Michael Francis and Queue, LLC v. Munir Rehman and HAK, LLC

Notice: This opinion is subject to formal revision before publication in the

Atlantic and Maryland Reporters. Users are requested to notify the Clerk of the

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volumes go to press.

DISTRICT OF COLUMBIA COURT OF APPEALS

No. 14-CV-190

MICHAEL FRANCIS and QUEUE, LLC, APPELLANTS,

v.

MUNIR REHMAN and HAK, LLC, APPELLEES.

Appeal from the Superior Court

of the District of Columbia

(CAB-473-13)

(Hon. Natalia M. Combs Greene, Motion Judge)

(Submitted November 6, 2014 Decided February 26, 2015)

Earl “Trey” Mayfield and Michael P. Lewis were on the brief for appellants.

Matthew August LeFande was on the brief for appellees.

Before GLICKMAN and THOMPSON, Associate Judges, and PRYOR, Senior

Judge.

THOMPSON, Associate Judge: In January 2013, plaintiffs/appellants Michael

Francis and Queue, LLC (“Queue”) brought suit against defendants/appellees

Munir Rehman and HAK, LLC (“HAK”), alleging breach of contract, unjust

enrichment, breach of fiduciary duties, and fraud and seeking an accounting. After

the Superior Court dismissed certain of the claims and afforded appellants leave to

2

amend their fraud claim, appellants voluntarily dismissed the remaining claims,

positioning themselves to bring this appeal challenging the court’s order that

granted in part appellees’ motion to dismiss. Although a developed record might

show that appellees are entitled to judgment on the ground that the underlying

contract (for “design services”) was unenforceable because appellant Francis

lacked a license to practice architecture in the District of Columbia, we are

persuaded that the court could not so determine at the motion-to-dismiss stage.

Accordingly, we reverse the judgment and remand for further proceedings.

I. Background

Appellants alleged the following in their First Amended Complaint.

Appellant Francis is the owner and operator of appellant Queue and is a minority

owner of HAK. Appellee Rehman is a nightclub and restaurant developer and the

controlling owner of HAK, which operates a bar/restaurant/nightclub establishment

at 1219 Connecticut Avenue, N.W. (“1219 Connecticut”).

3

In 2008, Francis and Queue agreed to provide “design services” for

Rehman’s then-new 1219 Connecticut venture. Appellants were “to be

compensated through profits obtained with Mr. Francis as a co-owner of the

business. Specifically, Francis and Rehman agreed that Francis would be

reimbursed for his actual expenses in obtaining the various services, would be paid

a fee of $25,000, and would have a 2.5% ownership interest in HAK. The “design

services consisted of . . . obtaining design services from a licensed architect and

third party consultant services[,]” such as those of lighting designers and structural

engineers. The First Amended Complaint further alleges that, “[w]ith [Rehman’s]

knowledge and consent,” Francis “obtained those designs from Jerald Clark, a

licensed architect in the District of Columbia.” It avers that “[a]ll design drawings

provided for Mr. Rehman’s projects by Architect Clark were prepared under his

direct supervision and responsibility [and] bore his seal[.]” Appended to the First

Amended Complaint is a copy of a March 2009 Joint Ownership Agreement, under

which, in exchange for receiving a 2.5% ownership interest in HAK, appellant

Francis was to “contribute his time, talent, and resources to performing the

architectural work in designing and building out any space or spaces in the

premises at 1219 Connecticut Avenue[.]”

4

According to the First Amended Complaint, Francis obtained the services of

Clark and “advanced the expenses for[] third party consultants[,]” and design work

on the 1219 Connecticut project was completed by late 2009, but Rehman paid

Francis only a $15,000 fee, failed to pay Francis any of the profits of HAK or to

provide its financial records, and failed to reimburse Francis for expenses.

The First Amended Complaint further alleges that Rehman and Francis

entered into another agreement, which was never memorialized in writing, under

which Francis would provide similar services in connection with a Rehman

establishment located at 1223 Connecticut Ave., N.W. (“1223 Connecticut”).

