American National

Bank” and the “Hamilton National Bank.” See U.S. Dep’t of

Interior, National Park Service, National Register of Historic

Places Registration Form (Nov. 23, 1994), available at

http://pdfhost.focus.nps.gov/docs/NRHP/Text/94001517.pdf (last

visited July 14, 2014) (describing the property and its historical

architecture and elements).

6

The Bank Building, as it turns out, would not be the only

property set aside for the project’s development. Following

the Assembly’s purchase of the Bank Building, Cafesjian

began to acquire additional properties along G Street,

adjacent to the Bank Building. Between March 2000 and

September 2003, Cafesjian—through one of his other

companies, TomKat Limited Partnership—purchased four

additional properties, located at 1334-36, 1338, 1340, and

1342 G Street N.W. (“Adjacent Properties”). All these

properties were paid for in full at closing, with the exception

of 1340 G Street, which was payable by installment contract;

after the deal closed in March 2001, regular, annual payments

on that property were to be made, with a final balloon

payment due at the end of ten years. Originally, Cafesjian

bought these properties with an eye toward using them for a

contemporary art museum, but after that concept was

abandoned, Cafesjian decided to donate the properties to the

Assembly to expand the footprint of the museum effort.

Having lined up a site for the project, the Assembly set to

work to bring the concept to life. Initially, this work was

spearheaded by a planning committee formed within the

Assembly, but, as the District Court noted, the committee

“was a somewhat fluid body,” with about a dozen different

individuals involved at one point or another. Armenian

Assembly of Am., 772 F. Supp. 2d at 36. With so many cooks

in the kitchen, suffice it to say that the formation of the

planning committee was not a recipe for success. After much

talk and little action over the next several years, the

Assembly’s board ultimately decided to create an independent

entity to focus on the museum’s development. Thus was born

AGM&M.

7

AGM&M was incorporated as a District of Columbia

not-for-profit corporation in October 2003. Under the articles

of incorporation and bylaws, control of AGM&M was vested

in a board of trustees, initially composed of Cafesjian

(representing CFF), Kaloosdian (representing the Assembly),

Hovnanian, and Mathevosian. By way of a unanimous

written consent agreement signed at AGM&M’s inception, all

four trustees agreed to appoint Cafesjian as Chairman and

President of AGM&M, Hovnanian as Vice Chairman, and

Waters as Secretary and Treasurer. AGM&M’s mission

would be focused exclusively on the development and

creation of the museum and memorial project.

Because Cafesjian agreed to route his donations to

AGM&M through the Assembly, the parties set up a legal

two-step. First, Cafesjian and CFF entered into a grant

agreement with the Assembly (“Grant Agreement”),

memorializing the terms of their gifts to the Assembly;

second, the Assembly then agreed to transfer to AGM&M all

of its museum-related assets and obligations, including the

Bank Building and the Adjacent Properties, through a

separate transfer agreement.

One part of the Grant Agreement—a provision the parties

consistently refer to as a “reversion clause”—plays a central

role in this litigation. It reads as follows:

If the Grant Property is not developed prior to

December 31, 2010[,] in accordance with the Plans, or

if the Grant Property is not developed in substantial

compliance with the Plans including with respect to

the deadlines for completion of the construction,

renovation, installation and other phases detailed in

the Plans, then:

8

(i) in the event any portion of the Grants has

not been funded, this Agreement

terminates; and

(ii) to the degree any portion of the Grants has

been funded, at the Grantor’s sole

discretion, the Assembly shall return to the

Grantor the Grant funds or transfer to the

Grantor the Grant Property.

J.A. 463 (§ 3.1(B)). The capitalized terms “Grantor,”

“Grants,” and “Grant Property” are all specifically defined

elsewhere in the Grant Agreement. “Grantor” is defined as

Cafesjian and CFF, together. J.A. 461. The “Grants” are

made up of the “First Grant” and the “Second Grant,” which

are defined, respectively, as (1) the share of funds contributed

by CFF for the Bank Building’s purchase (and an additional

amount to be used for the installation of a memorial), and (2)

the funds contributed by CFF and Cafesjian to acquire the

Adjacent Properties. J.A. 461-63 (§§ 1.1-1.3, 2.1-2.3).

Further, “Grant Property” is defined as the combination of the

“First Grant Property” and the “Second Grant Property,”

terms themselves defined as the Bank Building and the

Adjacent Properties, respectively. J.A. 461-63 (§§ 1.2, 2.2,

3.1(A)). The “Plans” described in this provision refer to

design plans for the project as approved by the AGM&M

board at some point in the future. 5

5

The Grant Agreement also required the Assembly to reissue a

$500,000, interest-free promissory note to replace the previous note

issued to CFF. It designated the maturity date on the note as

December 31, 2005. J.A. 467 (§ 5.4(B)). The promissory note was

to be transferred to AGM&M, along with all other museum-related

assets and liabilities.

9

With the newly formed AGM&M at the reins, the group

was infused with a renewed sense of hope that the museum

project would finally get off the ground. But as the old

French proverb goes, sometimes, the more things change, the

more they stay the same.

Though AGM&M’s board of trustees convened several

meetings to develop an action plan for moving forward,

consensus was an elusive target. They considered hiring an

executive director and even received resumes from several

qualified candidates, but they never moved forward with

interviews, albeit in part due to a sense that AGM&M lacked

the funds needed to create the position. The board also tried

to begin selecting an architect for the project, but they could

not even agree on the process to select an architect, let alone

the actual architect. The board did agree to hire, on a four-

month trial basis, a consultant to develop a business plan for

the project, but her plan met with disapproval, and her

relationship with AGM&M was not renewed. All the while,

amid this general atmosphere of inaction, AGM&M was

facing financial difficulties. Most of its funding contributions

were tied up in the real estate acquisitions, and the carrying

costs of the properties and other basic operating expenses

were draining AGM&M’s coffers. Despite these fiscal

challenges, the organization had no real fundraising initiatives

underway at the time.

Around this period, tensions began to mount between

Cafesjian and Hovnanian, amplified by a variety of issues that

surfaced between the two. The gritty details are beyond the

scope of this opinion. For our purposes, we can fast forward

to 2006, when Cafesjian concluded that his differences with

Hovnanian had become irreconcilable. After failed efforts to

reach an agreeable transition plan and a mutually acceptable

distribution of the museum-related properties, Cafesjian sent a

10

letter to the AGM&M trustees in September 2006,

announcing his resignation as Chairman and President of

AGM&M effective immediately; he also communicated that

Waters would resign as Secretary and Treasurer (that

resignation became effective about a month later). 6

In the wake of the late-2006 shake-up, AGM&M

reconstituted its leadership, effectively transferring control to

the leadership of the Assembly. Work on the museum

resumed—at least for a stint. The board of trustees created a

“building and operations committee” to assume responsibility

for the planning of and fundraising for the museum. And the

committee made some tangible progress. It retained project-

design and architecture firms to develop a “master planning

document,” and those plans were completed in October 2007.

