Capitol Services Management Inc. v. Vesta Corporation

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

CAPITOL SERVICES MANAGEMENT
INC.,

Plaintiff,

v. Civ. Action No. 17-1756
(EGS)
VESTA CORPORATION,

Defendant.

MEMORANDUM OPINION
I. Introduction

Capitol Services Management Inc. (“CSMI” or “Plaintiff”)

brought this action against Vesta Corporation (“Vesta” or

“Defendant”) on August 28, 2017, alleging: (1) intentional

interference with business relations; and (2) tortious

interference with a reasonable expectation of prospective

economic advantage. See Compl., ECF No. 1 ¶¶ 36-51. 1 Following

the reversal of this Court’s dismissal of the case pursuant to

Federal Rule of Civil Procedure 12(b)(6), see Capitol Servs.

Mgmt. Inc. v. Vesta Corp. (“CSMI II”), 933 F.3d 784, 787 (D.C.

Cir. 2019); the parties engaged in discovery regarding the

1 When citing electronic filings throughout this Opinion, the
Court cites to the ECF header page number, not the original page
number of the filed document.
1
statute of limitations in the case, see Minute Order (Nov. 18,

2019).

Pending before the Court is Vesta’s Motion for Summary

Judgment, see Def. Vesta Corp.’s Mot. Summ. J. on Statute of

Limitations, ECF No. 29. Upon careful consideration of the

motion, the opposition, and reply thereto, the applicable law,

and the entire record herein, the Court hereby GRANTS

Defendant’s Motion for Summary Judgment.

II. Background

A. Factual

1. Park Southern Apartments and the Deed of Trust

On May 25, 2006, the Park Southern Neighborhood Corporation

(“PSNC”) acquired the Park Southern Apartments in the District

of Columbia (the “District”). Pl.’s Counter-Statement of

Material Facts as to Which There is No Genuine Issue (“SMF”),

ECF No. 37-1 ¶ 1 (citing Compl., ECF No. 1 ¶ 5). At the same

time, PSNC executed a “First Deed of Trust” (“Deed of Trust” or

“Deed”) on the property. Id. ¶ 2 (citing Compl., ECF No. 1 ¶ 5).

The Deed of Trust documented the more than $3 million that PSNC

owed the District and granted the District certain rights as a

beneficiary of the Deed. Id. ¶¶ 3-4 (citing Compl., ECF No. 1 ¶¶

6-7).

In April 2014, the District—through the Director of the

Department of Housing and Community Development (“DHCD”)—sent

2
PSNC a notice of default and provided PSNC 30 days to cure. Id.

¶ 5 (citing Compl., ECF No. 1 ¶ 26). Because PSNC could not cure

the default in that time, DHCD took control of the Park Southern

Apartments on May 2, 2014 pursuant to the Deed of Trust’s

default procedure. Id. ¶ 6 (citing Compl., ECF No. 1 ¶¶ 27-28).

2. Property Management of the Park Southern Apartments

Before the 2014 events discussed supra, PSNC contracted

with Vesta to provide property management services at the Park

Southern Apartments. Id. ¶ 7 (citing Compl., ECF No. 1 ¶ 8). In

March 2014, PSNC terminated that contract and entered into a new

property management contract with CSMI. Id. ¶ 8 (citing Compl.,

ECF No. 1 ¶¶ 8-9).

On March 19, 2014, Rowena Scott (“Ms. Scott (PSNC)”),

PSNC’s owner, forwarded to Monica Ray (“Ms. Ray (CSMI)”), the

senior vice president of operations at CSMI, an email from Chuck

Moran (“Mr. Moran (Vesta)”) disputing PSNC’s termination of

Vesta’s property management contract. Id. ¶ 17 (citing Ex. 4,

ECF No 29-3 at 161). CSMI later admitted in a Rule 30(b)(6)

deposition in this case that, at the time, it knew that Vesta

had been the property manager of the Park Southern Apartments

before CSMI’s contract began in March 2014. Id. ¶ 19 (citing Ex.

3, ECF No. 29-3 at 51).

Then, on April 2, 2014, Mr. Moran (Vesta) sent an email to

residents at the Park Southern Apartments stating that “Vesta

3
Management is the only management company approved by the

Department of Community Housing and Development for the Park

Southern Apartment Complex.” Id. ¶ 27 (citing Ex. 11, ECF No.

29-3 at 186; Ex. 3, ECF No. 29-3 at 59). CSMI was aware of the

email message on the date it was sent and wrote PSNC’s response

letter on April 4, 2014. Id. ¶¶ 28-29 (citing Ex. 3, ECF No. 29-

3 at 59, 61; Ex. 12, ECF No. 29-3 at 188; Ex. 13, ECF No. 29-3

at 191).

CSMI was also aware in April 2014 that Ms. Scott (PSNC) was

concerned that Vesta was “working behind the scene” to regain

management of the Park Southern Apartments. Id. ¶ 32 (citing Ex.

14, ECF No. 29-3 at 194-95).

Property management shifted again when DHCD took control of

the Park Southern Apartments. The Deed of Trust granted the

District the authority to “take and maintain full control of the

property in order to perform all acts necessary and appropriate

for the operation and maintenance thereof, including but not

limited to . . . the execution or termination of contracts

providing for the management and maintenance of the property.”

Id. ¶ 10 (citing Compl., ECF No. 1 ¶ 33). Thus, when DHCD

assumed control of the Park Southern Apartments in May 2014, it

entered into an “emergency contract” with Vesta. Id. ¶ 11

(citing Compl., ECF No. 1 ¶ 28). DHCD also terminated CSMI’s

contract without the required notice. Id. ¶ 25 (citing Ex. 3,

4
ECF No. 29-3 at 70). Pursuant to the emergency contract, Vesta

assumed management of the property on May 3, 2014. See id. ¶ 12

(citing Compl., ECF No. 1 ¶ 29).

On May 21, 2014, Phinis Jones (“Mr. Jones (CSMI)”), CSMI’s

owner, sent an email to Michael Kelly (“Mr. Kelly (DHCD)”), an

employee at DHCD, in which he stated that he was “deeply

concerned about developments to date that have resulted in the

interference of [CSMI’s] written property management agreement

with Park Southern Apartments.” Id. ¶ 20 (citing Ex. 5, ECF No.