Under the agreement, Rehman was to “cover expenses [Francis] incurred in the

design” and Francis was to receive “a 5% ownership interest in [the 1223

Connecticut establishment] in exchange for over $125,000.00 in services obtaining

the designs from Architect Clark and procuring third party consultants for those

designs.” The Complaint avers that appellants provide the contracted-for services,

that Francis “loaned funds to [Rehman] in the form of payments to third party

consultants for [the project] . . . with the express agreement that [Rehman] would

reimburse those loans[,]” and that the 1223 Connecticut establishment opened in

2010, but that Rehman has not repaid the loans and Francis has not been paid any

profits owed to him.

5

Appellants filed their Initial Complaint on January 22, 2013, and their First

Amended Complaint on May 8, 2013. Count I of the First Amended Complaint

alleges that appellees breached the contract relating to 1219 Connecticut. Count II

alleges that appellees breached the contract relating to 1223 Connecticut.

Although captioned “Unjust Enrichment (1223 Connecticut),” Count III alleges

that appellants conferred benefits on appellees by providing services and

advancing expenses for both the 1219 Connecticut and 1223 Connecticut ventures

and that appellees have been unjustly enriched by retaining those benefits. Counts

IV and V allege breach of fiduciary duty. Count IV is based on Rehman’s failure

to reimburse Francis in connection with the 1219 Connecticut project and to pay

him his share of HAK profits. Count V is premised on appellees’ failure to

reimburse appellants and to pay Francis profits in connection with the 1223

Connecticut project. Count VI alleges fraud based on appellees’ false

representations that Francis and Queue would be compensated and reimbursed as

described above.

Appellees moved to dismiss the First Amended Complaint pursuant to

Super. Ct. Civ. R. 12 (b)(6) for failure to state a claim upon which relief may be

granted. On July 17, 2013, the Superior Court judge (the Honorable Natalia M.

6

Combs Greene) granted the motion to dismiss Count I, reasoning that “Plaintiff

Francis is not a licensed architect” and that “negotiat[ing] a contract to provide

architectural services while not licensed as an architect is sufficient to void [a]

contract.1 For the same reason, Judge Combs Greene also dismissed Count IV,

reasoning that the breach of fiduciary duty claim for the 1219 Connecticut project

arose out of the “void and unenforceable” contract for architectural and design

services. Judge Combs Greene declined to dismiss Count II and related Count V,

reasoning that she could not determine whether the terms of the oral agreement

related to the 1223 Connecticut project were the same as the terms of the “void and

unenforceable” 1219 Connecticut agreement. In addressing the Count III unjust

enrichment claims for “[b]oth [p]rojects,” Judge Combs Greene stated that an

unlicensed architect or interior designer “cannot collect monies due on a quasi-

contractual basis[,]” but declined to dismiss the count because the “circumstances

under which the money was loaned . . . are unclear.”2 Finally, Judge Combs

1

The court also reasoned that the allegation about the supervision and

approval of an architect licensed in the District of Columbia “has no bearing on the

merit of the claim[] [as] [n]either the case law, nor the [r]egulations make an

exception for unlicensed architects or interior designers who are supervised by a

D.C.-licensed professional.”

2

The court explained that it was not clear whether Francis loaned Rehman

money “in his professional capacity” or whether the loan was “directly tied to the

written agreement.” Appellants assert that the court “dismissed Count III in part,

to the extent it sought compensation for design services Francis had provided for

(continued…)

7

Greene determined that appellants had not pled their fraud count (Count VI) with

specificity, and ruled that appellants would be afforded the opportunity to submit a

more definite statement as to that count.

Subsequently, appellants filed a Second Amended Complaint, eliminating

the dismissed counts, renumbering the remaining counts, and providing specificity

regarding the fraud claim. Appellees again moved to dismiss. Judge Combs

Greene denied the motion to dismiss. However, explaining that the court’s July

17, 2013, ruling had “effectively gutted” their case, and in order to expedite an

appeal of the portions of that ruling that dismissed the claims that appellants assert

are their “primary claims,” appellants thereafter moved to voluntarily dismiss

without prejudice all the counts set forth in their Second Amended Complaint. 3 On

January 10, 2014, the Honorable Robert Okun, to whom the matter had been

(…continued)

either property, but left intact his claim for the amounts he had loaned Rehman to

pay consultants.” We agree with this reading of the July 17, 2013, order.

3

Appellants did not forfeit their right to challenge the July 17, 2013, order

by filing the Second Amended Complaint that removed the dismissed claims. See

Young v. City of Mt. Ranier, 238 F.3d 567, 572-73 (4th Cir. 2001) (“[I]if a claim is

dismissed without leave to amend, the plaintiff does not forfeit the right to

challenge the dismissal on appeal simply by filing an amended complaint that does

not re-allege the dismissed claim.”).

