United States Court of Appeals, District of Columbia Circuit
Houshang H. Momenian, et al., Appellants
Michael M. Davidson, Appellee
September 20, 2017
from the United States District Court for the District of
Columbia (No. 1:15-cv-00828)
Christopher G. Hoge argued the cause and filed the briefs for
N. Markels argued the cause for appellee. With him on the
brief was Timothy R. Dingilian.
Before: Pillard and Wilkins, Circuit Judges, and Silberman,
Senior Circuit Judge.
Wilkins, Circuit Judge.
legal-malpractice action arises from Defendant Michael M.
Davidson's representation of Houshang and Vida Momenian
(the "Momenians") in a lawsuit filed in D.C.
Superior Court on August 18, 2009 (the "2009
Litigation"). The Momenians settled the 2009 Litigation
on October 12, 2010, but allege Defendant failed to explain
that the settlement meant all of their claims were fully and
finally dismissed. On May 6, 2015, the Momenians
(collectively with the Houshang Momenian Revocable Trust,
"Plaintiffs") sued Defendant for, inter
alia, his allegedly negligent settlement advice.
Defendant moved to dismiss pursuant to the three-year statute
of limitations, arguing that if Plaintiffs had exercised
reasonable diligence investigating their claims, they would
have been on notice of the cause of action at some point
prior to May 6, 2012. Defendant also moved to dismiss for
failure to state a claim on the merits.
District Court twice dismissed the complaint as untimely:
first with leave to amend, and second with prejudice,
concluding that Plaintiffs' amended complaint failed to
allege facts sufficient to overcome the timeliness bar.
District Court engaged in a thorough and careful analysis of
the timeliness issue. However, taking the allegations of the
complaint as true and drawing all reasonable inferences in
Plaintiffs' favor, we do not agree that Plaintiffs'
claims are conclusively time barred at the pleading stage.
Under the circumstances of this case, including the
parties' attorney-client relationship, Plaintiffs'
efforts to check in with Defendant about the 2009 Litigation
every three months following the 2010 settlement plausibly
fulfilled their duty to investigate their affairs with
reasonable diligence. It is therefore plausible that
Plaintiffs' claims did not accrue prior to May 6, 2012.
Accordingly, we reverse and remand for proceedings consistent
with this opinion.
following facts are taken from the operative complaint and
assumed true for the purpose of reviewing Defendant's
motion to dismiss. Bell Atl. Corp. v. Twombly, 550
U.S. 544, 555 (2007).
2009 Litigation resulted from a series of real-estate
transactions in Washington, D.C. In 1990, the Momenians
purchased three properties from Paul and Amelia Interdonato
(the "Interdonatos") with a $265, 000 promissory
note (the "Note") secured by the properties'
deeds of trust. In January 1998, Paul Interdonato wrote a
letter to Houshang confirming the Note's remaining
balance of $181, 167.24.
the next four years, Plaintiffs attempted several direct and
indirect payments on the Note by transferring
real-estate-related assets to the Interdonatos. Specifically,
they allege four such payments, in the amounts of $10, 000,
$29, 999.46, $50, 000, and an unspecified amount of rent
apparently collected by the Interdonatos from tenants of a
property owned by Plaintiffs. On January 1, 2002, Plaintiffs
and the Interdonatos entered into a Note Modification
Agreement stating Plaintiffs' "total outstanding
indebtedness to the Interdonatos" was $141, 898.47 and
that Plaintiffs would pay that balance at a rate of $1, 300
per month. These payments continued until November 2012,
amounting to $197, 600.
filed the 2009 Litigation on the Momenians' behalf in
August 2009. That complaint alleged the Interdonatos did not
properly credit the four payments Plaintiffs claimed to have
made on the Note. During discovery, Houshang repeatedly asked
Defendant to hire an accountant or have one appointed by the
court to "do an analysis and computation of the amounts
which should have been credited to Plaintiffs'
Note." J.A. 90. No such accountant was ever hired or
appointed during the 2009 Litigation.
Defendant's advice, the Momenians settled the 2009
Litigation on October 12, 2010, by executing a praecipe
stating "the Clerk of  Court will dismiss with
prejudice this action." J.A. 90. Pursuant to the
settlement, the Interdonatos agreed to credit $15, 000 to the
Note balance immediately. At the time he signed the praecipe,
Houshang believed the settlement involved only one of the
four claimed credits because, Plaintiffs allege, Defendant
did not adequately explain that dismissal of the action
"with prejudice" meant all claims were
fully and finally dismissed. Houshang believed "other
aspects of his claim, having to do with other amounts which
he claimed should have been credited to Plaintiffs' Note,
would be referred to the Court and/or a Court-appointed
allege Defendant continued to represent them in the 2009
Litigation after the October 2010 settlement. In support they
offer an invoice from ...