Court Opinion

ID: 6113069
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Date Created: 2022-01-27 15:02:29.110829+00
Date Added: 2024-06-11T09:17:22.604913
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             DISTRICT OF COLUMBIA COURT OF APPEALS

                                 No. 19-CV-0861

                        MOBILIZEGREEN, INC., APPELLANT,

                                        V.

                            COMMUNITY FOUNDATION
                       FOR THE CAPITAL REGION, APPELLEE.

                         Appeal from the Superior Court
                          of the District of Columbia
                                 (CAB5764-14)

       (Hon. Neal E. Kravitz & Hon. Fern Flanagan Saddler, Trial Judges)

(Argued January 12, 2021                                Decided January 27, 2022)

      Jeffrey D. Robinson, with whom Surya Kundu was on the brief, for
appellant.

      Matthew W. Edwards for appellee.

      Before BECKWITH and DEAHL, Associate Judges, and FISHER, Senior Judge.

      DEAHL, Associate Judge:         MobilizeGreen was an upstart charitable

organization with a mission “to build the next generation of environmental leaders,”

particularly those from “under-represented communities.” In 2011, it sought to
                                          2

create a national diversity internship program using funds from the United States

Forest Service. Because MobilizeGreen had not been approved as a charitable

organization under 26 U.S.C. § 501(c)(3), however, the Forest Service indicated it

could not disperse funds directly to MobilizeGreen, which would need to engage a

fiscal sponsor to receive and manage any funds. MobilizeGreen enlisted a reluctant

Community Foundation for the Capital Region to serve as its fiscal sponsor for what

the parties agreed would be a brief three-month period. For reasons detailed below,

that fraught relationship lasted more than a year, to both parties’ chagrin.

      MobilizeGreen eventually filed a lawsuit in D.C. Superior Court alleging, as

is relevant here, that (1) the Community Foundation breached the parties’ agreement

when it failed to transfer the fiscal sponsorship to a third party at the conclusion of

the three-month arrangement, and (2) the Community Foundation breached a

fiduciary duty to MobilizeGreen by mismanaging the Forest Service funds. The

Community Foundation moved for summary judgment on those claims, and the trial

court granted its motion. It ruled that it was MobilizeGreen, not the Community

Foundation, that was contractually obligated but failed to transfer the fiscal

sponsorship to a third party. The trial court also determined that the Community

Foundation did not have a fiduciary relationship with MobilizeGreen, but that the

extent of their relationship was limited to their contractual agreement.
                                         3

MobilizeGreen challenges both of those rulings on appeal, contending there were

genuine disputes of material fact that precluded summary judgment as to each claim.

We disagree and affirm.

                                         I.

      In 2011, MobilizeGreen was a start-up organization with a mission “to build

the next generation of environmental leaders, stewards, and volunteers from under-

represented communities using . . . [an] innovative internship, mentorship, career

coaching, and collaborative partnership model.” It sought to establish an internship

pilot program funded by the United States Forest Service. It was not eligible to

receive the contemplated funds from the Forest Service, however, because it was not

recognized as a tax-exempt charitable organization under 26 U.S.C. § 501(c)(3). To

proceed with its plans, MobilizeGreen needed an established § 501(c)(3)

organization to serve as its fiscal sponsor. It approached the Community Foundation

to serve as that fiscal sponsor.

      The Community Foundation, concerned over its ability to comply with certain

government contracting and audit requirements, initially declined MobilizeGreen’s

request. MobilizeGreen’s President and CEO, Leah Allen, persisted. In an effort to

alleviate the Community Foundation’s concerns, Allen proposed a temporary fiscal
                                           4

sponsorship arrangement, from late July through November 1, 2011.                   That

agreement would permit the Forest Service to finalize approval of the funding,

though Allen promised the Community Foundation that MobilizeGreen would either

attain its § 501(c)(3) status, find an alternative sponsor, or terminate its relationship

with the Community Foundation “prior to the receipt of actual funding.” The

Community Foundation accepted Allen’s proposal.

