Opinion
Civil Action No. 00-2296 (CKK/JMF).
February 10, 2005
REPORT AND RECOMMENDATION
Before me for a Report and Recommendation is Defendants' Robert J. Cerullo and Houlon Berman, LLC's Motion to Dismiss or, in the Alternative, Motion for Summary Judgment; Motion for More Definite Statement [#22].
Discussion
An examination of the documents attached to the pleadings in this case indicates that there is no genuine issue of material fact as to the following:
1. On or about January 20, 1993, the defendant Edward P. Wilson ("Wilson") entered into a Single Family Home Sales Contract, and an Addendum, to sell the property located at 5418 9th Street, N.W. to 5418 9th Street, N.W., Inc., a District of Columbia corporation.
2. A certificate of incorporation was issued by the District of Columbia to 5418 9th Street, N.W., Inc. Plaintiff, Kingsley Anyanwutaku ("Anyanwutaku"), was listed as an incorporator and director in the certificate.
3. On or about April 28, 1993, the defendant Robert J. Cerullo ("Cerullo"), a partner in the law firm of Houlon Berman, LLC, conducted a real estate closing pertaining to the sale of 5418 9th Street N.W. to 5418 9th Street, N.W., Inc.
4. On March 9, 1994, the seller, the defendant Wilson, declared the purchaser in default for failing to comply with the sales contract.
5. On or about December 31, 1996, 5418 9th Street, N.W. was sold to the defendant Daphne James ("James").
Analysis
Since the complaint in this case was filed on September 27, 2000, the defendants Cerullo and his law firm, Houlon Berman, move for summary judgment on the grounds that the action is barred by the applicable three-year statute of limitations. Plaintiff, however, insists that the statute of limitations was tolled during his incarceration from September 19, 1995 to December 15, 1997.Plaintiff's argument fails for several reasons.
First, plaintiff was not the purchaser of the property; the corporation, 5418 9th Street, N.W., Inc. was. Any wrong done to the corporation that led to the alleged loss of its interest in the property is cognizable if brought by the corporation, not one of its directors or incorporators. See Gaff v. FDIC, 814 F.2d 311, 315 (6th Cir. 1987) ("A suit for damages arising from an injury to the corporation can only be brought by the corporation itself or by a shareholder derivatively if the corporation fails to act, since only the corporation has an action for wrongs committed against it.") (internal citation omitted). Any claim that the corporation surrendered its interest in the property does not solve the problem. For plaintiff to prosecute the corporation's claim, based on its loss, he must establish the cause of action that the corporation had was assigned to him. He, of course, makes no such claim. Unless and until he establishes such an assignment or amends his complaint to prosecute the claim in the corporation's name, his personal claim, based on the loss of the property, fails to state a claim upon which relief can be granted.
Moreover, such an assignment or amendment would be futile. Obviously, the assignment to him of the corporation's claim does not convert it into his personal claim. While he may have been incarcerated for a period of time, the corporation wasn't, and I know of no authority for the proposition that the statute of limitations is tolled for a corporation because of the incarceration of one of its directors or incorporators or even its president. Plaintiff chose to do business in the corporate form for whatever benefits he could gain thereby. He cannot put that corporate identity on and off like his hat and use his personal circumstances to excuse the corporation's failure to pursue its rights in a timely manner.
Finally, even if the corporation's cause of action could be somehow converted into a personal cause of action that plaintiff could assert, it is still barred by the statue of limitations. Under District of Columbia law, a cause of action accrues for the purposes of the statute of limitations when the action that causes the injury occurs. Mullin v. Washington Free Weekly, 785 A.2d 296, 298 (D.C. 2001). See also Cevenini v. Archbishop of Washington, 707 A.2d 768, 771 (D.C. 1998) ("This court has repeatedly held that a claim accrues when the plaintiff knows of (1) an injury, (2) its cause, and (3) some evidence of wrongdoing.") (citations omitted). The corporation's loss of the property occurred on March 9, 1994 when the seller declared it in default, meaning that the obligation to transfer title to the corporation had ended, and then indicated that he would sue for possession. Defendants' Robert J. Cerullo and Houlon Berman, LLC's Motion to Dismiss Or, in the Alternative, Motion for Summary Judgment; Motion for More Definite Statement, Exhibit 4. The statute began to run on that day and ran for another 18 months until plaintiff was incarcerated. It then resumed running on December 15, 1997 when plaintiff got out of prison. Since plaintiff filed this action on September 27, 2000, there were more than 51 months between the accrual of the action and the filing of the complaint, even if the statute was tolled during his incarceration.
TOTAL AMOUNT OF TIME BETWEEN ACCRUAL OF ACTION AND FILING OF COMPLAINT
For the reasons I have just stated, I recommend that the complaint be dismissed as against Robert J. Cerullo and Houlon Berman either because it fails to state a claim upon which relief can be granted or because these defendants are entitled to summary judgment.
Failure to file timely objections to the findings and recommendations set forth in this report may waive your right of appeal from an order of the District Court adopting such findings and recommendations. See Thomas v. Arn , 474 U.S. 140 (1985).
March 9, 1994 (date of accrual) — September 19, 1995 18 months September 19, 1995 — December 15, 1997 (period of plaintiff's incarceration) Assumed tolling of the statute of limitations December 15, 1997 — September 27, 2000 (filing of complaint) 33 months 51 months