At that point, AGM&M anticipated the museum would open

by April 2010. The committee also obtained an adjustment

from the D.C. Board of Zoning Adjustments, to allow for the

construction of an annex on a vacant section of the Bank

Building plot, and it was able to secure preliminary approval

of the museum’s design from the D.C. Historical Preservation

Review Board in March 2008. In early 2008, the committee

even selected a general contractor for the museum’s

construction. In short, as the District Court found,

AGM&M’s building and operations committee “worked

furiously through late 2007 and early 2008.” Armenian

Assembly of Am., 772 F. Supp. 2d at 99.

But by March 2008, it became clear that AGM&M was

facing substantial fundraising problems. In mid-2008, the

committee put the project on hold while they sought

additional ways to raise money. They pursued fundraising

6

Cafesjian would remain on the trustee board until May 2007, and

Waters until March 2009.

11

contributions from donors to keep the project going, but to no

avail. These fundraising difficulties, the District Court found,

were due in substantial part to ongoing litigation implicating

the museum project. Id. at 101 (“The Assembly tried to

solicit major donors for large contributions to keep the

museum project going forward, but the dispute with Cafesjian

had somewhat poisoned the donor well.”); id. at 116 (“[T]he

ongoing litigation may have dampened donor enthusiasm for

the project.”). 7 Ultimately, in 2009, AGM&M ran out of

funds entirely and could not continue to pay its contractors,

resulting in liens being filed.

The museum never moved beyond the design stage. And

with the project stalled altogether, the parties’ focus shifted

almost entirely to this litigation, the history of which we turn

our attention to next.

B.

Cafesjian and CFF filed the first lawsuit in April 2007,

suing the Assembly in the U.S. District Court for the District

of Minnesota. They alleged that the Assembly had failed to

reissue the $500,000 promissory note as required by the Grant

Agreement, asserting claims for breach of contract and breach

of the implied covenant of good faith and fair dealing. The

7

Another fundraising approach the committee pursued was

attempting to lease space in one of the Adjacent Properties—the

“Families USA building” located at 1334-36 G Street N.W. Unable

to secure any interest from potential third-party tenants, AGM&M

finally opted to enter into a lease with the Assembly, which moved

into the space in May 2009. The original term of that lease expired

on December 31, 2010, but the arrangement was subject to an

automatic, five-year renewal period absent either party’s notice of

termination. J.A. 769-810. The validity of this lease is one of the

issues we are asked to decide through these appeals.

12

complaint sought damages of $500,000, as well as rescission

of the Grant Agreement and restitution of all grants and

donations made therein.

AGM&M responded in kind. Two months later, in June

2007, AGM&M filed suit against CFF in the Superior Court

of the District of Columbia, seeking to quiet title to the

museum-related properties; that case was removed to federal

court. Then, in September 2007, CFF brought a separate

lawsuit against AGM&M and its trustees in U.S. District

Court for the District of Columbia, seeking to enjoin any

further development of the museum without input from CFF.

That same month, AGM&M and the Assembly demanded

arbitration based on a clause in the transfer agreement, and

that move prompted Cafesjian, Waters, CFF, and TomKat to

file another lawsuit in the Minnesota District Court to enjoin

the arbitration proceedings, on the basis that they were not

parties to the transfer agreement. Cafesjian, Waters, CFF,

and TomKat next filed an action in the Minnesota District

Court on February 14, 2008, seeking declaratory relief against

AGM&M and the Assembly, and that case was subsequently

transferred to the D.C. District Court. On February 15,

2008—one day after the prior lawsuit hit the docket—

AGM&M and the Assembly brought yet another case in D.C.

District Court against Cafesjian, Waters, and CFF; several

months later, in July 2008, Cafesjian, Waters, and CFF

asserted, in that same case, several counterclaims against

AGM&M and the Assembly. Of these six—count them,

six—separate lawsuits, several were dismissed. The original

lawsuit filed in April 2007 was dismissed by the Minnesota

District Court for failure to join AGM&M as a necessary

party; the October 2007 lawsuit filed in Minnesota District

Court was eventually dismissed by stipulation of the parties;

and the parties also stipulated to the dismissal of the lawsuit

that was filed in D.C. District Court in September 2007. This

13

left three cases that were consolidated before the District

Court below. 8

The remaining cases ultimately proceeded to a bench trial

in November 2010. Plaintiffs AGM&M and the Assembly

(“Appellants” here) pressed four claims: (1) that Cafesjian

and Waters, through a variety of misconduct, breached their

fiduciary duties as trustees and officers of AGM&M; (2) that

Cafesjian and Waters breached their fiduciary duties as

trustees of the Assembly; (3) that Cafesjian breached the duty

of good faith and fair dealing implicit in the Grant Agreement

with the Assembly, both by mismanaging the museum project

and by obstructing progress on the museum after resigning;

and (4) that Cafesjian and Waters misappropriated the

Assembly’s trade secrets. They also sought a declaratory

judgment deeming the Grant Agreement’s reversion clause

unenforceable and quieting title to the properties. Defendants

Cafesjian, Waters, and CFF (here, “Appellees”) asserted

counterclaims against AGM&M and the Assembly, generally

claiming breaches of the Grant Agreement and the transfer

agreement, including by failing to reissue and repay the

promissory note, by excluding CFF from the planning

process, and more. Relatedly, they argued that AGM&M’s

lease of space to the Assembly was a breach of its contractual

obligations under the Grant Agreement to use the Adjacent

Properties only “as part of” the museum project. Finally,

Cafesjian and Waters sought indemnification from AGM&M

under the bylaws for costs expended in defending against its

claims for breach of fiduciary duty.

8

During the pendency of these proceedings, Cafesjian arranged for

a lis pendens to be recorded with the D.C. Recorder of Deeds to

serve as notice of the ongoing litigation concerning the museum-

related properties. See J.A. 615-17.