      The parties then executed a fiscal sponsorship agreement. Under the terms of

the agreement, the parties agreed to create a “Sponsored Program Fund,” the funds

for which MobilizeGreen would “irrevocably” give to the Community Foundation

to administer as a “temporary fiscal sponsor[].” Paragraph 4 of the agreement states

the fund’s sole “purpose” as “further[ing] or carry[ing] out the educational and

charitable uses and purposes of the [Community] Foundation,” as “specifically set

forth in its articles of incorporation and bylaws.”        Under Paragraph 8 of the

agreement, the fiscal sponsorship was “not to exceed November 1, 2011, at which

time the Organization [MobilizeGreen] will transfer to another fiscal sponsor.”

Shortly thereafter, the Community Foundation entered into a “Cost Share

Agreement” with the Forest Service under which the Forest Service would reimburse

the Community Foundation up to $252,805 for the costs of the internship program.
                                          5

That agreement between the Community Foundation and the Forest Service was

“effective through September 30, 2012.” MobilizeGreen was not a party to it.

      In October 2011, prior to disbursement of any Forest Service funds,

MobilizeGreen entered into a Memorandum of Understanding with a proposed

replacement fiscal sponsor, Social and Environmental Entrepreneurs.              The

Community Foundation “agreed, pending Forest Service approval, to allow

[MobilizeGreen] to shift fiscal sponsorship to” that new fiscal sponsor. This transfer

could not be completed, however, without the Forest Service’s consent. This was

because the Cost Share Agreement between MobilizeGreen and the Community

Foundation was subject to the Anti-Assignment Act, which provides that a

government contract, or any interest under one, cannot be transferred from one party

to another unless the government first consents to the transfer. 41 U.S.C. § 6305(a);

Vermont Yankee Nuclear Power Corp. v. Entergy Nuclear Vermont Yankee, LLC,

683 F.3d 1330, 1339 (Fed. Cir. 2012) (“[G]overnment may consent to or waive any

objections it may have to assignments.”) (interpreting prior codification of

§ 6305(a)).

      The Forest Service did not provide the required consent because, perhaps

among other reasons, nobody asked it to until many months later. It was not until
                                          6

the following March that Allen finally emailed the Forest Service and requested its

consent to the transfer. She explained in her email that the Community Foundation

had already agreed to transfer the fund and fiscal sponsorship to a substitute sponsor.

Nonetheless, the Forest Service denied that initial transfer request. Some months

later, around July 2012, the Forest Service agreed to transfer the grant to another

fiscal sponsor effective October 1, 2012, the day after the Cost Share Agreement

between it and the Community Foundation expired. The Community Foundation

thus remained as fiscal sponsor through September 30, 2012.

      Two years later, MobilizeGreen sued the Community Foundation in the

Superior Court of the District of Columbia. It claimed (1) breach of contract, owing

to the Community Foundation’s failure to transfer the fiscal sponsorship to a

substitute party, and (2) breach of fiduciary duty, relating to the Community

Foundation’s alleged mismanagement of Forest Service funds. Following years of

litigation—during which the case was removed to federal court and then remanded

to the Superior Court 1—the trial court granted the Community Foundation’s motion

for summary judgment as to those claims. It determined that it was MobilizeGreen,

not the Community Foundation, that had a contractual obligation to effectuate the

      1
       See MobilizeGreen, Inc. v. Cmty. Found. for the Nat’l Capital Region, 101
F. Supp. 3d 36 (D.D.C. 2015).
                                          7

transfer of the fiscal sponsorship to a substitute party, and it further held that the

Community Foundation owed no fiduciary duty to MobilizeGreen. MobilizeGreen

now brings this appeal challenging those rulings. 2

                                         II.

      We review a trial court’s grant of summary judgment de novo. Ukwuani v.

District of Columbia, 241 A.3d 529, 541 (D.C. 2020). In doing so, we conduct “an

independent review of the record” and apply the same standard as the trial court in

considering the underlying motion. Critchell v. Critchell, 746 A.2d 282, 284 (D.C.