29-3 at 164). He also asked for “the specific legal

authorization for the ‘emergency’ procurement, which is the

basis that [DHCD] stated Vesta was retained” and a copy of

DHCD’s contract with Vesta. Id. ¶¶ 20-21 (citing Ex. 5, ECF No.

29-3 at 164). Thus, by no later than May 23, 2014, CSMI knew

that DHCD and Vesta had executed an emergency contract giving

management of the Park Southern Apartments to Vesta. Id. ¶ 22

(citing Ex. 3, ECF No. 29-3 at 73).

At no point did CSMI learn the basis for DHCD’s execution

of the emergency contract with Vesta. Id. ¶ 24 (citing Ex. 5,

ECF No. 29-3 at 164; Ex. 3, ECF No. 29-3 at 72). Rather, as

CSMI’s corporate designee later testified, as of May 21, 2014,

CSMI believed that the emergency used to justify the contract

with Vesta was pretext. Id. ¶ 31 (citing Ex. 3, ECF No. 29-3 at

73). CSMI also knew by August 13, 2014 that individuals at DHCD

5
and Vesta had preexisting relationships. Id. ¶ 36 (citing Ex.

10, ECF No. 293 at 183-84).

3. Superior Court Proceedings

On July 24, 2014, CSMI filed an action against the District

in the Superior Court of the District of Columbia (“Superior

Court”). Id. ¶ 13 (citing Ex. 1, ECF No. 29-3). CSMI alleged

several claims: breach of contract, breach of covenant of good

faith and fair dealing, tortious interference with contractual

relations, tortious interference with business opportunity, and

civil conspiracy. See Ex. 1, ECF No. 29-3 at 2.

In July 2016, during discovery in the Superior Court case,

CSMI deposed Milton Bailey (“Mr. Bailey (DHCD)”), an employee at

DHCD, who CSMI claims “‘revealed considerable evidence’ of

Vesta’s alleged tortious interference” during his deposition.

CSMI II, 933 F.3d at 788 (citation omitted).

In May 2017, the Superior Court granted summary judgment

against CSMI. Id. The court concluded that the District was

entitled to sovereign immunity and that CSMI had failed to make

its prima facie case of tortious interference. Id.

4. Federal Court Proceedings

On August 28, 2017, CSMI filed the Complaint in this case

against Vesta, alleging: (1) intentional interference with

business relations; and (2) tortious interference with a

reasonable expectation of prospective economic advantage. See

6
Compl., ECF No. 1 ¶¶ 36-51. Vesta moved to dismiss the Complaint

in December 2017. See generally Vesta’s Mem. in Supp. of Mot.

Dismiss, ECF No. 6. Vesta argued in part that CSMI’s claims were

time-barred because the three-year statute of limitations

expired before CSMI filed its Complaint. Id. at 1. This Court

granted Vesta’s Motion to Dismiss, concluding that “CSMI knew or

had reason to know about Vesta’s alleged tortious conduct more

than three years before it filed its claim in this Court.”

Capitol Servs. Mgmt., Inc. v. VESTA Corp. (“CSMI I”), 318 F.

Supp. 3d 265, 270 (D.D.C. 2018).

CSMI appealed. Notice of Appeal, ECF No. 11. The Court of

Appeals for the District of Columbia Circuit (“D.C. Circuit”)

reversed this Court’s judgment. CSMI II, 933 F.3d at 795. In so

doing, the D.C. Circuit drew several conclusions. First, it

observed that there was no dispute that “as of May 3, 2014,

[CSMI] had ‘actual notice’ of its injury–the cancellation of its

property management contract. And [CSMI] knew then that the

injury was caused by the District’s decision to award an

‘emergency contract’ to Vesta.” Id. at 792. Second, it noted

that “[t]here is also no meaningful dispute that Capitol

Services lacked ‘actual notice’ of Vesta’s wrongdoing as of that

date.” See id. Third, the D.C. Circuit rejected CSMI’s claim

that it did not have notice of its claims against Vesta until

7
its deposition of Mr. Bailey (DHCD) in July 2016. See id. at

793. And finally, as relevant here, it concluded:

[A]ll that the limited record shows at this
Rule 12(b)(6) stage is that Capitol Services
was not on actual or inquiry notice in either
May or July of 2014, but was on inquiry notice
at least by October 2014. The record is
inconclusive as to Capitol Services’ knowledge
about Vesta’s role prior to August 28, 2014—
three years before this suit against Vesta was
filed. When during that intervening period
Capitol Services had inquiry notice of Vesta’s
potential role thus is an open factual
question that cannot be resolved at this early
juncture.

Id. The D.C. Circuit then remanded the case to this Court for

further proceedings. Id. at 795.

Following the appeal, the parties commenced discovery on

the limited issues regarding the statute of limitations. See

Minute Order (Nov. 18, 2019).

B. Procedural

On September 4, 2020, after several months of discovery,

Vesta filed the instant Motion for Summary Judgment. See

generally Def. Vesta Corp.’s Mot. Summ. J. on Statute of

Limitations, ECF No. 29; Def. Vesta Corp.’s Mem. P. & A. in

Supp. of Mot. Summ. J. on Statute of Limitations (“Def.’s

Mot.”), ECF No. 29. CSMI filed its opposition to Vesta’s motion

on October 16, 2020; see Pl.’s Opp’n Def.’s Mot. Summ. J.

(“Pl.’s Opp’n”), ECF No. 31; and Vesta filed its reply brief on

October 23, 2020, see Def. Vesta Corp.’s Reply Br. in Supp. of

8
Mot. Summ. J. on Statute of Limitations (“Def.’s Reply”), ECF

No. 32. The motion is now ripe and ready for adjudication.

III. Legal Standard

Pursuant to Federal Rule of Civil Procedure 56, the Court

must grant a motion for summary judgment if “there is no genuine

dispute as to any material fact and the movant is entitled to

judgment as a matter of law.” Fed. R. Civ. P. 56(a); see also

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). The

moving party bears the initial burden “of informing the district

court of the basis for its motion, and identifying those

portions of the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the

affidavits, if any, which it believes demonstrate the absence of

a genuine issue of material fact.” Celotex Corp. v. Catrett, 477

U.S. 317, 323 (1986) (citation and internal quotation marks

omitted); see also Fed. R. Civ. P. 56(c)(1). This burden “may be

discharged by showing . . . that there is an absence of evidence

to support the nonmoving party’s case.” Celotex, 477 U.S. at 325

(internal quotation marks omitted).