8

reassigned, granted the motion, and this appeal from Judge Combs Greene’s July

17, 2013, ruling followed.4

Because appellants voluntarily dismissed the counts included in the Second

Amended Complaint, the only issues on appeal are whether Judge Combs Greene

erred in dismissing appellants’ claims for breach of contract, for unjust enrichment

insofar as that claim was based on appellants’ services (rather than advances of

money), and for breach of fiduciary duty in connection with the 1219 Connecticut

project, all as set out in the First Amended Complaint.5 Our review is de novo.

4

After appellants filed their motion to voluntarily dismiss, appellees filed a

motion for summary judgment as to the claims in the Second Amended Complaint

as well as a motion for sanctions. Because Judge Okun granted appellants’ motion

to voluntarily dismiss, he denied appellees’ summary judgment motion as moot.

He did not rule on appellees’ motion for sanctions. Although appellees argue that

this court should rule that the claims appellants voluntarily dismissed are time-

barred and that appellants’ voluntarily dismissed fraud claim was not cognizable,

we do not consider those arguments since appellees did not appeal from Judge

Okun’s order denying as moot their motion for summary judgment.

5

Appellees argue that we can uphold the July 17, 2013, judgment on the

ground that appellees were entitled to summary judgment on the claims that Judge

Combs Greene dismissed under Rule 12 (b)(6). They contend that there would be

no procedural unfairness in doing so since appellants “had notice of the ground

upon which affirmance is proposed, as well as an opportunity to make an

appropriate factual and legal presentation with respect thereto” when appellants

filed their opposition to the motion for summary judgment. Appellees’ Brief at 14

(quoting In re Walker, 856 A.2d 579, 586 (D.C. 2004) (per curiam). However,

appellees moved for summary judgment only as to the “remaining claims,” i.e., the

claims that were voluntarily dismissed, not as to the claims that are before us now.

(continued…)

9

See Chamberlain v. American Honda Fin. Corp., 931 A.2d 1018, 1022 (D.C.

2007).

II. Applicable Law

A court considering a Rule 12 (b)(6) motion must “construe the complaint in

the light most favorable to the plaintiff by taking the facts alleged in the complaint

as true.” Pietrangelo v. Wilmer Cutler Pickering Hale & Dorr, LLP, 68 A.3d 697,

709 (D.C. 2013). “[A] defendant raising a 12 (b)(6) defense cannot assert any facts

which do not appear on the face of the complaint itself.” Carey v. Edgewood

Mgmt. Corp., 754 A.2d 951, 954 (D.C. 2000). “When the trial court decides a

Rule 12 (b)(6) motion by considering factual material outside the complaint, the

motion shall be treated as if filed pursuant to Rule 56, which permits the grant of

summary judgment if there are no material facts in dispute and the movant is

entitled to judgment as a matter of law.” Kitt v. Pathmakers, Inc., 672 A.2d 76, 79

(D.C. 1996). However, “when treating a Rule 12 (b)(6) motion as a motion for

summary judgment, where outside factual material is not excluded, the trial court

(…continued)

Therefore, even assuming arguendo that appellees’ arguments that they were

entitled to summary judgment on all of appellants’ claims have merit,

“considerations of procedural fairness preclude us from affirming on the ground

now being asserted[.]” Walker, 856 A.2d at 586.

10

must give the parties notice of its intention to consider summary judgment and an

adequate opportunity to present affidavits or other matters appropriate to a ruling

on such a motion.” Washkoviak v. Sallie Mae, 900 A.2d 168, 178 (D.C. 2006)

(internal quotation marks omitted); see also Herbin v. Hoeffel, 727 A.2d 883, 886-

87 (D.C. 1999) (“[F]or the trial court to have relied on those facts outside the

complaint, without notifying Herbin that it intended to do so and giving him an

opportunity to present additional material relevant to a summary judgment motion,

is reversible error.”).

“[D]ismissal under Rule 12 (b)(6) is appropriate where the complaint fails to

allege the elements of a legally viable claim.” Chamberlain, 931 A.2d at 1023.