14

In January 2011, the District Court issued its Findings of

Fact and Conclusions of Law. Save for one set of claims, the

District Court concluded that neither side proved the merit of

its claims. The sole exception was Cafesjian’s and Waters’

claims for indemnification as against AGM&M, which the

District Court found meritorious. See Armenian Assembly of

Am., 772 F. Supp. 2d at 102-27. The District Court also ruled

that the reversion clause in the Grant Agreement was valid

and enforceable, though it requested further briefing on the

precise contours of the resulting property transfer. Id. at 121-

22, 127. The court further found that AGM&M validly

entered into the lease of the Families USA building with the

Assembly. Id. at 125-26. Finally, the District Court

concluded that AGM&M had wrongly excluded CFF as a

trustee and thus ordered that CFF was entitled to appoint a

representative to the AGM&M board. Id. at 128-29.

Subsequently, AGM&M and the Assembly filed a

motion seeking a new trial, based on the trial judge’s

supposedly undisclosed bias toward Cafesjian. The motion

was principally based on the theory that the judge was

incapable of being impartial because she and Cafesjian (along

with several other donors) made a gift to the Metropolitan

Museum of Art years prior, and because she and Cafesjian

supposedly shared an interest in fine glass art. The District

Court denied that motion in a published opinion. Armenian

Assembly of Am. v. Cafesjian, 783 F. Supp. 2d 78 (D.D.C.

2011). The same date, the District Court issued a separate

opinion concluding that, under the reversion clause, CFF was

entitled to transfer of the properties in their entirety, without

any setoff amount owed to AGM&M; that decision also

reaffirmed the indemnification ruling in the face of renewed

challenges by AGM&M, though the court referred the matter

to a Magistrate Judge for a recommendation as to the specific

15

amount of the award. Armenian Assembly of Am. v.

Cafesjian, 772 F. Supp. 2d 129 (D.D.C. 2011).

As the dispute began to make its way into our hands on

appeal, a few additional developments followed at the trial

level. In September 2011, the District Court concluded that

the Assembly’s lease in the Families USA building remained

valid even after transfer of the property to CFF under the

reversion clause. Armenian Assembly of Am. v. Cafesjian,

811 F. Supp. 2d 120 (D.D.C. 2011). Subsequently, the

Magistrate Judge issued a Report and Recommendation on

the indemnification issue, and after evaluating several

objections, the District Judge adopted that recommendation

with minor adjustments in February 2013. Armenian

Assembly of Am. v. Cafesjian, 924 F. Supp. 2d 204 (D.D.C.

2013) (awarding Cafesjian and Waters about $1.45 million in

fees, plus post-judgment interest). Finally, the District Court

denied a second motion for new trial filed by AGM&M and

the Assembly, disagreeing that a newly filed lawsuit by

Waters against Cafesjian merited another trial in the instant

dispute. Armenian Assembly of Am. v. Cafesjian, 924 F.

Supp. 2d 183 (D.D.C. 2013).

The parties timely appealed many of the District Court’s

rulings, and we consolidated the cases for our review. The

moving parts in these consolidated appeals are myriad, but, as

best we can distill things, there are five principal issues we

must tackle: (1) the disposition of Appellants’ claims for

breach of fiduciary duty against Cafesjian and Waters; (2) the

enforcement of the Grant Agreement’s reversion clause,

pursuant to which CFF took full title to the Bank Building

and the Adjacent Properties; (3) the indemnification of

Cafesjian and Waters and the associated award; (4) the denial

of Appellants’ post-trial motions for relief; and (5) the

validity of the Assembly’s lease in the Families USA

16

building. In the sections that follow, we take each issue in

turn.

II.

We first examine Appellants’ claims against Cafesjian

and Waters for breach of fiduciary duty. On this issue, we

review the District Court’s legal determinations de novo and

its findings of fact for clear error. Gov’t of Rwanda v.

Johnson, 409 F.3d 368, 372 (D.C. Cir. 2005).

At the outset, all agree that, because both AGM&M and

the Assembly are District of Columbia nonprofits, District of

Columbia law governs these claims. See RESTATEMENT

(SECOND) OF CONFLICTS OF LAW § 309; cf. Weiss v. Kay

Jewelry Stores, Inc., 470 F.2d 1259, 1268 (D.C. Cir. 1972).

Under District law, it is well settled that a nonprofit

corporation’s directors and officers owe fiduciary duties to

the organization, just the same as with any corporation.

Willens v. 2720 Wis. Ave. Coop. Ass’n, Inc., 844 A.2d 1126,

1136 (D.C. 2004); Friends of Tilden Park, Inc. v. District of

Columbia, 806 A.2d 1201, 1210 (D.C. 2002). These duties

are multifaceted: “[A] director or officer of a corporation

owes the corporation complete loyalty, honesty, and good

faith.” 3 FLETCHER CYC. CORP. § 837.50 (2010 rev’d

volume) (cited approvingly in Willens, 844 A.2d at 1136, and

Friends of Tilden Park, 806 A.2d at 1210); cf. Cahn v.

Antioch Univ., 482 A.2d 120, 131-32 (D.C. 1982).

According to Appellants, Cafesjian and Waters violated

these fiduciary responsibilities by engaging in a series of

actions—both during their tenure with AGM&M and after—

engineered to thwart AGM&M’s mission and derail the

museum’s progress. To prevail, Appellants shouldered the

burden of establishing not only the existence and breach of an

17

underlying duty by Cafesjian and Waters, but also a resultant

injury proximately caused by such breach. Pietrangelo v.

Wilmer Cutler Pickering Hale & Dorr LLP, 68 A.3d 697,

709-10 (D.C. 2013). The District Court thought they came up

short. Appellants now attack that outcome from several

angles, but because they fail to convince us that the District

Court erred in finding the injury element unproven, we need

not engage with their other arguments as to the breach

element. See Randolph v. ING Life Ins. & Annuity Co., 973

A.2d 702, 709 (D.C. 2009). On the injury front, Appellants

press two main arguments. Neither is persuasive.

First, Appellants contend that the District Court failed to

properly consider whether Cafesjian’s and Waters’ conduct

caused AGM&M to lose donations needed to move forward

with the museum’s development. This inability to fundraise,

they insist, was an injury proximately caused by Appellees.

We disagree. The District Court determined, as a factual

matter, that “the evidence at trial did not establish that any

donors changed their decisions to donate based on

Defendants’ conduct.” Armenian Assembly of Am., 772 F.

Supp. 2d at 116-17; id. at 116 (“[T]he record does not clearly

show that any actions by Cafesjian and Waters caused

AGM&M to lose donors.”). “At most,” the District Court

found, “the evidence showed that donors chose to withhold

their donations until the litigation was resolved and/or the

museum was opened,” and, since both sides contributed to the

cloud of litigation enveloping the museum project, the

District Court concluded that “donors’[] concerns about ‘the

litigation’ cannot be attributed solely to Defendants.” Id. at

117. These factual findings must stand unless “clearly

erroneous,” FED. R. CIV. P. 52(a)(6)—that is, unless “we are

left with a firm conviction that a mistake has been

committed,” Koszola v. F.D.I.C., 393 F.3d 1294, 1300 (D.C.