In evaluating a summary judgment motion, “[t]he evidence of

the non-movant is to be believed, and all justifiable inferences

are to be drawn in his favor.” Liberty Lobby, 477 U.S. at 255

(quoting Adickes v. S. H. Kress & Co., 398 U.S. 144, 158-59

(1970)). Summary judgment turns on “whether the evidence

9
presents a sufficient disagreement to require submission to a

jury or whether it is so one-sided that one party must prevail

as a matter of law.” Id. at 251-52. “[I]f the evidence is such

that a reasonable jury could return a verdict for the nonmoving

party”–and thus a “genuine” dispute over a material fact exists–

then summary judgment is not available. Id. at 248. The Court’s

role at the summary judgment stage “is not . . . to weigh the

evidence and determine the truth of the matter but to determine

whether there is a genuine issue for trial.” Id. at 249.

IV. Analysis

A. Exhibits 5, 10, and 14 are Admissible Non-hearsay, but
Exhibit 9 is Inadmissible Hearsay

CSMI objects that several of Vesta’s exhibits accompanying

its Motion for Summary Judgment are inadmissible hearsay. See

Pl.’s Opp’n, ECF No. 31 at 10, 17-18, 21, 26 n.32 (objecting to

Exhibits 5, 9, 10, and 14). Vesta counters that the exhibits are

admissible because the statements are not hearsay or fall under

an exception to the hearsay rule. See Def.’s Reply, ECF No. 32

at 10-11. For the reasons that follow, the Court concludes that

Exhibits 5, 10, and 14 are admissible and that Exhibit 9 is not.

“Hearsay is an out-of-court statement that ‘a party offers

in evidence to prove the truth of the matter asserted in the

statement.’” Humane Soc’y of U.S. v. Animal & Plant Health

Inspection Serv., 386 F. Supp. 3d 34, 44 (D.D.C. 2019) (quoting

10
Fed. R. Evid. 801(c)). “[H]earsay evidence is generally

inadmissible,” id.; unless it is subject to an enumerated

hearsay exception, see Fed. R. Evid. 802; id. 803.

At the summary judgment stage, “only admissible evidence

may be considered by the trial court.” Humane Soc’y, 386 F.

Supp. 3d at 44 (quoting Bortell v. Eli Lilly & Co., 406 F. Supp.

2d 1, 11 (D.D.C. 2005) (quoting Beyene v. Coleman Sec. Servs.,

Inc., 854 F.2d 1179, 1181 (9th Cir. 1988))). However, the Court

may consider evidence that is capable of being converted into

admissible evidence at trial. See Jones v. United States, 934 F.

Supp. 2d 284, 289 (D.D.C. 2013) (citing Gleklen v. Democratic

Cong. Campaign Comm., Inc., 199 F.3d 1365, 1369 (D.C. Cir.

2000)). “Accordingly, to the extent that the evidence cited by

[Vesta] can be converted into admissible evidence, it can be

considered on summary judgment.” Id.

1. Exhibit 5

CSMI argues that the May 21, 2014 email message from Mr.

Jones (CSMI) to Mr. Kelly (DHCD) is inadmissible hearsay because

“Defendant erroneously attributes to CSMI Ms. Scott’s written

language and thoughts that Vesta was ‘working behind the scene’

to oust CSMI from the property.” Pl.’s Opp’n, ECF No. 31 at 17.

Vesta responds that it has not offered the exhibit for the truth

of Mr. Jones’s statement. Def.’s Reply, ECF No. 32 at 10.

Rather, Vesta offered the exhibit “to demonstrate that CSMI had

11
knowledge of the emergency contract between DHCD and Vesta no

later than May 21, 2014.” Id.

The Court agrees with Vesta that this evidence is not

hearsay. An out-of-court statement constitutes hearsay only

insofar as it has been offered for the truth of the matter

asserted in the statement. Humane Soc’y, 386 F. Supp. 3d at 44

(quoting Fed. R. Evid. 801(c)). That same statement still “might

be offered to show that the declarant had certain information,

or entertained a specific belief.” United States v. Murphy, 193

F.3d 1, 6 n.2 (1st Cir. 1999) (citing 5 Weinstein’s Federal

Evidence § 801.03[4], at 801–14.1 to 801–15 (2d ed. 1999)).

Here, Vesta has offered the May 21, 2014 email from Mr. Jones

(CSMI) to Mr. Kelly (DHCD) to demonstrate that Mr. Jones (CSMI)

had certain information—namely, that he knew that there had been

“interference of [his] property management agreement with Park

Southern Apartments” and that “VESTA was retained.” Ex. 5, ECF

No. 29-3 at 164. The Court therefore concludes that Exhibit 5 is

admissible. 2

2. Exhibit 9

CSMI next asserts that the Washington Post article that

Vesta has submitted is inadmissible hearsay and that several

2 Because Exhibit 5 is admissible non-hearsay, the Court will
not address Vesta’s argument that the emails here fall under the
hearsay exception for business records. See Def.’s Reply, ECF
No. 32 at 11 (citing Fed. R. Evid. 803(6)).
12
statements within that article are also hearsay. See Pl.’s

Opp’n, ECF No. 31 at 10, 17. Vesta defends the statements within

the article as admissible hearsay, see Def.’s Reply, ECF No. 32

at 11 (arguing that statements by CSMI’s attorney in the

Superior Court litigation are admissions of a party-opponent

under Fed. R. Evid. 801(d)(2)(D)); but does not offer a defense

of the article as a whole, see generally id.

The Washington Post article is inadmissible hearsay.

Newspaper articles like the one offered here “usually provide no

evidence of the reporter’s perception, memory or sincerity and,

therefore, lack circumstantial guarantees of trustworthiness.”

