Millennium Square Residential Association v. 2200 M Street LLC
952 F. Supp. 2d 234
D.D.C.2013Background
- MSRA sues 2200 M Street LLC, Millennium Trust, Millennium CAF II, MSCA, and seven Individual Defendants over alleged Parking Unit defects in Millennium Square Condominium.
- Governing documents allocate maintenance/repair obligations among unit owners, MSRA, MSCA, and Millennium Defendants; MSRA seeks repairs and damages.
- MSRA alleges Parking Unit has serious structural defects, causing safety hazards, corrosion, mold, and reduced market value; estimated repair cost at least $600,000.
- Millennium Trust is asserted to own the Parking Unit via a trustee; MSRA contends Millennium Trust is a REIT; Millennium Trust disputes REIT status.
- MSCA is an unincorporated association formed under the DC Condominium Act; MSRA contends MSCA can be sued; MSCA challenges capacity.
- Defendants move to dismiss under Rule 12(b)(6); MSRA moves to dismiss Millennium Defendants’ counterclaims; court overall enjoins some claims and allows others to proceed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Capacity of Millennium Trust to sue or be sued | MSRA asserts Millennium Trust is a REIT with capacity | Millennium Trust argues it is not an eligible party; DC law governs capacity | Millennium Trust granted to dismiss (lacks capacity) |
| Capacity of MSCA to sue | MSCA is an unincorporated nonprofit association with capacity | MSCA is not an unincorporated non-profit under DC law due to Condominium Act status | MSCA dismissed as improper party |
| Economic loss doctrine as to Counts 5 and 6 | Counts 5 (strict liability) and 6 (negligence) avoid categorization as pure contract claims | Economic loss doctrine bars tort claims for loss to the product itself | Counts 5 and 6 survive (not barred) |
| Individual Defendants’ liability (negligence, contract, fiduciary duty) | Counts Six, Eight, and Nine viable against Individual Defendants | Business judgment rule and other defenses may bar claims; some arguments disputed | Negligence sustained against Individuals; breach of contract and fiduciary duty viable; Mooney potentially limited on fiduciary duty |
| MSRA counterclaims (duty, statute of limitations, unjust enrichment) | Counterclaims should proceed | Unjust enrichment barred by existence of contracts; statute of limitations contested | Duty and contract-based counterclaims plausibly plead; unjust enrichment dismissed |
Key Cases Cited
- Armenian Genocide Museum & Memorial, Inc. v. Cafesjian Family Found., Inc., 607 F. Supp. 2d 185 (D.D.C. 2009) (fiduciary duties; flexible duty framework)
- Armenian Assembly of Am. v. Cafesjian, 772 F. Supp. 2d 20 (D.D.C. 2011) (business judgment rule; exceptions for self-dealing and bad faith)
- Lacy v. Sutton Place Condo. Ass’n, 684 A.2d 390 (D.C. 1996) (condominium contracts; enforceability against boards)
- Johnson v. Fairfax Village Condominium IV Unit Owners Ass’n, 548 A.2d 87 (D.C. 1988) (contracts in condominium governance; private law)
- Fairfax Village Condo. IV, 548 A.2d 87 (D.C. 1988) (private law making; governance authority)
- Simms v. Dist. of Columbia, 699 F. Supp. 2d 217 (D.D.C. 2010) (negligence pleading standards; duty)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility standard for complaints)
- Twombly v. Bell Atlantic Corp., 550 U.S. 544 (U.S. 2007) (facial plausibility standard)