2000). The moving party, the Community Foundation, is entitled to summary

judgment only upon demonstrating that “no genuine issue of material fact remains

for trial” and that judgment is warranted “as a matter of law.” Phenix-Georgetown,

Inc. v. Charles H. Tompkins Co., 477 A.2d 215, 221 (D.C. 1984). “[W]e examine

all evidence in the light most favorable to” the non-moving party, MobilizeGreen.

Cain v. Reinoso, 43 A.3d 302, 307 (D.C. 2012). We will reverse a grant of summary

      2
        One of MobilizeGreen’s claims—a claim for negligent supervision—
survived the trial court’s summary judgment rulings. However, MobilizeGreen
subsequently filed an unopposed motion to dismiss that claim and for entry of final
judgment, which the trial court granted, paving the way for this appeal.
                                         8

judgment if the record would permit a reasonable fact-finder to properly render a

verdict in the non-moving party’s favor. Id.

                                         A.

      We begin with MobilizeGreen’s breach of contract claim. MobilizeGreen

contends there were genuine issues of material fact regarding whether the

Community Foundation failed to uphold a contractual obligation to transfer the fiscal

sponsorship to a third party. More specifically, it contends that a reasonable jury

could have concluded the Community Foundation breached the fiscal sponsorship

agreement by failing to obtain the Forest Service’s consent to transfer the sponsored

fund and the fiscal sponsorship to a replacement sponsor by the November 1, 2011,

deadline.   We disagree.     Instead, we agree with the trial court that it was

MobilizeGreen’s obligation to bring about that transfer and that no reasonable jury

could have concluded otherwise.

      A contract’s “proper interpretation, including whether or not it is ambiguous,”

is a question of law, subject to de novo review. District of Columbia v. Young, 39

A.3d 36, 40 (D.C. 2012). “[W]e examine the document on its face, giving the

language used its plain meaning.” Dyer v. Bilaal, 983 A.2d 349, 355 (D.C. 2009)

(internal quotation marks omitted). The “written language” of the agreement “will
                                           9

govern the rights and liabilities of the parties” unless it is ambiguous or inoperative.

Abdelrhman v. Ackerman, 76 A.3d 883, 888 (D.C. 2013) (citation and internal

quotation marks omitted).

      The fiscal sponsorship agreement’s pertinent provision, Paragraph 8, states

that “[t]his fund is established to provide temporary fiscal sponsorship for a period

not to exceed November 1, 2011, at which time the Organization [MobilizeGreen]

will transfer to another fiscal sponsor.” There is some ambiguity in the final clause

of that sentence, as it is not entirely clear if MobilizeGreen is the subject that “will

transfer” or the object that “will transfer.”       Either reading is imperfect.      If

MobilizeGreen is the subject transferor, the contract does not specify what exactly

it “will transfer to another fiscal sponsor,” though it would appear to refer back to

the fund and fiscal sponsorship mentioned earlier in the sentence. If MobilizeGreen

is the thing that will transfer to another fiscal sponsor, then the clause does not

specify who is to perform the transfer.

      We agree with the trial court that the contract is ambiguous on the point. It is

fairly susceptible to either reading, including one in which MobilizeGreen is the

thing to be transferred to another fiscal sponsor (rather than the transferor charged

with transferring the fund and sponsorship). Under that reading, the contract does
                                         10

not specify which party is responsible for making sure the transfer happens. Given

the ambiguity, we may look to extrinsic evidence to elucidate the parties’ intentions.

See Aziken v. District of Columbia, 70 A.3d 213, 219 (D.C. 2013). While summary

judgment is often improper when extrinsic evidence is needed to resolve some

contractual ambiguity, that is not always the case. Id. Summary judgment may yet

be appropriate where “the non-moving party fails to point to any relevant extrinsic

evidence supporting that party’s interpretation of the language.” Id.