Atkins v. Fischer, 232 F.R.D. 116, 132 (D.D.C. 2005) (quoting

Eisenstadt v. Allen, 113 F.3d 1240 (9th Cir. 1997) (Table)

(“[N]ewspaper articles clearly fall within the definition of

hearsay . . . and, thus, are inadmissible.”)). As a result,

“courts within this Circuit have consistently barred newspaper

articles from introduction as evidence due to the fact that they

constitute inadmissible hearsay.” Id. (citing Metro. Council of

NAACP Branches v. Fed. Commc’ns Comm’n, 46 F.3d 1154, 1165 (D.C.

Cir. 1995); United States v. Pollard, 161 F. Supp. 2d 1, 6

(D.D.C. 2001)). The Court therefore will not consider this

exhibit with Vesta’s Motion for Summary Judgment. 3

3 The Court need not address Vesta’s argument that statements by
Donald Temple, CSMI’s attorney, fall within an exception to the
13
 3. Exhibit 10

CSMI also objects to the admissibility of the email

messages that Ms. Scott (PSNC) forwarded to Ms. Ray (CSMI) on

August 13, 2014 on hearsay grounds. See Pl.’s Opp’n, ECF No. 31

at 17-18. Vesta argues that it did not submit this exhibit “for

the tru[th] of Rowena Scott’s statement regarding the friendship

between Milton Bailey and David Willmarth, but rather for its

effect on Monica Ray on August 13, 2014.” Def.’s Reply, ECF No.

32 at 10.

The Court concludes that this evidence is not hearsay. As

with Exhibit 5, this out-of-court statement falls outside the

definition of hearsay because it has not been offered for the

truth of the matter asserted. See supra; Humane Soc’y, 386 F.

Supp. 3d at 44 (quoting Fed. R. Evid. 801(c)). Vesta has offered

these email messages to show “their effect on the listener,” so

they are admissible non-hearsay. Jones, 934 F. Supp. 2d at 290

(citing Ali v. D.C. Gov’t, 810 F. Supp. 2d 78, 83 (D.D.C. 2011))

(rejecting Rule 56(c)(2) objection for evidence offered on

summary judgment for the effect on the listener); see Def.’s

hearsay rule because it has raised no argument that the article
containing those statements is admissible. See, e.g., Wilson v.
DNC Servs. Corp., 417 F. Supp. 3d 86, 97 (D.D.C. 2019), aff’d,
831 F. App’x 513 (D.C. Cir. 2020) (declining to consider double
hearsay where “Plaintiffs have not explained why the Court
should admit it, either as an exception to or an exclusion from
the hearsay rule”).
14
Mot., ECF No. 29 at 29, 30 (submitting evidence to show what Ms.

Scott knew as of August 13, 2014). Thus, the Court determines

that Exhibit 10 is admissible. 4

4. Exhibit 14

Finally, CSMI argues that the email exchange between Ms.

Ray (CSMI) and Mr. Smith (CSMI) in April 2014 constitutes

inadmissible hearsay. See Pl.’s Opp’n, ECF No. 31 at 21. Vesta

contends that these emails are not hearsay, as it offered the

exhibit “to demonstrate the effect on Monica Ray,” not “to prove

that Vesta was ‘working behind the scene’ to oust CSMI.” Def.’s

Reply, ECF No. 32 at 10.

The Court concludes that this exhibit, like the other two

exhibits with email messages discussed supra, is admissible non-

hearsay. Vesta uses this evidence in its summary judgment

briefing as evidence that “CSMI knew that DHCD and Vesta had

communicated before entering into the emergency contract” and

“was aware as of April 28, 2014 that Vesta was ‘working behind

the scene’ to oust CSMI from the property.” Id. at 30 (citing

Ex. 14, ECF No. 29-3 at 193-95). In other words, Vesta has

offered the email messages to demonstrate “their effect on the

listener,” Jones, 934 F. Supp. 2d at 290 (citing Ali, 810 F.

4 Because Exhibit 10 is admissible non-hearsay, the Court will
not address Vesta’s argument that the emails here fall under the
hearsay exception for business records. See Def.’s Reply, ECF
No. 32 at 11 (citing Fed. R. Evid. 803(6)).
15
Supp. 2d at 83); not to prove that Vesta was “working behind the

scene” against CSMI.

In summary, the Court concludes that Exhibits 5, 10, and 14

are admissible non-hearsay and will consider this evidence along

with Vesta’s Motion for Summary Judgment. The Court also

concludes that Exhibit 9 is inadmissible hearsay and will not

further consider that evidence.

B. The Discovery Rule Applies in This Case

Vesta first argues that CSMI’s claims are time-barred

because, under the District of Columbia’s general accrual rule,

the claims accrued when CSMI was injured on May 2, 2014. See

Def.’s Mot., ECF No. 29 at 16. CSMI counters that its claims did

not accrue when it was injured because the discovery rule, not

the general accrual rule, applies. See Pl.’s Opp’n, ECF No. 31

at 10-15. For the reasons below, the Court concludes that the

discovery rule is applicable here.

The parties agree that CSMI’s claims are subject to a

three-year statute of limitations. See D.C. Code § 12-301(8);

Beard v. Edmondson & Gallagher, 790 A.2d 541, 546 (D.C. 2002)

(three-year statute of limitations for tortious interference

with contract); Carr v. Brown, 395 A.2d 79, 83 (D.C. 1978)

(three-year statute of limitations for tortious interference

with prospective advantage). They disagree, however, on when the

statute of limitations began to run. “Ordinarily under District

16
[of Columbia] law, the statute of limitations for a tort claim

starts to run when the plaintiff is injured.” CSMI II, 933 F.3d

at 790 (citing Amobi v. Dist. of Columbia Dep’t of Corr., 755

F.3d 980, 994 (D.C. Cir. 2014)). Specifically, a claim accrues

at the time of injury if “the fact of an injury can be readily

determined.” Colbert v. Georgetown Univ., 641 A.2d 469, 472

(D.C. 1994) (citing Burns v. Bell, 409 A.2d 614, 615 (D.C.

1979); Shehyn v. Dist. of Columbia, 392 A.2d 1008, 1013 (D.C.

1978)). But “[w]here the relationship between the fact of injury

and the alleged tortious conduct may be obscure,” District of

Columbia law requires application of the “discovery rule” to

determine when the claim accrues. Id. at 472-73 (citing

Bussineau v. President & Dirs. of Georgetown Coll., 518 A.2d

423, 425–26 (D.C. 1986)).

