Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-07-07136/USCOURTS-caDC-07-07136-0/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 

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United States Court of Appeals 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 5, 2008 Decided March 6, 2009 

No. 07-7136 

ELLIOT WOLFF, PERSONALLY AND AS TRUSTEE OF THE TRUST 

ESTABLISHED UNDER ARTICLE III OF THE ESTATE OF EGON 

WOLFF, 

APPELLANTS

v. 

WESTWOOD MANAGEMENT, LLC, ET AL., 

APPELLEES

Appeal from the United States District Court 

for the District of Columbia 

(No. 06cv01234) 

 Leslie D. Alderman III argued the cause and filed the 

briefs for appellants. 

 Paul J. Kiernan argued the cause and filed the brief for 

appellees. 

 Before: ROGERS, BROWN and GRIFFITH, Circuit Judges. 

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Opinion for the Court filed by Circuit Judge BROWN. 

BROWN, Circuit Judge: This case concerns the shelf-life 

of an arbitration provision in a superseded contract. 

Appellant Elliot Wolff sued Westwood Management LLC 

and various related individuals and entities for breach of 

fiduciary duties and derivative claims. The district court 

dismissed the complaint, concluding—over Wolff’s vehement 

objections—that all of his claims were covered by a 

mandatory arbitration clause. Finding no error, we affirm. 

 

I. 

In 1971, Elliot Wolff’s father, Egon, invested in a real 

estate venture—the District of Columbia Joint Venture 

(DCJV)—organized by Dr. Laszlo Tauber that developed a 

piece of District real estate into an office building complex 

known as the Transpoint building. For his $20,000 

investment, Egon received an interest of 0.5% in the land and 

0.25% in the building. The agreement Egon signed when he 

invested in the DCJV (DCJV Agreement) contained an 

arbitration clause, providing that “[t]he parties agree not to 

enter into any court action in any dispute which may arise 

during construction and management of the office building 

complex and agree that any dispute or controversy that cannot 

be amicably settled will be submitted to arbitration[.]” 

Egon Wolff died in November 1984, and his interest in 

the DCJV passed to the appellants, Elliot Wolff and a trust 

established from Egon’s estate. On December 6, 1984, Dr. 

Tauber wrote a letter to the DCJV investors, along with those 

who had invested in other ventures he had organized, 

informing them that his “long standing goal has been to 

merge all the partnerships into one single partnership. This 

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must be achieved now with no further delay.” The letter 

made the merger “effective the 1st of January, 1985,” and 

gave the investors four options: to sell their interest, to 

become a class “B” partner in the new entity, to become a 

class “C” partner in the new entity, or—for anyone who 

“ha[d] second thoughts and [wa]s not willing to cooperate”—

to “put his/her interest in trust.” The new entity, referred to as 

the Consolidated Partnership, was reorganized into various 

other entities over time. 

Though the record is silent on this point, the parties agree 

Elliot Wolff declined to join the Consolidated Partnership. 

Wolff alleges he asked Dr. Tauber to hold his DCJV interest 

in trust. As a result, Wolff was not a party to the 

Consolidated Partnership agreement nor was he an owner of, 

or investor in, any of the successor entities. Rather, his 

ownership interest of 0.5% in the land and 0.25% in the 

building that made up the Transpoint Building complex, 

acquired via the DCJV Agreement, was held for him in trust 

by Dr. Tauber and his successors. 

After Dr. Tauber died in 2002, management and control 

of all the ventures stemming from the Consolidated 

Partnership went to appellee Westwood Management. In 

February 2004, Westwood Management sold the Transpoint 

Building and the adjacent land and paid the investors. Wolff 

filed this lawsuit in 2006: 

alleging breach of fiduciary duty and 

derivative claims, all resulting from the 

management and sale of the Transpoint 

building and the adjacent lot. He alleges that 

defendants used funds from various mortgages 

and refinances of the Transpoint building and 

the adjacent lot for purposes other than for use 

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by and for the Transpoint building and that 

adjacent lot; specifically, to make 

improvements to other properties and for 

defendants’ enrichment. 

Wolff v. Westwood Mgmt., 503 F. Supp. 2d 274, 278 (D.D.C. 

2007). 

The district court granted defendants’ motion to compel 

arbitration. In response to Wolff’s argument that the DCJV 

Agreement and its arbitration clause were extinguished by the 

creation of the Consolidated Partnership, the district court 

concluded the agreement to arbitrate survived the expiration 

of the DCJV Agreement and applied to this dispute. Id. 

at 281. The district court reasoned “[t]he obligations at issue 

in this case can only have arisen from the DCJV Agreement 

because there was no other agreement with defendants that 

Wolff entered into.” Id. The district court noted that if the 

arbitration clause was to be read broadly—“any dispute or 

controversy . . . will be submitted to arbitration”—then it 

encompasses all matters that touch upon the contract. Id. 

at 282. If read narrowly—“any dispute which may arise 

during construction and management of the office building 

complex”—then it covers only specified types of disputes. 

Id. The dispute at issue in this case was covered under either 

reading of the arbitration clause. Id. at 283. The court 

therefore concluded the parties had entered into a valid and 

enforceable arbitration agreement that covered the claims in 

this case, and dismissed the complaint. This appeal followed. 

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II. 

The “determination that the parties have contractually 

bound themselves to arbitrate disputes—a determination 

involving interpretation of state law—is a legal conclusion 

subject to our de novo review, ... but the findings upon which 

that conclusion is based are factual and thus may not be 

overturned unless clearly erroneous.” Bailey v. Fed. Nat’l 

Mortgage Ass’n, 209 F.3d 740, 744 (D.C. Cir. 2000). Under 

District of Columbia law, “arbitration is predicated on the 

consent of the parties to a dispute, and the determination of 

whether the parties have consented to arbitrate is a matter to 

be determined by the courts on the basis of contracts between 

the parties.” Bailey, 209 F.3d at 746; see also Air Line Pilots 

Ass’n v. Fed. Express Corp., 402 F.3d 1245, 1248 (D.C. Cir. 