      Here, the extrinsic evidence uniformly supports the view that it was

MobilizeGreen that took on the obligation to transfer the fiscal sponsorship and

sponsored fund to a third party. Most critically, when Allen came to the Community

Foundation with the proposed temporary sponsorship arrangement, she did so with

a “guarantee to the Foundation that [MobilizeGreen] will have our 501(c)(3) status,

have another fiscal sponsor, or will terminate the agreement prior to the receipt of

actual funding.” (emphasis added). Allen’s guarantee that MobilizeGreen would

“have another fiscal sponsor” is incompatible with the view that it was the

Community Foundation’s obligation to bring that substitute sponsorship to fruition.

Moreover, MobilizeGreen acted consistently with an understanding that it was its

obligation to effectuate the transfer. It gave no contemporaneous indications that it

was the Community Foundation’s obligation to seek the Forest Service’s consent,
                                          11

but instead took upon itself to ask the Forest Service for its consent to the transfer,

albeit quite belatedly. While MobilizeGreen now contends a jury might see that as

a last-ditch effort to “salvage” a transfer that the Community Foundation had failed

to shepherd through, there is simply no evidence that would permit a reasonable jury

to draw that conclusion.

      Because MobilizeGreen is the party charged with transferring the fiscal

sponsorship and the sponsored fund, it likewise had the duty to seek any requisite

consent from the Forest Service in order to complete the contemplated transfer.

“[A]bsent language in the contract to the contrary, ‘[a] party who contracts knowing

that governmental permission or license will be required’” to carry out its contractual

duties “ordinarily assumes the obligation of assuring that permission will be

granted.” Mind & Motion Utah Invs., LLC v. Celtic Bank Corp., 367 P.3d 994, 1003

(Utah 2016) (quoting 14 James P. Nehf, Corbin on Contracts § 76.5 (2001)); Colo.

Env’ts, Inc. v. Valley Grading Corp., 779 P.2d 80, 82 (Nev. 1989) (endorsing jury

instruction that “[u]nder Nevada law, one who contracts to render a performance for

which government approval is required has the duty of obtaining such approval”);

see also Sacramento Navigation Co. v. Salz, 273 U.S. 326, 329 (1927) (a contract

includes “not only the promises set forth in express words,” but all “implied

provisions” arising from the contractual language that “are indispensable to
                                           12

effectuate the intentions of the parties”) (citing S. Williston, 3 Williston on Contracts

§ 1293 (1920)); accord In re McCagg’s Estate, 450 A.2d 414, 416-17 (D.C. 1982)

(collecting authorities).

      MobilizeGreen persists that a trier of fact could conclude that it was the

Community Foundation’s obligation to seek the Forest Service’s consent to the

transfer because the Community Foundation alone was party to the Cost Share

Agreement with the Forest Service. That is beside the point. There is no dispute

that the Community Foundation, as a party to the Cost Share Agreement, was bound

to cooperate with the contemplated transfer and not obstruct it; MobilizeGreen might

have had a viable breach of contract claim had the Community Foundation withheld

its consent to such a transfer. But the evidence is undisputed that it complied with

that obligation.      It “agreed, pending Forest Service approval, to allow

[MobilizeGreen] to shift fiscal sponsorship” to a replacement sponsor.              The

Community Foundation’s obligation to cooperate with such a transfer in no way

suggests the onus was on it to conduct the necessary outreach to secure the Forest

Service’s consent in the first place. Because the Community Foundation owed no

contractual duty to MobilizeGreen to proactively effectuate the transfer of the fiscal

sponsorship and sponsored fund, it did not breach any obligation to do so. The trial
                                            13

court was correct to grant summary judgment in the Community Foundation’s favor

on the breach of contract claim.

                                            B.

      MobilizeGreen next contends that the trial court erred in granting summary

judgment on its breach of fiduciary duty claim. In its view, the existence of a

fiduciary relationship is a fact-specific inquiry, unfit for summary adjudication,

especially where the parties maintained a relationship of trust and confidence.