The Court first addresses CSMI’s response to the Motion for

Summary Judgment: namely, that Vesta cannot now argue against

application of the discovery rule. See Pl.’s Opp’n, ECF No. 31

at 10-11. CSMI reasons that Vesta should not be permitted to

“reiterate” the arguments it presented in its Motion to Dismiss

briefing and that the D.C. Circuit has already conclusively

determined that the discovery rule applies in this case. Id.

Vesta counters that it is making new arguments at the summary

judgment stage and that this Court and the D.C. Circuit merely

17
“operated on the assumption that the discovery rule

automatically applied.” See Def.’s Reply, ECF No. 32 at 2-3.

Neither interpretation of the prior proceedings in this

case is entirely accurate. CSMI argued clearly for application

of the discovery rule before both courts in the Motion to

Dismiss proceedings. See Pl.’s Opp’n Def. Vesta Corp.’s Mot.

Dismiss Pl.’s Compl., ECF No. 9 at 4-5; Final Principal Br. of

Appellant, Doc. 1776808 at 34-36; Final Reply Br. of Appellant,

Doc. 1776809 at 20-21. Vesta, on the other hand, did “not

meaningfully dispute” the rule before either court. CSMI II, 933

F.3d at 790. This limited response “was not enough to put the

issue in controversy,” CSMI II, 933 F.3d at 790 n.1 (citing

Davis v. Pension Benefit Guar. Corp., 734 F.3d 1161, 1166–67

(D.C. Cir. 2013)); and so both this Court and the D.C. Circuit

applied the discovery rule.

Similarly, CSMI’s limited argument for preclusion is

insufficient to overcome Vesta’s motion now. CSMI presents no

caselaw or other authority suggesting that Vesta’s failure to

put the discovery rule in controversy earlier precludes argument

at this stage. CSMI cannot “mention a possible argument in the

most skeletal way, leaving the court to do counsel’s work,

create the ossature for the argument, and put flesh on its

bones.” Id. (citation and internal quotation marks omitted). The

Court therefore declines to treat Vesta’s argument against the

18
discovery rule as precluded. Cf. Klay v. Panetta, 924 F. Supp.

2d 8, 23 (D.D.C. 2013), (declining to treat silence as

concession where “it can hardly be said that the issue was

advanced or briefed in any substantive way”), aff’d, 758 F.3d

369 (D.C. Cir. 2014).

The parties next dispute when the discovery rule should

substitute for the general accrual rule. Vesta argues that the

discovery rule is a “narrow exception” that “does not apply in

this case.” Def.’s Mot., ECF No. 29 at 17. It reasons that the

discovery rule applies only in “cases where the relationship

between the fact of injury and the alleged tortious conduct is

obscure when the injury occurs.” Id. (quoting Bussineau, 518

A.2d at 425) (emphasis added by Vesta). To determine whether the

discovery rule applies, Vesta explains, courts look to the four

factors articulated in C.B. Harris & Co. v. Wells Fargo & Co.,

113 F. Supp. 3d 166 (D.D.C. 2015). See id. at 17-18. CSMI

rejects Vesta’s explanation but does not offer an alternative

understanding of when the discovery rule displaces the general

accrual rule. See generally Pl.’s Opp’n, ECF No. 31 at 10-15.

“[T]he discovery rule ‘emerged to redress situations in

which the fact of injury was not readily apparent and indeed

might not become apparent for several years after the incident

causing injury had occurred.’” Stager v. Schneider, 494 A.2d

1307, 1316 (D.C. 1985) (quoting Ehrenhaft v. Malcolm Price,

19
Inc., 483 A.2d 1192, 1201 (D.C. 1984)). Courts now apply the

rule “in cases where the relationship between the fact of injury

and the alleged tortious conduct is obscure when the injury

occurs.” Bussineau, 518 A.2d at 425. Application of the rule

therefore depends on the circumstances of the case, not, as

Vesta suggests, on the type of claim. Compare Wash. Tennis &

Educ. Found., Inc. v. Clark Nexsen, Inc., 324 F. Supp. 3d 128,

138 (D.D.C. 2018), with Def.’s Mot., ECF No. 29 at 17. The D.C.

Court of Appeals has set out four factors courts must consider

to determine whether the discovery rule should apply:

(1) whether the plaintiff is a lay person and
may therefore justifiably rely on the
professional skills of those hired to perform
the work; (2) whether the deficiency in design
or construction was latent; (3) whether the
equities favored protecting the plaintiff as
weighed against potential prejudice to the
defendant; and (4) whether judicial economy
would be served by its application.

Wash. Tennis & Educ. Found., Inc., 324 F. Supp. 3d at 139

(citing Ehrenhaft, 483 A.2d at 1202–03).

Vesta asserts that all four factors weigh against

application of the discovery rule here. See Def.’s Mot., ECF No.

29 at 19. Comparing this case to C.B. Harris, Vesta explains

that the discovery rule is inapplicable because: (1) CSMI “is an

ordinary business . . . with experience in the property

management business in D.C.”; (2) CSMI “immediately” knew it had

been injured; (3) the importance of finality in commercial

20
dealings favors Vesta; and (4) judicial economy favors “more

timely adjudication of complaints.” Id.; see also id. at 18-19

(discussing how the court weighed the same factors in C.B.

Harris).

CSMI opposes comparison to C.B. Harris. See Pl.’s Opp’n,

ECF No. 31 at 13-15. It contends that the C.B. Harris court

declined to apply the discovery rule because the plaintiff there

sued for breach of contract—a claim that, unlike a claim for

tortious interference, does not require proof of intent. Id.

(citing C.B. Harris, 113 F. Supp. 3d at 172). The Court

disagrees. As Vesta explains in its reply briefing, at no point

did the C.B. Harris court limit application of the discovery

rule to tort claims. See Def.’s Reply, ECF No. 32 at 4; see

generally C.B. Harris, 113 F. Supp. 3d 166. Nor could that court

have done so, as the D.C. Court of Appeals has long accepted and

rejected the application of the discovery rule in a variety of

cases. See, e.g., Bussineau, 518 A.2d at 425 (collecting tort

cases where discovery rule applied); Doe v. Kipp DC Supporting

Corp., 373 F. Supp. 3d 1 (D.D.C. 2019) (denying application of

the discovery rule in sexual abuse case); Perry v. Int’l. Bhd.

of Teamsters, 247 F. Supp. 3d 1 (D.D.C. 2017) (denying

application of the discovery rule in ERISA claim); Alkasabi v.