18

Cir. 2005)—and, despite Appellants’ conclusory arguments to

the contrary, no such conviction compels us here.

Second, Appellants contend that AGM&M was injured

when Cafesjian and Waters recorded a lis pendens for the

museum-related property in June 2008, see J.A. 615-17,

which they contend “stopped construction in its tracks.”

Appellants’ Br. at 54. As Appellants’ argument goes, once

the lis pendens was filed (and for so long as it remained on

the books), AGM&M was legally unable to make any

improvements or changes to the affected property, thus

rendering impossible completion of the museum project by

the Grant Agreement’s December 2010 deadline. We are

unconvinced. Even if we were to accept that a lis pendens

operates as the sort of absolute, legal roadblock Appellants

claim—a question we do not reach—their theory stands at

odds with the District Court’s findings of fact. As explained

above, the District Court found that “the reason [AGM&M]

put a ‘pause’ on the development was a lack of funding to

continue the project.” Armenian Assembly of Am., 772 F.

Supp. 2d at 116. It made no mention of the lis pendens

impeding the project’s progress. So in light of the District

Court’s factual findings, to which we defer, the filing of the

lis pendens was not the cause of any claimed injury. We

therefore reject this theory as well.

Otherwise, Appellants have abandoned the other claims

of injury advanced below—increased tax consequences, legal

fees, and others, see Armenian Assembly of Am., 772 F. Supp.

2d at 116-17—and we need not pass on them here. In sum,

because Appellants failed to prove that they were injured by

any of the supposed breaches they attribute to Cafesjian and

Waters, we find no error in the District Court’s resolution of

their breach-of-fiduciary-duty claims.

19

III.

Much of Appellants’ focus on appeal—indeed, much of

the parties’ overall focus throughout this litigation—has been

trained on the Grant Agreement’s reversion clause. Because

AGM&M failed to develop (or at least “substantially

develop”) the museum by December 2010, the District Court

concluded that the Grant Agreement provided Cafesjian and

CFF the right to seek transfer of the properties granted to

AGM&M for the museum’s use. See Armenian Assembly of

Am., 772 F. Supp. 2d at 121-22. From Appellants’

perspective, the District Court wrongly enforced and

interpreted the reversion clause. Although they advance a

multitude of arguments on this issue, we find none availing

and only two worthy of any detailed discussion. 9

First, Appellants contest the enforceability of the

reversion clause as a general matter. They argue that the

District Court should have exercised its equitable powers to

either toll the reversion deadline, or deem the reversion clause

unenforceable altogether, based on the prevention doctrine.

In their view, because Cafesjian’s actions were the very

reason AGM&M could not develop the museum by the end of

2010, equity should not permit him to benefit from

AGM&M’s failure to meet that deadline.

9

We recognize that some uncertainty arose in the District Court as

to whether this provision truly describes “reversion” rights, rather

than “transfer” rights—insofar as the properties were originally

held by TomKat, and not Cafesjian or CFF directly, and thus would

not truly “revert” to Cafesjian or CFF in the event the provision

were triggered. Without expressing any opinion on the legal

consequences of the label, we adopt the term “reversion clause” for

simplicity’s sake, only because the parties have used that moniker

throughout the litigation.

20

To be sure, the District of Columbia does recognize the

prevention doctrine, which stands for the proposition that if

one contracting party’s actions are the cause for another

party’s failure to satisfy a condition in the contract, “he

cannot take advantage of the failure.” In re Estate of Drake, 4

A.3d 450, 454 (D.C. 2010) (internal citation omitted); see

also Aronoff v. Lenkin Co., 618 A.2d 669, 682 (D.C. 1992)

(“Prevention . . . can negate a requirement to satisfy a

condition precedent.”); 13 WILLISTON ON CONTRACTS § 39:3,

at 569 (4th ed. 2013) (“It is a general principle of contract law

that if one party to a contract hinders, prevents, or makes

impossible performance by the other party, the latter’s failure

to perform will be excused.”). The trouble with Appellants’

prevention theory, however, is that it is undercut by the

District Court’s factual findings. As the District Court

interpreted the evidence below, it was the “lack of funding”

that caused AGM&M to put the brakes on the museum

project, “and the record [did] not clearly show that any

actions by Cafesjian . . . caused AGM&M to lose donors.”

Armenian Assembly of Am., 772 F. Supp. 2d at 116; see also

id. (“Plaintiffs blame Cafesjian . . . for their inability to

fundraise, but that claim is speculative.”). And, as we have

already noted, the District Court found that prospective

donors may have chosen to delay their contributions because

of the litigation brought by both of the contracting parties.

Thus, even if Cafesjian did truly interfere with the museum’s

progress, as Appellants insist, the District Court’s findings

confirm that any such actions were not the cause of

AGM&M’s inability to substantially complete the museum by

December 2010.

In an effort to escape this outcome, Appellants also

contend that the District Court’s factual findings are

immaterial because it applied the wrong legal standard for

causation in the first place. They argue that Cafesjian’s

21

actions need only have been “fairly attributable” to

AGM&M’s failure to meet the reversion clause’s deadline,

and not necessarily the “but-for” cause, as the District Court

supposedly surmised. We decline to entertain this argument

because—as was an unfortunate theme in these appeals—it

was not raised by Appellants until reply. See, e.g., S. Coast

Air Quality Mgmt. Dist. v. EPA, 554 F.3d 1076, 1081 n.*

(D.C. Cir. 2009) (“[I]n order to prevent sandbagging of

appellees and respondents, we do not consider arguments that

were raised neither in the opening brief nor by respondents.”)

(internal citation and quotation marks omitted).

Second, Appellants argue that, even if the reversion

clause is valid and enforceable as a general matter, the

District Court was wrong to allow CFF to take the properties

in full—particularly the Bank Building, since nearly half of

the funds used for its original purchase were provided by

neither CFF nor Cafesjian. Instead, Appellants urge, the

language of the Grant Agreement only allows “Cafejsian to

recoup what he contributed to the project”—i.e., a percentage

share of the Bank Building. Appellants’ Reply Br. at 15.