MobilizeGreen maintains there was sufficient evidence that the parties had a

fiduciary relationship to preclude summary judgment on the issue. We think the

evidence is dispositive to the contrary. To be sure, the existence of a fiduciary

relationship tends to be “a fact-intensive question” where summary judgment is

often inapt. Firestone v. Firestone, 76 F.3d 1205, 1211 (D.C. Cir. 1996). Yet, as

we have made clear, summary judgment is appropriate on a breach of fiduciary duty

claim where the uncontroverted record reveals that the defendant did not undertake

a duty to act for the plaintiff’s benefit. See, e.g., Fogg v. Fid. Nat’l Title Ins. Co., 89

A.3d 510, 513-14 (D.C. 2014) (affirming summary judgment against fiduciary duty

claim); Geiger v. Crestar Bank, 778 A.2d 1085, 1095 (D.C. 2001) (same); Newmyer
                                           14

v. Sidwell Friends Sch., 128 A.3d 1023, 1037 n.10 (D.C. 2015) (same). That is the

case here.

      “A fiduciary relationship is founded upon trust or confidence reposed by one

person in the integrity and fidelity of another.” Bolton v. Crowley, Hoge & Fein,

P.C., 110 A.3d 575, 584 (D.C. 2015) (citation and internal quotation marks omitted);

see also Restatement (Second) of Torts § 874 (1979). In some sense all contracting

parties put their faith in one another to fulfill their contract’s obligations, but it is

black-letter law that “[t]he act of . . . entering into a contractual relationship” does

not without more give rise to “a fiduciary duty beyond the terms” of the agreement.

Fogg, 89 A.3d at 513-14. When parties have contracted with one another, the

existence of a fiduciary relationship “depend[s] on whether the parties, through the

past history of the relationship and their conduct, had extended the relationship

beyond the limits of the contractual obligations.” Geiger, 778 A.2d at 1095 (citation

and internal quotation marks omitted); see also Democracy Partners v. Project

Veritas Action Fund, 453 F. Supp. 3d 261, 279 (D.D.C. 2020) (courts “have

traditionally looked for [] a ‘special confidential relationship’ that transcends an

ordinary business transaction”) (collecting cases).
                                          15

      Contrary to MobilizeGreen’s argument, the undisputed facts show that the

parties’ relationship was fully set forth within the four corners of their contract. As

Allen herself admitted in her deposition, “whatever the [parties’] relationship was

supposed to be, it was in that document,” the fiscal sponsorship agreement. The

contract itself states that (1) MobilizeGreen “irrevocably” “gift[ed]” the fund to the

Community Foundation, (2) the Community Foundation would “administer” the

fund subject only to its own “governing instruments, including its articles of

incorporation and bylaws,” and (3) the sole purpose of the contract was to “further

or carry out the educational and charitable uses and purposes of the [Community]

Foundation,” without mention of advancing MobilizeGreen’s interests. The contract

thus contradicts any suggestion that the Community Foundation was to administer

the fund for MobilizeGreen’s benefit.

      MobilizeGreen nonetheless stresses extrinsic evidence of an extra-contractual

fiduciary relationship, principally, that the Community Foundation was the more

sophisticated party and knew that MobilizeGreen was putting trust in it, beyond

fulfilling contractual terms. Even if we put aside Allen’s admission to the contrary—

that the extent of the parties’ relationship “was in that document”—the extrinsic facts

are incompatible with MobilizeGreen’s view. It was MobilizeGreen that devised

this temporary fiscal sponsorship and pressed the Community Foundation to agree
                                          16

to it despite its initial refusal to do so, not the other way around. More importantly,

MobilizeGreen persuaded the Community Foundation to enter into the agreement

only by assuring it that the fiscal sponsorship would terminate before the actual

receipt of federal funds. That, like the contract the parties ultimately signed, belies

any suggestion that MobilizeGreen was placing its trust in how the Community

Foundation would administer the Forest Service funds; MobilizeGreen did not

anticipate the Community Foundation would ever receive those funds, and instead

guaranteed that it would not. The Community Foundation, for its part, never agreed

to administer the Forest Service funds for MobilizeGreen’s benefit. It hoped to avoid

administering the funds at all, but it further made clear in the fiscal sponsorship

agreement that its obligation if tasked with administering the fund was to further its

own interests and purposes, not MobilizeGreen’s. There is no extrinsic evidence to

the contrary.

