Court Opinion

ID: 4666305
Source: CourtListenerOpinion
Date Created: 2021-03-10 04:00:44.61286+00
Date Added: 2024-06-11T08:02:48.372024
License: Public Domain

UNITED STATES DISTRICT COURT
                              FOR THE DISTRICT OF COLUMBIA

 LAW OFFICES OF ARMAN DABIRI &
 ASSOCIATES P.L.L.C.,

                Plaintiff,

        v.                                                Civil Action No. 17-2497 (RDM)

 AGRICULTURAL BANK OF SUDAN, et
 al.,

                Defendants.

                             MEMORANDUM OPINION AND ORDER

       In this case, a law firm is suing one of its former clients for $200,000 in unpaid fees.

Their dispute is now before the Court on dueling dispositive motions. Plaintiff, the Law Offices

of Arman Dabiri & Associates, P.L.L.C. (“Dabiri”), seeks summary judgment under Federal

Rule of Civil Procedure 56. Dkt. 53. Defendant, the Agricultural Bank of Sudan (“ABS”),

moves to dismiss under Federal Rule of Civil Procedure 12(b)(6). Dkt. 50.

       For the reasons that follow, both motions will be DENIED.

                                      I. BACKGROUND

       For purposes of the pending motions, the following facts are uncontested, except as

otherwise noted. In March 2017, ABS contacted Dabiri seeking legal representation and counsel

in the United States. Dkt. 1 at 6 (Compl. ¶ 17). At the time, the United States was “loosening

. . . sanctions against Sudan,” which had long been designated as “a State Sponsor of Terrorism,”

“on a probationary basis.” Id. at 4, 6 (Compl. ¶¶ 10, 16). On April 27, 2017, ABS sent Dabiri a

“Letter of Interest,” seeking legal assistance “establishing relationships with the USA and US

financial [institutions]” and “completing the removal of [US] sanctions.” Id. at 6 (Compl. ¶ 18)
(second alteration in original). Accordingly, on May 5, 2017, ABS and Dabiri “executed a

Retainer Agreement,” id. at 7 (Compl. ¶ 19), which set forth the following terms:

       1.     Counsel will provide the following services to ABS:
              a.      Serve as the attorney of record and provide legal services in
                      connection with achieving the above state[d] goals for ABS.
              b.      Serve as legal Counsel in any meeting or negotiations between
                      ABS and the United States Government or any of its
                      departments and/or agencies.
              c.      Serve as legal Counsel in drafting any necessary agreements,
                      accords, treaties or understandings between ABS and the
                      United States Government or any of its departments and/or
                      agencies.
              d.      Serve as legal counsel in any meeting or negotiations with US
                      financial institutions.
              [e].    Serve as legal Counsel in negotiating, reviewing,
                      drafting/editing of necessary contracts or agreements with US
                      financial institutions.
              [f].    Serve as legal Counsel in any disputes between ABS and the
                      United States Government or any of its departments and/or
                      agencies.
              [g].    Serve as legal Counsel in any disputes between ABS and US
                      financial institutions and entities.

Dkt. 53-2 at 2 (Ex. A); see also Dkt. 53-1 at 1 (Pl.’s SUMF ¶ 1). The agreement also included a

provision captioned “computation of fees,” which provided:

       3.     In consideration for the services rendered and to be rendered on ABS’s
              behalf by Counsel, the ABS hereby agrees to pay a lump sum agreed
              upon fee. The factors to be considered as guides in determining the
              reasonableness of a fee and agreed upon and understood by the ABS
              are set out in the District of Columbia Rules of Professional Conduct
              as well as the following:

              a.      The time and labor required, the novelty and difficulty of the
                      questions involved and the skill requisite to perform the legal
                      services promptly.

              b.      The likelihood that the acceptance of the particular employment
                      will preclude other employment by the Counsel.

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               c.      The fee customarily charged in the locality for similar services.

               [d.]    The time limitations imposed by ABS or by the circumstances.

               [e.]    The nature and length of the professional relationship with
                       ABS.
       4.      Counsel will require a retainer of $200,000 USD. The retainer fee will
               be due immediately to Counsel upon the execution of the “Retainer
               Agreement” in the manner provided for in attached Appendix A to this
               Agreement.