This argument hinges on three words used in the reversion

clause: “to the degree any portion of the Grants has been

funded, at the Grantor’s sole discretion, the Assembly shall

return to the Grantor the Grant funds or transfer to the

Grantor the Grant Property.” J.A. 463 (§ 3.1(B)(ii))

(emphasis added). Appellants claim that, by inserting the

phrase “to the degree,” the parties unambiguously signified

that any potential reversion—whether of funds or of

property—would be proportionate to the amount of CFF’s

and Cafesjian’s contributions. See Appellants’ Reply Br. at

17 (“In other words, Cafesjian could elect to recoup the Grant

funds ‘to the degree’ he had actually provided them or require

the Assembly to transfer the Grant Property ‘to the degree’

that he had provided funds to purchase it.”). We, like the

22

District Court, think this argument boils down to a

“straightforward question of contract interpretation.”

Armenian Assembly of Am., 772 F. Supp. 2d at 144.

The District of Columbia follows the “‘objective’ law of

contracts, which generally means that ‘the written language

embodying the terms of an agreement will govern the rights

and liabilities of the parties, [regardless] of the intent of the

parties at the time they entered into the contract, unless the

written language is not susceptible of a clear and definite

undertaking, or unless there is fraud, duress, or mutual

mistake.’” DSP Venture Grp., Inc. v. Allen, 830 A.2d 850,

852 (D.C. 2003) (quoting Geiger v. Crestar Bank, 778 A.2d

1085, 1091 (D.C. 2001)) (alteration in original). Our initial

task, then, is to determine whether the disputed language is

unambiguous. If so, we rely strictly on the terms of the

contract in ascertaining the parties’ intended meaning,

eschewing extrinsic evidence. See Tillery v. D.C. Contract

Appeals Bd., 912 A.2d 1169, 1171, 1178 (D.C. 2006). If, on

the other hand, we find that “the contract has more than one

reasonable interpretation and therefore is ambiguous,” then

we must consider extrinsic evidence to “determine what a

reasonable person in the position of the parties would have

thought the disputed language meant.” Id. at 1176. The

question of a contract’s ambiguity vel non is one we review

de novo. See Segar v. Mukasey, 508 F.3d 16, 22 (D.C. Cir.

2007).

At first blush, there is some facial appeal to Appellants’

proffered interpretation of the reversion clause. After all, the

ordinary meaning of the word “degree” denotes some

measure of proportionality. See, e.g., WEBSTER’S THIRD NEW

INTERNATIONAL DICTIONARY 594 (3d ed. 1981) (“degree”:

“the extent, measure, or scope of an action, condition, or

relation”); THE NEW OXFORD AMERICAN DICTIONARY 446 (2d

23

ed. 2005) (“degree”: “the amount, level, or extent to which

something happens or is present”). Given this, we agree that

the terms of the reversion clause do unambiguously

contemplate the possibility of some sort of partial reversion,

depending on the “degree” to which the Grants had been

funded at the time of reversion. But looking to the plain

language of the Grant Agreement—in particular, the

contract’s own definitions of the terms “Grants” and “Grant

Property”—the contract is equally unambiguous in

confirming that any such partial reversion would not be

measured in the sense Appellants urge.

The capitalized term “Grants” carries the same meaning

in the reversion clause as it does elsewhere in the Grant

Agreement—that is, the “Grants” identified are the

combination of the “First Grant” and the “Second Grant,” as

defined by the contract. The “First Grant” is itself defined as

the total amount CFF and Cafesjian donated for the

acquisition of the Bank Building (and an additional amount to

be used toward the creation of a memorial), and the “Second

Grant” is defined as the total amount CFF and Cafesjian

provided to purchase the Adjacent Properties. J.A. 461-63

(§§ 1.1-1.3, 2.1-2.3). In other words, the “Grants” referred to

in the Grant Agreement are already limited to the universe of

funds contributed by CFF or Cafesjian. Determining the

“degree” to which the “Grants” had been funded, therefore,

entails no consideration of the overall amount of funds used

to acquire the Bank Building, regardless of the source, as

Appellants’ argument presupposes. Appellants’ Reply Br. at

17 (“[H]e could have demanded the Grant Property ‘to the

degree’ that he had funded its purchase: $3.5 million of the

[total] $7.25 million purchase price of the Bank Building.”).

Instead, one would look solely to the degree that CFF and

Cafesjian had funded the “Grants” specified and enumerated

within the Grant Agreement. And so long as those amounts

24

were fully funded at the time of the reversion, any resultant

acquisition of the Grant Property under the reversion clause

would be unrestricted. (We note that this interpretation

refutes Appellants’ contention that their reading of the

reversion clause is the only interpretation that would give

meaning to the phrase “to the degree.”)

Equally unhelpful to Appellants’ proffered reading, we

think, is the contract’s definition of the term “Grant

Property,” which is identified as the “First Grant Property”

and the “Second Grant Properties,” together. The “Second

Grant Properties” are made up of the Adjacent Properties

(“1334-36, 1338, 1340, and 1342 G Street N.W.”), while the

“First Grant Property” is defined—quite importantly for

purposes of this discussion—as the entirety of the Bank

Building: “the property at 14th and G Streets, N.W.,

Washington, D.C., known as the National Bank of

Washington Building.” J.A. 461-62 (§§ 1.2, 2.2). Had the

parties sought to somehow delimit CFF’s and Cafesjian’s

rights to obtain a reversion of the Bank Building, one

approach might have been to define the “First Grant

Property” as a partial interest in the Bank Building

proportionate to CFF’s and Cafesjian’s relative contributions,

or something to that effect. Yet no such limitation appears in

the Grant Agreement.

With this understanding of the reversion clause in mind,

we conclude that, because the Grants were fully funded at the

time CFF exercised its reversionary rights, the District Court

correctly determined that CFF was entitled to take the “Grant

Property” in full, without any limitation or setoff. At the time

of oral argument, there was some uncertainty as to the timing

of a final balloon payment for the property at 1340 G Street

N.W.; the parties’ supplemental filings, however, confirmed

that this final payment was indisputably made before the

25

District Court’s May 2011 decision, when the court resolved

the scope of CFF’s reversion rights and ordered the transfer of

the Grant Property in full. Thus, the Grants were fully funded

by the time of the reversion. Furthermore, even if the

operative date by which the Grants must have been funded

was December 31, 2010—as Appellants’ counsel suggested at

argument—we would still see no basis to require a partial

reversion due solely to the timing of the final balloon

payment. The parties anticipated, at the time they signed the

Grant Agreement, that the final payment for 1340 G Street

would be paid in March 2011, which means they knew full

well that the final payment would come due after December

31, 2010. See J.A. 241-42 (Undisputed Facts, ¶ 39). The

only way to give meaning to the term “funded” in the Grant

Agreement is to understand that the parties anticipated this

final payment, if timely tendered, would constitute full

funding of the Grants within the meaning of the contract.

