MobilizeGreen Inc. v. Community Foundation for the Capital Region
19-CV-861
| D.C. | Jan 27, 2022Background
- MobilizeGreen, not a 26 U.S.C. § 501(c)(3) entity, arranged a short-term fiscal sponsorship with Community Foundation so it could pursue a Forest Service internship grant.
- The fiscal-sponsorship agreement set the sponsorship as temporary through November 1, 2011, stating MobilizeGreen "will transfer to another fiscal sponsor." Community Foundation also signed a Cost Share Agreement with the Forest Service effective through September 30, 2012.
- Transfer of the sponsored fund required Forest Service consent under the Anti-Assignment Act; MobilizeGreen lined up a proposed replacement sponsor but did not request Forest Service consent until March 2012.
- The Forest Service initially denied the transfer request; later it approved a transfer effective October 1, 2012, so Community Foundation remained sponsor through September 30, 2012.
- MobilizeGreen sued for breach of contract (failure to transfer sponsorship) and breach of fiduciary duty (mismanagement). The trial court granted summary judgment for Community Foundation; the D.C. Court of Appeals affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract: who had duty to effectuate transfer and obtain Forest Service consent? | MobilizeGreen: Community Foundation breached by failing to transfer sponsorship by Nov 1, 2011 and by not securing Forest Service consent. | Community Foundation: Contract language and extrinsic evidence show MobilizeGreen promised to obtain another sponsor and thus bore the duty to effectuate the transfer and seek consent; CF cooperated and did not withhold consent. | Court: Affirmed for Community Foundation. Contract ambiguous but extrinsic evidence establishes MobilizeGreen had obligation to effectuate transfer and obtain governmental consent. |
| Breach of fiduciary duty: did Community Foundation owe fiduciary duties to MobilizeGreen? | MobilizeGreen: Parties had a relationship of trust and confidence and CF mismanaged funds, raising a factual question on fiduciary status. | Community Foundation: Relationship was governed by the sponsorship contract; CF administered funds for its own charitable purposes and did not assume fiduciary duties beyond the contract. | Court: Affirmed for Community Foundation. No special confidential relationship or evidence CF assumed fiduciary obligations. |
Key Cases Cited
- District of Columbia v. Young, 39 A.3d 36 (D.C. 2012) (contract interpretation and ambiguity resolved as question of law)
- Aziken v. District of Columbia, 70 A.3d 213 (D.C. 2013) (use of extrinsic evidence to interpret ambiguous contract language)
- Mind & Motion Utah Invs., LLC v. Celtic Bank Corp., 367 P.3d 994 (Utah 2016) (party contracting knowing government approval required ordinarily must obtain it)
- Vermont Yankee Nuclear Power Corp. v. Entergy Nuclear Vermont Yankee, LLC, 683 F.3d 1330 (Fed. Cir. 2012) (government may consent to assignments subject to Anti-Assignment Act)
- Geiger v. Crestar Bank, 778 A.2d 1085 (D.C. 2001) (fiduciary duty requires extending relationship beyond ordinary contract)
- Fogg v. Fidelity Nat’l Title Ins. Co., 89 A.3d 510 (D.C. 2014) (summary judgment appropriate where record shows defendant did not assume fiduciary duty)
- Firestone v. Firestone, 76 F.3d 1205 (D.C. Cir. 1996) (existence of fiduciary relationship is fact-intensive)
- Sacramento Navigation Co. v. Salz, 273 U.S. 326 (1927) (implied contractual provisions necessary to effectuate parties' intent)