               —       Counsel presently uses the hourly fee schedule below as a factor
                       in determining a reasonable fee:

                                      Arman Dabiri:           $800/hour

Dkt. 53-2 at 3–4 (Ex. A); see also Dkt. 53-1 at 1–2 (Pl.’s SUMF ¶¶ 2–3). Each page of the

Retainer Agreement bears the stamp of the General Manager of ABS. Dkt. 53-2 at 2–5 (Ex. A).

       Dabiri alleges that, after signing the agreement, it “immediately” began to work on

“establishing . . . a banking relationship between ABS and US financial institutions” and

“continu[ing] the easing of sanctions against Sudan.” Dkt. 1 at 7 (Compl. ¶ 20). In doing so,

Dabiri allegedly: (1) “undertook an extensive review of all sanctions as well as all litigation

against Sudan including cases by U.S. plaintiffs against Sudan under the terrorism exception to

the Foreign Sovereign Immunities Act;” (2) prepar[ed] for an anticipated trip by various

Sudanese officials to Washington, D.C.;” and (3) “establish[ed] a banking relationship with an

identified US Bank for purposes of several anticipated contracts with US companies specializing

in irrigation and agricultural equipment.” Id. at 7–8 (Compl. ¶¶ 21–22).

       Although ABS “cooperated” with Dabiri from May to July 2017 by “providing the

necessary documents for establishing [a] financial and a banking relationship with an identified

US Bank,” id. at 8 (Compl. ¶ 22), the relationship soon soured. ABS allegedly informed Dabiri

that its payment of the $200,000 retainer would be temporarily delayed “due to alleged problems

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with obtaining hard currency from the Central Bank of Sudan.” Id. (Compl. ¶ 23). Nevertheless,

ABS allegedly “requested” that Dabiri continue its work “based on promises and assurances that

payment pursuant to the retainer agreement would be forthcoming.” Id. No payments ever

came, however, even after Dabiri allegedly established “a full banking relationship . . . between

ABS and a US Banking institution” on July 7, 2017. Id. at 9 (Compl. ¶ 24). Instead, according

to Dabiri, “ABS (and its designated agent) . . . provid[ed] contradictory information regarding

the timing of payment,” id. (Compl. ¶ 25), and, eventually, “stopped responding to” Dabiri

despite “several reports and demand letters” that Dabiri sent between July and September 2017,

id. (Compl. ¶ 26).

       On September 14, 2017, Dabiri received a letter from another law firm stating: “ABS is

our client, and you have been terminated.” Dkt. 57-1 at 2 (Ex. 1). The following day, Dabiri

sent a final demand letter “for the outstanding fees pursuant to the retainer agreement to the

General Manager of the ABS as well as the newly appointed Minister of Agriculture and Forests

in Sudan.” Id. (Compl. ¶ 28). Allegedly receiving no response, Dabiri filed this lawsuit on

November 1, 2017, for breach of contract, seeking a total of $200,000 plus interest. Id. at 10

(Compl. ¶ 29).

       Dabiri’s Complaint named ABS, the Central Bank of Sudan, the Ministry of Agriculture

and Forests, and Salah Edin Hassan Ahmed, the General Manager of ABS as Defendants. Id. at

1 (Compl.). Each Defendant moved to dismiss the Complaint. Dkt. 12; Dkt. 14. On January 16,

2019, the Court granted in part and denied in part Defendants’ motions to dismiss. Dkt. 34. The

Court dismissed the claims against the Central Bank of Sudan and the Ministry of Agriculture

and Forests but declined to dismiss the claims against ABS and Ahmed. Id. at 14–15. The Court

further held that Dabiri had not properly served ABS and Ahmed but permitted Dabiri to make

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further efforts to effect proper service upon both parties within forty-five days of the Court’s

order. Id. Dabiri has since served ABS, Dkt. 47, but not Ahmed.

       ABS has now moved to dismiss the Complaint for failure to state a claim under Federal

Rule of Civil Procedure 12(b)(6), Dkt. 50 at 1, and Dabiri has cross-moved for pre-discovery

summary judgment under Federal Rule of Civil Procedure 56, Dkt. 53. The parties’ motions are

fully briefed and ripe for the Court’s consideration. For the following reasons, both motions will

be denied.