We recognize that Appellants put forth a variety of

extrinsic evidence to support their interpretation—evidence

surrounding the parties’ drafting history, supposedly helpful

trial testimony, and more. Setting aside the fact that these

arguments essentially surface for the first time in Appellants’

reply brief, we have no occasion to consider their extrinsic

evidence because the language of the reversion clause is

unambiguous on this point. Capital City Mortg. Corp. v.

Habana Village Art & Folklore, Inc., 747 A.2d 564, 570

(D.C. 2000) (“[U]nder no circumstances will extrinsic

evidence be admissible to reveal the subjective intent of a

party to a contract unambiguous on its face.”).

In sum, the terms of the Grant Agreement’s reversion

clause are unambiguous. In the event the museum project

was not substantially completed by December 2010, CFF

(and Cafesjian) held the contractual right to seek either the

26

return of the Grant funds or the transfer of the Grant Property.

And so long as the Grants promised by CFF and Cafesjian

were fully funded at the time, those rights were without

limitation or setoff, whether based on the parties’ share of the

contributions on the front end, the properties’ appreciated

value at the time of reversion, or otherwise. With the benefit

of hindsight, Appellants may now think this deal improvident,

but no sense of buyer’s remorse can empower us to rewrite

the plain terms of the contract to which they agreed. 10

IV.

One set of claims was found proven below: Cafesjian’s

and Waters’ claims for indemnification against AGM&M.

Under the AGM&M bylaws, the District Court held, both

Cafesjian and Waters were entitled to indemnification from

the corporation for expenses associated with defending

against AGM&M’s claims for breach of fiduciary duty, given

that those expenses were incurred because of their roles as

trustees and officers of AGM&M. In decrying this ruling,

Appellants advance two lines of argument, one broader and

one more targeted. On a broader level, they argue that any

award of indemnification was improper on these facts because

Cafesjian, proverbially speaking, fired the first shot, suing

AGM&M first. As for the specifics of the District Court’s

award, Appellants insist that even if some degree of

indemnification is appropriate, the amount awarded below

was unreasonable. We reject both contentions.

10

Just as they did below, Appellants also advance a hodgepodge of

tax-focused arguments in arguing that the reversion clause cannot

be enforced as written. We reject these arguments for the reasons

stated by the District Court. Armenian Assembly of Am., 772 F.

Supp. 2d at 147-50.

27

First, Appellants contend that indemnification is

improper altogether because the claims for breach of fiduciary

duty that AGM&M advanced were merely responsive to the

litigation initiated in the first place by Cafesjian. In their

view, because Cafesjian “started this case,” the resultant legal

expenses are a “self-inflicted wound,” Appellants’ Br. at 62-

63, which means that neither Cafesjian nor Waters can seek

indemnification associated with any claims that grew out of

the litigation. We are not persuaded.

The issue of indemnification in this case is governed by

the AGM&M bylaws. The bylaws provide, in relevant part,

that “the Corporation shall indemnify . . . any former Trustee

or officer of the Corporation . . . against any and all expenses

and liabilities actually and necessarily incurred by him or her

or imposed on him or her in connection with any claim,

action, suit or proceeding . . . in which he or she is . . . made a

party by reason of having been such Trustee [or] officer.”

J.A. 498 (§ 4.1) (emphasis added). The only carve-out from

mandatory indemnification occurs if the trustee or officer is

found “guilty of a criminal offense or liable to the

Corporation for damages arising out of his or her own

negligence or misconduct in the performance of a duty to the

Corporation.” Id. Given our earlier analysis, this solitary

exception finds no application here. And otherwise, the

bylaws do not draw any distinction between legal expenses

incurred in a purely defensive litigation capacity, and those

incurred in defending against claims filed only after the

trustee or officer first brought suit against the organization.

Nor do we perceive any other basis to draw such a distinction.

Irrespective of how these lawsuits originally began, the fact

remains that AGM&M chose to assert (rather wide-reaching)

claims against Cafsejian and Waters for breach of fiduciary

duty, and the fact remains that Cafesjian and Waters were

28

required to mount a defense to those claims. The legal fees

associated with their defense were thus “actually and

necessarily” incurred “in connection with” claims arising out

of their service as trustees or officers of AGM&M, and are

therefore subject to indemnification under the bylaws. J.A.

498. Appellants’ effort to escape liability by focusing on

Cafesjian’s plaintiff status in the first-filed lawsuit simply

finds no support in the law. See 3A FLETCHER CYC. CORP. §

1344, at 590-91 (2011 rev’d volume) (“Indemnification may

even be available where the director is the plaintiff in the

litigation.”). As such, the District Court rightly found that

some measure of indemnification in favor of Cafesjian and

Waters was proper, at least with respect to their defense of

AGM&M’s claims for breach of fiduciary duty. 11

Second, Appellants contest the amount of the District

Court’s indemnification award as excessive. “[T]he

determination of a reasonable fee award is for the trial court

in light of the relevant circumstances,” and we review that

determination “only for abuse of discretion.” Ideal Elec. Sec.

Co., Inc. v. Int’l Fidelity Ins. Co., 129 F.3d 143, 150 (D.C.

Cir. 1997). Although Appellants’ specific arguments take

several forms, the overarching theme is that the District Court

failed to ensure the fees awarded were “reasonable.” Our

review of the record leads us to the opposite conclusion.

11

Relatedly, Appellants assert that AGM&M became a private

foundation, and that indemnification in these circumstances is

forbidden under its bylaws as an act of self-dealing. We reject this

argument for the reasons given below. Even if the IRS had made a

determination that AGM&M was a private foundation, Treasury

regulations exclude the indemnification of former officers from the

ambit of self-dealing. See Armenian Assembly of Am., 772 F. Supp.

2d at 151-52 (citing 26 C.F.R. § 53.4941(d)-2(f)(3)).

29

To begin with, Appellants are correct that courts are

“‘obliged under District law to award only reasonable fees,’”

Ideal Elec. Sec. Co., 129 F.3d at 150 (quoting F.D.I.C. v.