Wash. Mut. Bank, F.A., 31 F. Supp. 3d 101 (D.D.C. 2014) (denying

application of the discovery rule in case alleging violation of

21
Financial Institutions Reform Recovery and Enforcement Act);

Brown v. NAS, 844 A.2d 1113 (D.C. 2004) (denying application of

the discovery rule in employment discrimination case); Beard,

790 A.2d 541 (denying application of the discovery rule in

tortious interference case); Mullin v. Wash. Free Weekly, 785

A.2d 296 (D.C. 2001) (denying application of the discovery rule

in defamation case). Indeed, Vesta points to at least one court

that has applied the discovery rule to both contract and tort

claims. See Kemp v. Eiland, 139 F. Supp. 3d 329, 350-51 (D.D.C.

2015).

As to Vesta’s explanation of how the four factors should be

weighed, CSMI objects only to the first and second factors. See

Pl.’s Opp’n, ECF No. 31 at 14-15. As to the first factor, CSMI

claims that “[n]either . . . business experience nor savvy”

would help “an ordinary business” like itself detect that

“outside actors” sought to tortiously interfere with its

business relations and prospective economic advantage. Id. at

14. Vesta’s caselaw does not suggest otherwise. In C.B. Harris,

the court found that the plaintiff was “an ‘ordinary business,’

which could have detected the allegedly unauthorized fund

transfers” made by the defendant bank “within the three-year

statute of limitations period.” C.B. Harris, 113 F. Supp. 3d at

171.

22
 CSMI also contests Vesta’s argument as to the second

factor. Vesta claims that “there is no allegation that CSMI’s

injuries were latent or difficult to detect,” Def.’s Mot., ECF

No. 29 at 17; but this claim oversimplifies matters. D.C. law

regularly applies the discovery rule “when the relationship

between the injury and the wrongful conduct is obscure,” Azoroh

v. Auto. Ins. Co. of Hartford, 200 F. Supp. 3d 127, 130 (D.D.C.

2016) (citing Doe v. Medlantic Health Care Grp., Inc., 814 A.2d

939, 945 (D.C. 2003); Moore v. Dist. of Columbia, 445 F. App’x

365, 366 (D.C. Cir. 2011)); not merely where the injury alone is

obscure, see Stager, 494 A.2d at 1316. Indeed, Vesta’s own

recitation of the discovery rule considers the relationship

between the injury and “the malfeasance.” See Def.’s Mot., ECF

No. 29 at 17-18. Here, although CSMI concedes that it had actual

notice that DHCD cancelled its contract and installed Vesta as

property manager by May 3, 2014, it argues that it did not know

that Vesta had tortiously interfered with its contract at that

time. See Pl.’s Opp’n, ECF No. 31 at 12-13. In other words, CSMI

knew of the injury DHCD inflicted but not of Vesta’s alleged

wrongful conduct. See id.

The fact that CSMI had notice of DHCD’s wrongful conduct

does not save Vesta. Vesta reasons that “‘a plaintiff’s

knowledge of misconduct by one defendant places her on notice of

claims against the connected potential co-defendants.’” Def.’s

23
Mot., ECF No. 29 at 19-20 (quoting Kipp DC, 373 F. Supp. 3d at

11). However, as CSMI explains in its opposition briefing,

CSMI’s knowledge of DHCD’s wrongdoing does not equate to

knowledge of Vesta’s wrongdoing. See Pl.’s Opp’n, ECF No. 31 at

13; CSMI II, 933 F.3d at 792 (quoting Diamond v. Davis, 680 A.2d

364, 380 (D.C. 1996)) (citing Cevenini v. Archbishop of Wash.,

707 A.2d 768, 773 (D.C. 1998)). The second factor—the latency of

the wrongful conduct and resulting injury—thus weighs in CSMI’s

favor.

With two factors now weighing against Vesta, the Court

determines that the discovery rule is applicable. The parties do

not cite caselaw suggesting how the Court ought to weigh each

factor against the others. See generally Def.’s Mot., ECF No.

29; Pl.’s Opp’n, ECF No. 31. The caselaw they cite, however,

does converge on the significance of the obscure relationship

between the injury and the wrongful conduct. See Bussineau, 518

A.2d at 425; Stager, 494 A.2d at 1316. Because that factor

weighs in CSMI’s favor, the Court will apply the discovery rule

to toll the statute of limitations.

C. CSMI Did Not Have Actual Notice Before August 28, 2014

The Court turns to the question of when CSMI’s claims

accrued and the statute of limitations began to run. Under the

discovery rule, a claim accrues “when the plaintiff ‘either has

actual knowledge of a cause of action’ or is otherwise ‘charged

24
with knowledge of that cause of action.’” CSMI II, 933 F.3d at

790 (quoting Cevenini, 707 A.2d at 771). Put differently, a

plaintiff’s claims do not accrue until he has actual notice or

inquiry notice: “‘(1) of the injury; (2) the injury’s cause in

fact; and (3) of some evidence of wrongdoing.’” Id. at 791

(quoting Commonwealth Land Title Ins. Co. v. KCI Techs., Inc.,

922 F.3d 459, 464 (D.C. Cir. 2019)). Because CSMI filed this

action on August 28, 2017, see generally Compl., ECF No. 1; it

must not have had notice of these three elements until after

August 28, 2014 to survive Vesta’s statute of limitations

challenge on this Motion for Summary Judgment, see D.C. Code §

12-301(8).

The parties do not dispute that as of May 3, 2014, CSMI had

actual notice of its injury (the cancellation of its property

management contract) and the cause in fact of that injury (the

District’s decision to award an emergency contract to Vesta).