“To prevail on a claim of breach of contract, a party must establish (1) a valid

contract between the parties; (2) an obligation or duty arising out of the contract;

(3) a breach of that duty; and (4) damages caused by breach.” Tsintolas Realty Co.

v. Mendez, 984 A.2d 181, 187 (D.C. 2009) (emphasis added). However, to state a

claim for breach of contract so as to survive a Rule 12 (b)(6) motion to dismiss, it

is enough for the plaintiff to describe the terms of the alleged contract and the

nature of the defendant’s breach. Nattah v. Bush, 605 F.3d 1052, 1058 (D.C. Cir.

2010) (reasoning that plaintiff was not required to assert in the complaint that the

individuals who made oral promises to him had authority to contract on behalf of

11

the defendant company). To state a claim, a complaint need not assert that the

alleged contract is legal in all respects; rather, illegality is an affirmative defense.

See Super. Ct. Civ. R. 8 (c); cf. Rock River Commc’ns, Inc. v. Universal Music

Grp., Inc., 745 F.3d 343, 350 (9th Cir. 2014) (“[I]llegality is an affirmative defense

to be pled in the defendant’s answer[.]”); Abbas v. Dixon, 480 F.3d 636, 640 (2d

Cir. 2007) (“The pleading requirements . . . do not compel a litigant to anticipate

potential affirmative defenses, . . . and to affirmatively plead facts in avoidance of

such defenses.”); 5 Charles Alan Wright & Arthur R. Miller, FED. PRACTICE AND

PROCEDURE § 1276 (3d ed. 2002); McNamara v. Picken, 866 F. Supp. 2d 10, 17

(D.D.C. 2012) (“The plaintiff was not required to anticipatorily negate that defense

in his pleadings, and thus the Court cannot conclude, as a matter of law, that

plaintiff cannot prove any set of facts entitling him to relief.”) (internal quotation

marks omitted); Harris v. Bucher, 143 P. 796 (Cal. Ct. App. 1914) (“[I]n an action

brought by one practicing architecture to recover for services rendered, it is not

necessary to allege and prove compliance with the act regulating the practice of

architecture, but that noncompliance therewith is a matter of defense to be pleaded

and proved by defendant in the action.”). An affirmative defense such as illegality

can be the basis for granting a Rule 12 (b)(6) motion to dismiss “only when the

[defense] is established on the face of the complaint.” Hafley v. Lohman, 90 F.3d

264, 266 (8th Cir. 1996).

12

D.C. Code § 47-2853.63 (2012 Repl.) provides that “unless licensed to

practice architecture . . . no person shall engage, directly or indirectly, in the

practice of architecture in the District[.]” The statute defines the term “practice of

architecture” to mean “rendering or offering to render services in connection with

the design and construction, enlargement, or alteration of a structure . . . that ha[s]

as [its] principal purpose human occupancy or habitation, as well as the space

within and surrounding the[] structures.” Id. at § 47-2853.61; see also 17

D.C.M.R. § 3410.1 (2008) (same). “These services include planning and providing

studies, designs, drawings, specifications, and other technical submissions, and the

administration of construction contracts.”6 D.C. Code § 47-2853.61; see also 17

D.C.M.R. § 3410.1 (same). This court held in Sturdza v. United Arab Emirates,

11 A.3d 251 (D.C. 2011), that the “practice of architecture” “encompasses not only

the performance of architectural services, but also any negotiations and agreement

to provide such services.” Id. at 255.

6

Similarly, District of Columbia regulations require a license to practice

interior design, which encompasses, “providing or offering to provide

consultations, preliminary studies, drawings, specifications, or any related service

for the design analysis, programming, space planning, or aesthetic planning of the

interior of buildings[.]” 17 D.C.M.R. §§ 3201.2, 3209.1 (2008); D.C. Code § 47-

2853.101 (2012 Repl.).

13

The architect licensure requirement is intended “to safeguard life, health,

and property, and to promote the public welfare.” Id. at 254-55 (internal quotation

marks omitted); see also Holiday Homes, Inc. v. Briley, 122 A.2d 229, 231 (D.C.

1956) (“The Architect’s Registration Act . . . is a regulatory act designed for the

public welfare[.]”). “[A] contract made in violation of a licensing statute that is

designed to protect the public will usually be considered void and unenforceable,

and [the] party violating the statute cannot collect monies due on a quasi-

contractual basis either.” Sturdza, 11 A.3d at 257 (internal quotation marks

omitted).