      MobilizeGreen persists that even if the parties did not initially have a fiduciary

relationship, once the temporary fiscal sponsorship expired without the anticipated

transfer to a third party, a fiduciary relationship then arose. 3 But there is no reason

      3
         MobilizeGreen did not make this argument in its briefs, though it raised it in
the trial court and then advanced it at oral argument on appeal. Given its failure to
raise the argument in its briefs, “we need not consider it,” but exercise our discretion
to do so here. In re Zdravkovich, 831 A.2d 964, 972 (D.C. 2003).
                                          17

to think the parties’ initial contractual and non-fiduciary relationship somehow

transformed at that point. “When a contract lapses but the parties to the contract

continue to act as if they are performing under a contract, the material terms of the

prior contract will survive intact unless either one of the parties clearly and

manifestly indicates” otherwise. Hahn v. Univ. of District of Columbia, 789 A.2d

1252, 1258 (D.C. 2002) (quoting Luden’s, Inc. v. Local Union No. 6, Bakery,

Confectionery & Tobacco Workers’ Int’l Union, 28 F.3d 347, 355-56 (3d Cir.

1994)); see also Fairbrook Leasing, Inc. v. Mesaba Aviation, Inc., 408 F.3d 460, 467

(8th Cir. 2005) (“When an agreement expires by its terms, if, without more, the

parties continue to perform as theretofore, an implication arises that they have

mutually assented to a new contract containing the same provisions as the old.”)

(quoting Martin v. Campanaro, 156 F.2d 127, 129 (2d Cir. 1946)).

      There is nothing to suggest the Community Foundation accepted any new

fiduciary obligations at the end of the anticipated contractual term. To the contrary,

the evidence establishes that it sought to avoid being in a position to administer the

Forest Service funds at all, but was unwillingly thrust into that role by

MobilizeGreen’s failure to take the steps necessary to transfer the fiscal sponsorship

to a third party. See supra Part II.A. As in Geiger, “[w]e detect no facts in this case
                                           18

detailing a history of interaction between [the parties] which extended their

relationship beyond the provisions” of the contract. 778 A.2d at 1095.

      Finally, we note but do not consider the trial court’s alternative rationale for

granting summary judgment on the breach of fiduciary duty claim. The trial court

reasoned, in the alternative, that the fiscal sponsorship agreement had to be

interpreted as compliant with § 501(c)(3), because it expressly provided that the

Community Foundation would administer the sponsored fund subject to its

“governing instruments, including its articles of incorporation and bylaws,” which

establish it as a § 501(c)(3) organization. The court further reasoned that its

§ 501(c)(3) status precluded the Community Foundation from taking on fiduciary

duties to MobilizeGreen because § 501(c)(3) required it to be “organized and

operated exclusively for . . . charitable . . . or educational purposes.”    For the

Community Foundation to take on fiduciary obligations to another organization

would impermissibly subordinate its exclusive charitable mission to its obligations

to a third party, or so the reasoning goes. 4

      4
        One counterpoint is that there may be no conflict between a § 501(c)(3)’s
charitable mission and its fiduciary obligations to a third party, as MobilizeGreen
contends was the case here, so that the charitable mission is in no way rendered
subservient to a fiduciary duty to another.
                                        19

      While the parties spend a substantial portion of their briefs debating the

soundness of that reasoning, we ultimately have no occasion to resolve that dispute.

See Bailey v. United States, 385 A.2d 32, 36 (D.C. 1978) (invoking the judicial

preference for predicating holdings “on narrower grounds”); see also City of Ontario

v. Quon, 560 U.S. 746, 760 (2010) (disposing of cases “on narrower grounds” is

“preferable” where a “broad holding” might have far-reaching “implications for

future cases that cannot be predicted”). Whether or not the Community Foundation

could have taken on fiduciary obligations to MobilizeGreen consistent with its

obligations under § 501(c)(3), the evidence permitted but one conclusion—that it

did not do so here.

                                        III.

      The trial court’s judgment is affirmed.

                                                                So ordered.