See CSMI II, 933 F.3d at 792; Def.’s Mot., ECF No. 29 at 23-24;

Pl.’s Opp’n, ECF No. 31 at 13. They disagree as to when CSMI had

notice “of some evidence of wrongdoing.” 5 Vesta argues that CSMI

5 CSMI seems to dispute whether it must have had notice of “some
evidence of wrongdoing” or notice of “all of the essential
elements of its cause of action.” See Def.’s Mot., ECF No. 29 at
20-23; cf. Pl.’s Opp’n, ECF No. 31 at 10-15. The difference
between these two standards, if any, is unnecessary to decide at
this time because the cases that CSMI cites all discuss notice
of “some evidence of wrongdoing.” See generally Pl.’s Opp’n, ECF
No. 31.
25
had actual notice of its claims in May 2014 or, alternatively,

before August 28, 2014. See Def.’s Mot., ECF No. 29 at 20, 27.

Vesta identifies portions of CSMI’s Rule 30(b)(6) deposition

testimony and email exchanges to support the timelines it

offers. See id. at 23-31. CSMI does not present a different

timeline but disputes that the record demonstrates it had actual

notice before August 28, 2014. See Pl.’s Opp’n, ECF No. 31 at

15-19. For the reasons that follow, the Court concludes that

CSMI did not have actual notice of Vesta’s alleged wrongdoing

before August 28, 2014.

Vesta alleges that CSMI knew two predicate facts that,

taken together, put it on actual notice of Vesta’s alleged

wrongdoing by May 3, 2014. See Def.’s Mot., ECF No. 29 at 23-27.

First, Vesta claims that “CSMI knew that Vesta had previously

managed the property on March 19, 2014.” Id. at 25. Vesta points

to two portions of the record for support: (1) an email that Ms.

Scott (PSNC) forwarded to Ms. Ray (CSMI) on March 19, 2014

discussing PSNC’s termination of Vesta’s management agreement,

see id. (citing Ex. 4, ECF No. 29-3 at 160-62); and (2) CSMI’s

admission in its Rule 30(b)(6) deposition that, at the time it

started managing PSNC on March 19, 2014, it knew that Vesta had

previously been the property manager, see id. (citing Ex. 3, ECF

No. 29-3 at 51). Second, Vesta claims that “CSMI also knew of

the emergency contract between DHCD and Vesta no later than May

26
21, 2014.” Id. at 26. For proof, Vesta identifies an email

message on May 21, 2014 in which Ms. Jones (CSMI) asked Mr.

Kelly (DHCD) for “‘the specific legal authorization for the

‘emergency’ procurement, which is the basis that [DHCD] stated

Vesta was retained’” and a copy of the emergency contract. Id.

at 26 (quoting Ex. 5, ECF No. 29-3 at 164).

Contrary to Vesta’s suggestion, these facts are not new.

The D.C. Circuit considered these same facts in the Motion to

Dismiss proceedings and determined that these facts put CSMI “on

notice of its claims against the District” but did not “hint[]

at Vesta’s role in the contract’s termination.” CSMI II, 933

F.3d at 792. So, as CSMI asserts in its opposition briefing,

neither the fact that PSNC previously contracted with Vesta nor

the fact that DHCD gave the emergency contract to Vesta

“implicate[s] Vesta in any wrongdoing.” Pl.’s Opp’n, ECF No. 31

at 16. CSMI therefore did not have actual notice of Vesta’s

alleged wrongdoing in May 2014.

Vesta’s argument that CSMI had actual notice of Vesta’s

alleged wrongdoing before August 28, 2014 fares no better. To

support its August timeline, Vesta cites evidence obtained

through discovery 6 and the following facts:

1. CSMI knew about the emergency contract by May 21, 2014;

6 The Court will not consider the Washington Post article that
Vesta cites because it is inadmissible hearsay. See supra.
27
 2. CSMI never knew the basis for the emergency contract,

despite asking on May 21, 2014;

3. CSMI knew that DHCD terminated its contract without prior

notice;

4. Ms. Ray (CSMI) was informed by Ms. Scott (PSNC) on August

13, 2014 that Mr. Bailey (DHCD) and Mr. Willmarth (Vesta)

“have been friends for more then [sic] 40 years”;

5. On April 2, 2014, CSMI knew that Vesta told PSNC residents

that Vesta remained the property manager, and on April 4,

2014, CSMI responded to that letter;

6. CSMI believed that the emergency contract was pretextual as

of May 21, 2014;

7. CSMI “was aware as of April 28, 2014 that Vesta was

‘working behind the scene’ to oust CSMI from the property”;

8. CSMI knew that it had been ousted, that Vesta got the

emergency contract by May 2014, and that “individuals at

DHCD and Vesta had preexisting relationships” as of August

13, 2014.

Def.’s Mot., ECF No. 29 at 28-30 (citing several exhibits).

Together, Vesta claims, these facts “present insurmountable

proof”—and certainly more than “some evidence”—that CSMI had

actual notice before August 28, 2014. Id. at 30.

CSMI disputes the conclusion Vesta draws from that

evidence. The Court agrees with CSMI’s contention that points

28
one, two, three, and six implicate only the District, not Vesta,

in any wrongdoing. See Pl.’s Opp’n, ECF No. 31 at 16-17; CSMI

II, 933 F.3d at 792. The Court also agrees that Vesta’s fifth

point speaks only to the conflict between PSNC and Vesta and

does not involve CSMI. See Pl.’s Opp’n, ECF No. 31 at 17; see

also Def.’s Mot., ECF No. 29 at 30-31 (discussing Vesta’s

dispute with PSNC over the termination of its first contract).

Vesta’s remaining three points present a closer question as

to what CSMI might have known. However, “actual notice is that

notice which a plaintiff actually possesses.” Diamond, 680 A.2d

at 372 (internal quotation marks omitted). Evidence of a “pre-

existing relationship, as in points four and eight, means little

on its face.” Pl.’s Opp’n, ECF No. 31 at 18. Moreover, Vesta’s

most powerful fact—that CSMI “was aware as of April 28, 2014

that Vesta was ‘working behind the scene’ to oust CSMI from the

property,” Def.’s Mot., ECF No. 29 at 30 (quoting Ex. 14, ECF

No. 29-3 at 194); loses its luster upon review of the actual

statements in the exhibit, see Ex. 14, ECF No. 29-3 at 194 (Mr.