Bender, 127 F.3d 58, 63 (D.C. Cir. 1997)) (emphasis added),

and we agree that this holds true whether attorneys’ fees are

awarded under a fee-shifting statute or pursuant to a

contractual indemnification provision (as here). Given this,

we reject at the outset Appellees’ argument that, simply

because the AGM&M bylaws do not explicitly limit a

covered indemnification award to one that is “reasonable,” no

such limitation applied. Irrespective of the specific language

used in the bylaws, District of Columbia law requires that a

fee award be reasonable. That said—and despite Appellants’

complaints to the contrary—we are satisfied that the District

Court made this necessary determination here, “ensuring the

overall award [was] reasonable.” Armenian Assembly of Am.,

924 F. Supp. 2d at 208.

In arguing otherwise, Appellants principally fault the

District Court for opting not to apply the Laffey matrix. See

Appellants’ Supp. Br. at 12-15. This contention misses the

mark. We certainly have approved of the Laffey matrix as a

useful tool in assessing reasonableness in some

circumstances. See, e.g., Covington v. District of Columbia,

57 F.3d 1101, 1109 (D.C. Cir. 1995). But so far as we can

tell, we have never employed the matrix, nor have we

explicitly affirmed its use, in a suit exclusively between

private parties. 12 And more importantly in any event, as we

made clear in Bender, for fees awarded pursuant to

contractual provisions under D.C. law, the discretion imbued

12

We realize, however, that the District of Columbia Court of

Appeals has affirmed a lower court’s reliance on the Laffey matrix

in such a case. See Campbell-Crane & Assocs., Inc. v.

Stamenkovic, 44 A.3d 924, 947-48 (D.C. 2012).

30

in the trial court in adjudging the reasonableness of a fee

award includes the ability to decide for itself “the nature and

amount of proof necessary to determine reasonableness.”

Bender, 127 F.3d at 64. That is, “the trial judge decides what

sort of proof, if any, is needed to determine what a reasonable

fee would be in any individual case”; in fact, we have gone so

far as to recognize that “a judge who has monitored the case

from its inception . . . can fix the amount of the fee without

hearing any evidence at all.” Id. (emphases added). Faced

with our precedent on these points, Appellants’ weighty

reliance on the District Court’s disregard for the Laffey matrix

gets them nowhere.

Otherwise, Appellants take particular issue with the

portion of the District Court’s indemnification award for

“blended” entries—that is, time entries that are partially, but

not exclusively, attributable to the defense of AGM&M’s

fiduciary-duty claims. They first insist that any degree of

indemnification for “blended” entries is impermissible, but

this argument is quickly dispelled by the Supreme Court’s

decision in Hensley v. Eckherhart, 461 U.S. 424 (1983),

which recognized that, where a party is entitled to a fee award

for only some of the claims involved in the litigation, “[t]he

district court may attempt to identify specific hours that

should be eliminated, or it may simply reduce the award to

account for the limited success.” Id. at 435-37. Appellants

also fault the 50% benchmark used to account for these

blended entries, but we perceive no abuse of discretion in the

adoption of this rate, which the District Court characterized as

“an optimum and reasonable percentage.” J.A. 1555; see also

Armenian Assembly of Am., 924 F. Supp. 2d at 209-10

(adopting recommendation).

In sum, the District Court made a determination that the

indemnification award was reasonable, and, contrary to

31

Appellants’ standpoint, it was not required to adhere to any

particular method in doing so. We have considered their

arguments, and we find no basis to disturb the

indemnification award.

V.

Appellants’ final challenges on appeal relate to two post-

trial motions filed with and rejected by the District Court.

Through the first, Appellants sought a new trial based on the

District Judge’s alleged conflict of interest in these

proceedings. Invoking the standards set forth in 28 U.S.C. §

455, Appellants specifically argued that the judge was biased

in favor of Cafesjian because the two had been donors (along

with others) of a glass sculpture to the Metropolitan Museum

of Art years prior, and because they supposedly otherwise

shared a general interest in fine glass art, especially sculptures

created by a particular artist, Stanislav Libensky. The District

Court turned aside this challenge, finding it not only

procedurally infirm, but also unfounded on the merits. We

agree with the District Court that no reasonable observer

would question a judge’s impartiality based on these

circumstances, 28 U.S.C. § 455(a), and we also agree that the

trial judge’s artistic interests could not have been substantially

affected by the case’s outcome, id. § 455(b)(5)(iii). See

Armenian Assembly of Am., 783 F. Supp. 2d at 87-93; cf.

McCann v. Commc’ns Design Corp., 775 F. Supp. 1535, 1543

(D. Conn. 1991) (Cabranes, J.) (denying recusal under § 455

where judge was a Yale trustee and judge’s wife was a Yale

professor and parent company of defendant had previously

made financial contributions to Yale).

Appellants’ second new-trial motion averred that certain

late-breaking developments revealed an undiscovered

financial bent in this litigation on Waters’ part. Underlying

32

this motion was a lawsuit Waters filed against Cafesjian in

March 2012, alleging (among other claims) that Cafesjian

failed to pay him a “special bonus” supposedly promised “in

the event of a positive outcome in the AGM&M litigation.”

J.A. 1581. These facts, Appellants surmised, undermined

Waters’ credibility and would have impacted the District

Court’s view of the claims litigated at trial, particularly the

claims for breach of fiduciary duty. 13 The District Court

disagreed, denying the motion under Federal Rule 60(b). We

review that decision for abuse of discretion, Summers v.

Howard Univ., 374 F.3d 1188, 1192 (D.C. Cir. 2004), and we

uncover none here.

We have said before that, to secure relief under Rule

60(b), a litigant must establish not only that one of the rule’s

13

Appellants additionally bring to our attention that, in August

2013, Waters was indicted by the U.S. Attorney for the District of

Minnesota on 26 counts of mail and wire fraud, income tax

evasion, and other charges, relating to his alleged embezzlement of

millions of dollars from Cafesjian and CFF. See Appellants’ Supp.

Br. at 7. We note further that a jury has since convicted Waters on

all but one of those counts. See United States v. Waters, No. 13-cr-

203, Jury Verdict (Dkt. No. 93) (D. Minn. Mar. 5, 2014). Aside

from a passing reference to these developments, however,

Appellants do not even attempt to explain how Waters’ indictment

would have justified a new trial under Rule 60(b). As best we can

discern, the only conceivable import of this information might

relate to Waters’ indemnification rights under the AGM&M bylaws

(as he was found “guilty of a criminal offense,” J.A. 498), but

Appellants do not press this argument. And even if they did make

such an argument, the theory strikes us as a non-starter in any event

because Waters’ wrongdoing involved funds supposedly siphoned

away from CFF and Cafesjian, not AGM&M. See id., Redacted

Indictment (Dkt. No. 92) (D. Minn. Mar. 5, 2014). So while

Waters’ criminal troubles are certainly an interesting development,

they have no bearing on our resolution of these appeals.