While cases in some other jurisdictions explicitly recognize that an

unlicensed entity may contract to provide architectural services through a licensed

architect,7 this court has not addressed whether an individual or firm must be

7

See, e.g., McIver-Morgan, Inc. v. Dal Piaz, 964 N.Y.S.2d 515, 516, 519

521 (N.Y. App. Div. 2013) (affirming contract arbitration award in favor of firm

that “specializ[ed] in all facets of high-end residential interior design and

architectural services,” even though the firm was not a professional corporation

and had no license to practice architecture, because the firm engaged as a

consultant a licensed and registered architect who “had a substantive, active role in

the provision of architectural services,” and because the law requiring a license to

practice architecture was not to be “‘slavishly applied’”) (citing SKR Design Grp. v

Yonehama, Inc., 660 N.Y.S.2d 119, 122 (N.Y. App. Div. 1997) (“That a contractor

engages the services of a licensed professional to perform a portion of the services

covered by the contract does not convert that contract into one for the performance

(continued…)

14

licensed as an architect in the District of Columbia in order to contract to perform

architectural work through or under the supervision of a licensed architect. There

are, however, authorities in this jurisdiction that imply that an individual without a

license to practice architecture in the District of Columbia may, at least under some

circumstances, prepare architectural drawings under the supervision of a licensed

architect. See Sturdza v. United Arab Emirates, 281 F.3d 1287, 1302 (D.C. Cir.

2002) (rejecting Sturdza’s argument that her contract claims were not barred

because, under an explicit exception contained in a prior statute, unlicensed

architects were permitted to “prepare technical submissions . . . under the direct

supervision of an architect licensed in the District”; reasoning that “[a]lthough

Sturdza apparently did collaborate to some extent with a D.C. architect, . . . she

never alleges that she was under his direct supervision”); DCRA v. Keys, No. CR-I-

08-S701302, 2009 D.C. Off. Adj. Hear. LEXIS 121, at *17-18 (OAH Aug. 28,

2009) (“Given the stringent regulatory provisions in place in the District of

Columbia, an unlicensed architect should not be receiving compensation for work

(…continued)

of those services.”)); Walter M. Ballard Corp. v. Dougherty, 106 Cal.App.2d 35,

40-41 (Cal. Dist. Ct. App. 1951) (“The act does not forbid a corporation to employ

certified architects, have them prepare plans and specifications, and then furnish

such plans and specifications to other persons . . . [T]hat the partnership may

contract and collect for architectural services as long as licensed architects perform

the work; and the fact that nonlicensed contractors thus share in architectural fees

is immaterial.”).

15

such as design drawings, technical submissions and administering contracts

without the supervision of a licensed architect or licensed architectural firm.”); 17

D.C.M.R. § 3413.5 (“No licensed architect shall affix his or her seal or signature to

any technical submission that was not prepared by him or her or under his or her

direct supervision or by another licensed architect and reviewed, approved, or

modified and adopted under his or her direct supervision.”) (implying, we think,

that the individual preparing a technical submission under the supervision of the

licensed architect need not be “another licensed architect”); 17 D.C.M.R. §

3411.14 (“Each office located in the District of Columbia maintained for the

preparation of drawings, specifications, reports, or other professional work shall

have a licensed architect who is regularly employed at the office and who directly

supervises such work.”).

We also note that 17 D.C.M.R. § 3403.1(b) provides that an individual

applying for an architect’s license by examination must “[s]atisfy the Intern

Development Program (IDP) training requirements,” i.e., “[t]he current version of

the Intern Development Program as established and administered by NCARB [the

National Council of Architectural Registration Boards].” 17 D.C.M.R. § 3499.

According to the NCARB website, the IDP requires an intern to obtain, inter alia,

a minimum of 1860 hours of experience in the practice of architecture under the

16

supervision of a licensed architect. See NCARB, Intern Development Program

Guidelines, 10 (2014), http://www.ncarb.org/en/Experience-Through-

Internships/~/media/Files/PDF/Guidelines/IDP_Guidelines.pdf. In other words,

the regulatory scheme prescribes that an unlicensed architect must engage in the

practice of architecture (under the supervision of a licensed architect) to obtain

licensure.8 It thus cautions against a too-literal interpretation of D.C. Code § 47-

2853.63 that does not take into account whether design work was performed under

the supervision of a licensed architect. It suggests that “a commonsense approach

to the operative facts should dictate” our analysis of whether the services at issue

in this case implicate the prohibition described in D.C. Code § 47-2853.63. See

McIver-Morgan, 964 N.Y.S.2d at 519; see also cases cited supra note 7; cf.