2005). 

“[A]n order to arbitrate [a] particular grievance should 

not be denied unless it may be said with positive assurance 

that the arbitration clause is not susceptible of an 

interpretation that covers the asserted dispute. Doubts should 

be resolved in favor of coverage.” Air Line Pilots Ass’n, 402 

F.3d at 1248 (quoting United Steelworkers of America v. 

Warrior & Gulf Nav. Co., 363 U.S. 574, 582–83 (1960)). 

“The Arbitration Act establishes that, as a matter of federal 

law, any doubts concerning the scope of arbitrable issues 

should be resolved in favor of arbitration, whether the 

problem at hand is the construction of the contract language 

itself or an allegation of waiver, delay, or a like defense to 

arbitrability.” Moses H. Cone Memorial Hosp. v. Mercury 

Constr. Corp., 460 U.S. 1, 24–25 (1983). 

Wolff contends the arbitration clause in the DCJV 

Agreement does not apply to this dispute because the 

agreement terminated in 1985. And, appellants argue, their 

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claims arise under the alleged trust; not the DCJV. But, as the 

district court observed, “an arbitration clause is enforceable 

after the expiration of a contract when the dispute is over an 

obligation created by the contract.” Wolff, 503 F. Supp. 2d 

at 280. We agree. 

The Supreme Court has observed that “a party cannot be 

compelled to arbitrate any matter in the absence of a 

contractual obligation to do so. Adherence to these 

principles, however, does not require us to hold that 

termination of a collective-bargaining agreement 

automatically extinguishes a party’s duty to arbitrate 

grievances arising under the contract.” Nolde Bros. v. Local 

No. 358, Bakery and Confectionery Workers Union, 430 U.S. 

243, 250–51 (1977). “[E]ven though the parties could have 

so provided, there is nothing in the arbitration clause that 

expressly excludes from its operation a dispute which arises 

under the contract, but which is based on events that occur 

after its termination.” Id. at 252–53. Moreover, the Court in 

Nolde Bros. found a “presumption in favor of postexpiration 

arbitration of matters unless ‘negated expressly or by clear 

implication,’ but that conclusion was limited by the vital 

qualification that arbitration was of matters and disputes 

arising out of the relation governed by contract.” Litton Fin. 

Printing Div. v. NLRB, 501 U.S. 190, 204 (1991) (quoting and 

discussing Nolde Bros., 430 U.S. at 255) (emphasis added). 

With these principles in mind, it is easy to see the district 

court did not err when it held the “agreement to arbitrate 

manifested in the DCJV Agreement survives termination of 

the DCJV Agreement and that it applies to this controversy.” 

Wolff, 503 F. Supp. 2d at 281. The claims in this case, after 

all, “can only have arisen from the DCJV Agreement because 

there was no other agreement with [appellees] that Wolff 

entered into.” Id. Even assuming a valid trust was created 

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under District of Columbia law when the DCJV Agreement 

terminated in 1985, appellants’ claims are “disputes arising 

out of the relation governed by the contract,” Litton Fin. 

Printing Div., 501 U.S. at 204, because the Wolffs’ ownership 

interest in the land and the building—the res of the alleged 

trust—was created under the DCJV Agreement. We conclude 

that the agreement to arbitrate “any dispute which may arise 

during construction and management of the office building 

complex” survived the expiration of the DCJV Agreement 

and compels appellants to submit their claims to arbitration. 

The remainder of appellants’ arguments can be dismissed 

in short order. Appellants’ unclean hands argument goes to 

the merits of their claims rather than their arbitrability. There 

is no allegation that appellees have unclean hands with 

respect to the agreement to arbitrate itself. “[I]n deciding 

whether the parties have agreed to submit a particular 

grievance to arbitration, a court is not to rule on the potential 

merits of the underlying claims.” Air Line Pilots Ass’n, 402 

F.3d at 1248; see also Prima Paint Corp. v. Flood & Conklin 

Mfg. Co., 388 U.S. 395, 406 (1967) (allegation of fraud in the 

inducement of a contract is arbitrable, at least absent a claim 

of fraud in the inducement of the agreement to arbitrate). The 

district court did not abuse its discretion in refusing 

appellants’ request for discovery under Rule 56(f) of the 

Federal Rules of Civil Procedure. The appellants failed to 

demonstrate, both to the district court and on appeal, how 

discovery related to the merits of the claims would have 

assisted them in opposing the motion to compel arbitration. 

Appellants also argue that the DCJV Agreement’s arbitration 

clause lacks sufficient detail as to the material terms of the 

agreement. This argument, which was not presented to the 

district court, is not properly before us. See, e.g., Albrecht v. 

Comm. on Employee Benefits of Fed. Reserve Employee 

Benefits Sys., 357 F.3d 62, 66 (D.C. Cir. 2004) (argument not 

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presented to the district court ordinarily waived on appeal); 

District of Columbia v. Air Florida, Inc., 750 F.2d 1077, 1084 

(D.C. Cir. 1984) (same) (citing cases). The same is true of 

appellants’ argument that the district court erred by 

dismissing this case rather than staying it under Section 3 of 

the Federal Arbitration Act; no one requested a stay from the 

district court. 

III. 

Accordingly, the order of the district court compelling 

arbitration and dismissing the complaint is 

 Affirmed. 

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