33

enumerated grounds for relief is satisfied, but also some

“actual prejudice” flowing from the supposed misconduct or

other circumstances claimed to warrant relief. Summers, 374

F.3d at 1193; accord In re Hope 7 Monroe St. Ltd. P’ship,

743 F.3d 867, 875 (D.C. Cir. 2014) (reiterating that a movant

must show it was foreclosed from making a “full and fair

preparation or presentation of its case”). Appellants cannot

identify any such prejudice here. In resolving Appellants’

Rule 60(b) motion, the District Court explained that it did not

rely on Waters’ credibility in rendering its decision at trial.

Instead, the District Court explained, it grounded its decision

as much as possible on documentary evidence, rather than the

testimony of witnesses, given that most of the witnesses had

some personal stake in the outcome of the trial. Armenian

Assembly of Am., 924 F. Supp. 2d at 195. Even more to the

point, the District Court explicitly stated that it “analyzed the

initial trial record knowing that Waters had a personal

financial stake in the outcome of the case.” Id. at 196.

Appellants do not identify even a single instance in which the

District Court credited Waters’ testimony over the testimony

of their witnesses, nor do they point to any aspect of the

decision below that signals any sort of meaningful reliance on

Waters’ credibility. Simply put, the District Court reasonably

explained that the newly surfaced allegations surrounding an

undisclosed financial arrangement between Waters and

Cafesjian would not have altered its findings. That ruling can

hardly be characterized as an abuse of discretion. 14

14

We also believe the District Court acted well within its

discretion insofar as it denied the Rule 60(b) motion on the grounds

that the only form of “evidence” Appellants presented to support

this theory consisted of allegations in Waters’ unverified complaint,

which, of course, are not evidence at all. See Coward v. ADT Sec.

Sys., Inc., 194 F.3d 155, 161 (D.C. Cir. 1999) (Williams, J.,

concurring in part and dissenting in part) (“[A]llegations are

notoriously not evidence.”).

34

VI.

Appellants raised the lion’s share of issues joined for our

review on appeal; thus far, we have focused on their

arguments, and we reject them for the reasons stated. But

Appellees, for their part, also elected to cross-appeal the

District Court’s ruling concerning the Assembly’s lease of

space in one of the Adjacent Properties—the “Families USA

building,” located at 1334-36 G Street N.W. Dissatisfied with

the District Court’s determination that the Assembly’s lease

was and remains valid, Appellees make several arguments in

urging reversal. We are not persuaded.

First, Appellees argue that the Assembly’s lease, which

was originally executed in May 2009, was invalid from the

get-go. This is so, they say, because the lease’s purpose did

not adhere to the limited property uses permitted under the

Grant Agreement. This argument turns on Appellees’

contention that AGM&M’s lease of space, even if designed to

generate revenue for the museum’s development, cannot be

considered a property use that is “part of” the museum

project, as specified in the Grant Agreement. See J.A. 463 (§

3.1(A)). Said differently, we understand their theory to be

that AGM&M, in leasing the property to the Assembly,

exceeded the power authorized it under the Grant Agreement.

Under District of Columbia law, it is Appellees’ burden, as

the parties challenging a corporate act, to show that AGM&M

acted beyond the scope of its authority. See Green Leaves

Rest., Inc. v. 617 H St. Assocs., 974 A.2d 222, 230 (D.C.

2009); Hodge v. Evans Fin. Corp., 823 F.2d 559, 568 (D.C.

Cir. 1987) (applying D.C. law). And in striving to do so here,

they seem to suggest that the only way the property could be

used “as part of” the museum project—and thus remain

faithful to the Grant Agreement—is if the property physically

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housed some portion of the museum’s structure or grounds;

an ancillary use of the property for fundraising purposes,

Appellees suggest, cannot suffice. We reject this restrictive

reading. The plain language of the Grant Agreement

provision on which they rely does not foreclose a lease of one

of the Adjacent Properties to raise funds for the museum

project, as the District Court found was AGM&M’s purpose

here. Armenian Assembly of Am., 772 F. Supp. 2d at 101

(“The Building & Operations Committee also tried to raise

funds by leasing space in the Families U.S.A. building.”).

Appellees thus fall short of their burden to show that

AGM&M exceeded its authority in entering into the lease.

Second, and relatedly, Appellees contend that

AGM&M’s lease agreement with the Assembly was ultra

vires because it was never properly approved by AGM&M.

We think this argument squarely foreclosed by the District

Court’s factual findings. Id. at 125 (“[T]he record shows that

the Assembly’s lease in the Families U.S.A. building was

approved by the Building and Operations Committee, which

was delegated authority to manage the Properties by the

AGM&M Board.”). Appellees point to nothing in the record

that would cause us to upend these findings as clear error.

Third, Appellees argue that, even if it was proper for

AGM&M to lease the Families USA building to the

Assembly in the first place, the District Court was wrong in

not applying equitable remedies to void the Assembly’s

continued lease after the property was transferred to CFF per

the reversion clause. We see two problems with this theory.

For one, as Appellants note, it seems Appellees failed to

advance these equitable arguments in the District Court and

thus now face a forfeiture problem. Byers, 740 F.3d at 681;

Figueroa, 633 F.3d at 1133 n.3. Appellees insist otherwise,

but the generic and cursory references they point to in their

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filing below—for instance, asking the court to “alter, amend,

or make additional legal, equitable, and/or factual rulings”

concerning its decision on the lease, see Appellees’ Reply Br.

at 17 (emphasis in original)—are a far cry from properly

pressing their equitable arguments at the trial-court level.

Additionally, even if these theories are not deemed forfeited

per se, our review of the District Court’s application of

equitable principles is for abuse of discretion, see

Massachusetts v. Microsoft Corp., 373 F.3d 1199, 1207 (D.C.

Cir. 2004), and we identify none, particularly since the

briefing below never truly afforded the District Court the

chance to pass on these arguments in the first place.

Based on the foregoing, we reject the notion that the

Assembly’s lease in the Families USA building is invalid.

VII.

This legal saga has been long-lived. What began as a

single lawsuit to collect on an unpaid promissory note quickly

escalated into a morass of litigation. More than seven years

and millions of dollars in legal fees later, much of the parties’

work to achieve their dream of a museum appears to have

been for naught, which is regrettable. Whatever happens

next, hopefully our decision today can at least serve as the last

word on this dispute’s protracted journey through the courts.

For our part, we have considered all of the parties’

arguments. The judgment and post-judgment rulings of the

District Court are affirmed.

So ordered.

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