Smith (CSMI) emailed Ms. Ray (CSMI) to tell her that Ms. Scott

(PSNC) told him that the concierge’s “wife is one of the ring

leaders trying to get us and her out of here working behind the

scene with and for Vesta”). The fact that certain people at CSMI

had been told that the concierge’s wife was “working behind the

scene” with Vesta hardly indicates that CSMI actually knew Vesta

29
was tortiously interfering with its property management

contract. After all, “it was reasonable to assume that two

contracting parties, like DHCD and Vesta, communicated before

executing the emergency contract.” Def.’s Mot., ECF No. 29 at

30.

Accordingly, the Court concludes that CSMI did not have

actual notice of Vesta’s alleged wrongdoing as of August 28,

2014. 7

D. CSMI Had Inquiry Notice Before August 28, 2014

Finally, Vesta argues that CSMI had inquiry notice of

Vesta’s alleged wrongdoing before August 28, 2014. Def.’s Mot.,

ECF No. 29 at 31. It reasons that even if the facts it

marshalled do “not constitute actual notice, they certainly

should be enough for inquiry notice.” Id. at 33. CSMI claims

that Vesta conceded that there is no inquiry notice and that

Vesta’s own exhibits demonstrate that CSMI did not have inquiry

notice until sometime after August 28, 2014. For the reasons

below, the Court concludes that the undisputed material facts

demonstrate that CSMI had inquiry notice before August 28, 2014.

“In the District of Columbia, a plaintiff can be charged

with inquiry notice of his claims even if he is not actually

7 The Court notes briefly that CSMI’s reference to the standard
of review for a motion to dismiss under Rule 12(b)(6) is inapt.
See Pl.’s Opp’n, ECF No. 31 at 18-19. The Court is now bound by
the summary judgment standard discussed supra.
30
aware of each essential element of his cause of action.”

Cevenini, 707 A.2d at 771. Whereas “actual notice is that notice

which a plaintiff actually possesses; inquiry notice is that

notice which a plaintiff would have possessed after due

investigation.” Diamond, 680 A.2d at 372 (internal quotation

marks omitted). As the D.C. Circuit explained in the prior

proceedings in this case, inquiry notice “does not refer to ‘the

amount of information that triggers a duty to investigate,’ but

rather the ‘quantum of knowledge required to’ ‘charge[] [a

plaintiff] with knowledge of [his] cause of action[.]” CSMI II,

933 F.3d at 791 (quoting Diamond, 680 A.2d at 372) (other

citations omitted).

Vesta claims that CSMI had that “quantum of knowledge” to

charge it with knowledge of its cause of action against Vesta.

Specifically, Vesta contends that the eight points it listed to

charge CSMI with actual notice of its alleged wrongdoing also

prove that CSMI had inquiry notice before August 28, 2014 and

perhaps as early as May 2014. See Def.’s Mot., ECF No. 29 at 33;

see also Def.’s Reply, ECF No. 32 at 6-9. To elaborate on

Vesta’s theory: CSMI knew as of April 2, 2014 that Vesta

believed that it was “the only management company approved by

the Department of Community Housing and Development for the Park

Southern Apartment Complex.” Def.’s Mot., ECF No. 29 at 29

(quoting Ex. 11, ECF No. 29-3 at 186). CSMI knew as of May 21,

31
2014 that the District could not state any emergency that would

have given it the right to cancel CSMI’s contract and enter into

a new contract with Vesta. Id. at 28-30 (citing Ex. 3, ECF No.

29-3; Ex. 5, ECF No. 29-3; Ex. 7, ECF No. 29-3; Ex. 8, ECF No.

29-3). CSMI knew as of August 13, 2014 that “individuals at DHCD

and Vesta had preexisting relationships” and that two of those

individuals “ha[d] been friends for more then [sic] 40 years.”

Id. at 29-30 (citing Ex. 10, ECF No. 29-3). CSMI had even heard

that someone was “working behind the scene with and for Vesta.”

Ex. 14, ECF No. 29-3 at 194; Def.’s Mot., ECF No. 29 at 30.

CSMI contests that these facts provide a foundation for

inquiry notice. These facts, CSMI argues, charge it with notice

only of the District’s wrongdoing, not of Vesta’s alleged

wrongdoing. See Pl.’s Opp’n, ECF No. 31 at 21-22. This, however,

is not enough to overcome Vesta’s theory, which presents at

least the “quantum of knowledge” necessary to charge CSMI with

knowledge of Vesta’s alleged misconduct. Cf. CSMI II, 933 F.3d

at 792-93 (describing Vesta’s similar argument on appeal for the

Motion to Dismiss as “a really good argument”).

CSMI also points to facts from the record to suggest that

it had notice only of the District’s wrongdoing as of August 28,

2014. See Pl.’s Opp’n, ECF No. 31 at 21-23. Some of these facts

support CSMI’s lack of actual notice but do not foreclose the

possibility that CSMI had inquiry notice. See id. at 23

32
(discussing that the District did not disclose that it had met

with Vesta or provide their communications). The other facts

that CSMI cites prove that CSMI had notice of the District’s

wrongdoing. See id. at 22 (citing Ex. 5, ECF No. 29-3; Ex. 8,

ECF No. 29-3). Notice of the District’s wrongdoing and notice of

Vesta’s alleged wrongdoing are not mutually exclusive, though.

The Court concludes that there is no genuine dispute of

material fact as to whether CSMI possessed the “quantum of

knowledge” to charge it with knowledge of its cause of action

against Vesta before August 28, 2014. Therefore, the Court

concludes that CSMI had inquiry notice of Vesta’s alleged

wrongdoing before August 28, 2014. Because CSMI also had actual

notice of its injury and the cause in fact of that injury by May

3, 2014, see supra; its claims against Vesta accrued before

August 28, 2014, and the statute of limitations expired before

CSMI filed on August 28, 2017. Accordingly, the Court holds that

CSMI’s Complaint is untimely.

33
V. Conclusion

For the foregoing reasons, the Court GRANTS Defendant Vesta

Corporation’s Motion for Summary Judgment on the Statute of

Limitations, ECF No. 29.

An appropriate Order accompanies this Memorandum Opinion.

SO ORDERED.

Signed: Emmet G. Sullivan
United States District Judge
August 25, 2023

34