Highpoint Townhouses, Inc. v. Rapp, 423 A.2d 932, 934 n.2 (D.C. 1980) (“The

public protection inherent in the plumbing licensing statutes arguably would be

met by an unlicensed subcontractor working ‘under the immediate personal

supervision’ of another, licensed subcontractor.”).

8

We note that, in the Second Amended Complaint, appellants alleged that

Francis “was being mentored by D.C.-licensed architect Jerald Clark while Mr.

Francis was in the process of registering” for the IDP through the NCARB.

17

III. Analysis

In this case, Judge Combs Greene granted appellees’ Rule 12 (b)(6) motion

to dismiss because “[t]he First Amended Complaint and Plaintiffs’ response do not

contain facts sufficient for the Court to find that a valid contract was formed

between the parties.” July 17, 2013, Order at 4. The court explained first that

“Plaintiff Francis is not a licensed architect” and that “any agreement that he

‘negotiat[ed]’ or entered into for the provision of architectural, interior design, or

design service is ‘void and unenforceable.’” July 17, 2013, Order at 4 (quoting

Sturdza, 11 A.3d at 252-57).

However, nowhere in the First Amended Complaint did appellants state that

appellant Francis is not licensed as an architect in the District of Columbia, 9 or

acknowledge that the contracted-for services entailed work by Francis for which he

9

For that fact (which Francis concedes), the court relied on appellees’

motion to dismiss. As appellants argued in their opposition to the motion to

dismiss, the motion relied on “facts, inferences and assumptions not in the

Complaint.”

18

was required to have an architect’s license.10 Further, to state a claim, appellants

were not required to plead Francis’s licensure status or to plead that the contract

was for work that appellants could lawfully perform, in order to anticipatorily

negate the affirmative defense of illegality. And, given the allegation in the First

Amended Complaint that the contracted-for “design services consisted of . . .

obtaining design services from a licensed architect” and that “[a]ll design drawings

provided for Mr. Rehman’s projects by Architect Clark were prepared under his

direct supervision and responsibility, [and] bore his seal,” we cannot agree with

Judge Combs Greene that the face of the First Amended Complaint made it

apparent that appellants offered to provide and provided services for which they

were required to hold a District of Columbia architect’s license. Appellants’

allegations in the First Amended Complaint that they contracted to provide “design

services” for appellees’ ventures and the statement in the Joint Ownership

Agreement (appended to the First Amended Complaint) that appellant Francis was

to “contribute his time, talent, and resources to performing the architectural work

in designing and building out any space or spaces in the premises at 1219

Connecticut Avenue” are not facially inconsistent with a claim that architectural

10

Instead, appellants alleged in the First Amended Complaint that they

“obtained . . . designs from Jerald Clark, a licensed architect in the District of

Columbia.”

19

services were provided only through or under the supervision of a licensed

architect.

We conclude that before the court could “find that [no] valid contract was

formed between the parties,” it was obligated to treat appellees’ motion as a

motion for summary judgment and to afford appellants an opportunity to come

forward with affidavits, documentation,11 or other evidence to establish precisely

what work appellants negotiated to perform and performed. The court was

required to “evaluate this dispute with great attention to detail in order to determine

whether [appellants’] services were of the . . . type which the state reserves to

licensed [architects].” 12 Rudow v. Holly Radio Co., No. 88-3001, 1989 U.S. Dist.

LEXIS 4995, *4, 5 (D.N.J. May 3, 1989) (holding, in case where the asserted

defense to plaintiff’s contract action to recover fees for his “professional services”

11

For example, appellants should be afforded an opportunity to document

their claim that the drawings provided pursuant to the contract bore the seal of

licensed architect Clark. We note that “[a] licensed architect shall not sign or seal

technical submissions unless they were prepared by the architect or under his or

her direct supervision[,]”17 D.C.M.R. § 3411.15, and that “[t]he seal appearing on

any technical submission shall be prima facie evidence that the technical

submission was prepared by or under the direct supervision of the individual

named on the seal.” 17 D.C.M.R. § 3413.3.

12

One relevant circumstance here might be appellant Francis’s status as a

partial owner of HAK, a status in which he at least arguably was entitled to convey

to a licensed architect, through drawing or otherwise, his concepts for the design of

the 1219 Connecticut establishment.

20

was that the “professional services” were for the unlicensed practice of law in

New Jersey and that the contract was therefore illegal and unenforceable, that

“questions of unlawful practice of law will turn on the particular facts presented,”

that the issue could “be determined only on a full and complete appreciation of the

events and surrounding circumstances,” that the trial court not “evaluate the merits

of [appellees’] affirmative defense without reference to matters outside the

pleadings[,]” and therefore, that judgment on the pleadings was not warranted)

(internal quotations and brackets omitted); see also Dunn v. Finlayson, 104 A.2d

830, 832-33 (D.C. 1954) (reasoning, in case in which the contract sued upon

contained a provision by which an architect “agree[d] to prepare all contracts

between the Owner and the various sub-contractors” and the defendant owner

argued that the agreement was illegal because the plaintiff architect “undertook to

render legal services” even though he was not a lawyer, that there was nothing in

the record to show precisely what the architect did in preparing the contracts, and

holding that “[u]nder these circumstances we cannot hold that [the architect] either

agreed to or did engage in the unauthorized practice of the law”).

Appellees argue that the new factual allegations contained in the First

Amended Complaint (such as the allegation that appellants performed work under

the direct supervision of a licensed architect) are irreconcilable with the allegations

in the Initial Complaint, which appellees assert appellants changed in order to

21

respond to the motion to dismiss. Appellees assert that the “irreconcilable”

allegations of the First Amended Complaint “must be disregarded” and only the

allegations in the Initial Complaint accepted as true for purposes of analysis.

However, “‘[o]nce an amended pleading is interposed, the original pleading no

longer performs any function in the case[.]’” Hayward v. Cleveland Clinic Found.,

759 F.3d 601, 617 (6th Cir. 2014) (quoting 6 Charles Alan Wright & Arthur R.

Miller, FEDERAL PRACTICE AND PROCEDURE § 1476 (3d ed. 2002)). We also do not

agree that the allegations in the Initial Complaint and the First Amended

Complaint are irreconcilable; the allegations that appellants “provided design

services” to appellants and “performed design services” for appellee Rehman’s

ventures, Initial Complaint ¶¶ 1, 7, do not necessarily conflict with the allegation in

the First Amended Complaint that “[t]hose design services consisted of

[appellants] obtaining design services from a licensed architect[.]”13 First

Amended Complaint ¶ 8.14 Moreover, even if the trial court or we are inclined to

13

This is especially so since both complaints allege that the expenses

Francis incurred “in the course of designing” the venues include sums spent for

“Design Consultants.” Initial Complaint ¶ 13; First Amended Complaint ¶ 19.

14

This case is quite unlike Green v. Niles, No. 11 Civ. 1349, 2012 U.S.

Dist. LEXIS 40297, *14-19 (S.D.N.Y. Mar. 23, 2012), a case on which appellees

rely. There, the plaintiff asserted in his original complaint and first amended

complaint that he “wait[ed] . . . until December 2010 to file . . . a grievance,” but

asserted in his second amended complaint, filed after he had received a preview of

the defendant’s arguments in their motion to dismiss, that “he had filed a formal

(continued…)

22

disbelieve some of the allegations in the First Amended Complaint, we may not

“countenance . . . dismissal[] based on [such] a . . . disbelief.” Bell Atl. Corp. v.

Twombly, 550 U.S. 544, 556 (2007) (internal quotation marks omitted). It is well-

established that “a well-pleaded complaint may proceed even if it appears that a

recovery is very remote and unlikely” once the record is developed. Id.

For the foregoing reasons, we hold that it was error to grant the motion to

dismiss for failure to state a claim. Wherefore, insofar as the July 17, 2013, order

dismissed appellants’ breach of contract claim relating to the 1219 Connecticut

project and the related unjust enrichment and breach of fiduciary duty claims, the

order is reversed, and the case is remanded for further proceedings consistent with

this opinion.

So ordered.

(…continued)

grievance . . . in October 2010,” a claim that the court observed “appears, quite

clearly, to be a recent fabrication,” which, the court reasoned, it was not required to

accept as true.