                                     II. LEGAL STANDARD

A.     Rule 12(b)(6)

       A motion to dismiss for failure to state a claim under Rule 12(b)(6) tests the legal

sufficiency of the allegations contained in the complaint. A complaint must contain “‘a short and

plain statement of the claim showing that the pleader is entitled to relief,’ in order to ‘give the

defendant fair notice of what the . . . claim is and the grounds upon which it rests.’” Bell Atl.

Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957));

see also Fed. R. Civ. P. 8(a). Although “detailed factual allegations” are not necessary to

withstand a Rule 12(b)(6) motion to dismiss, a plaintiff must furnish “more than labels and

conclusions” or “a formulaic recitation of the elements of a cause of action.” Id. Instead, the

complaint’s “[f]actual allegations must be enough to raise a right to relief above the speculative

level, on the assumption that all the allegations in the complaint are true (even if doubtful in

fact).” Id. (citations omitted). If the complaint’s allegations fail to meet this standard, the court

must dismiss the action. Id.

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B.     Rule 56

       A party is entitled to summary judgment under Federal Rule of Civil Procedure 56 if it

can “show[ ] that there is no genuine dispute as to any material fact and [that it] is entitled to

judgment as a matter of law.” Fed. R. Civ. P. 56(a). The party seeking summary judgment

“bears the initial responsibility” of “identifying those portions” of the record that “demonstrate

the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323

(1986). A fact is “material” if it could affect the outcome of the litigation under governing law.

See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). And a dispute is “genuine” if the

evidence is such that a reasonable jury could return a verdict for the nonmoving party. See Scott

v. Harris, 550 U.S. 372, 380 (2007). The Court must view the evidence in the light most

favorable to the nonmoving party and must draw all reasonable inferences in that party’s favor.

See Talavera v. Shah, 638 F.3d 303, 308 (D.C. Cir. 2011).

       If the moving party carries this initial burden, the burden then shifts to the nonmoving

party to show that sufficient evidence exists for a reasonable jury to find in the nonmoving

party’s favor with respect to the “element[s] essential to that party’s case, and on which that

party will bear the burden of proof at trial.” Id. (quoting Holcomb v. Powell, 433 F.3d 889, 895

(D.C. Cir. 2006)). The nonmoving party’s opposition, accordingly, must consist of more than

unsupported allegations or denials, and must be supported by affidavits, declarations, or other

competent evidence setting forth specific facts showing that there is a genuine issue for trial. See

Fed. R. Civ. P. 56(c); Celotex, 477 U.S. at 324. That is, once the moving party carries its initial

burden on summary judgment, the nonmoving party must provide evidence that would permit a

reasonable jury to find in its favor. See Laningham v. U.S. Navy, 813 F.2d 1236, 1241 (D.C. Cir.

                                                  6
1987). If the nonmoving party’s evidence is “merely colorable” or “not significantly probative,”

the Court should grant summary judgment. Liberty Lobby, 477 U.S. at 249–50.

                                         III. ANALYSIS

A.     Choice of Law

       When a Foreign Sovereign Immunities Act plaintiff brings suit “[i]n the absence of a

federal cause of action,” as Dabiri has in this case, “the Court must first consider what law

applies.” Force v. Islamic Republic of Iran, 464 F. Supp. 3d 323, 372 (D.D.C. 2020); see also

Oveissi v. Islamic Republic of Iran, 573 F.3d 835, 841 (D.C. Cir. 2009). To do so, “the Court

must apply the choice of law rules of the forum state”—here, the District of Columbia. Force,

464 F. Supp. 3d at 372. Under the D.C. choice of law rules, “courts [are to] enforce express

contractual choice of law provisions as long as there is some reasonable relationship with the

state specified.” Orchin v. Great-W. Life & Annuity Ins. Co., 133 F. Supp. 3d 138, 146 (D.D.C.

2015) (internal quotation marks and citations omitted); see also Ekstrom v. Value Health, Inc., 68

F.3d 1391, 1394 (D.C. Cir. 1995); Norris v. Norris, 419 A.2d 982, 984 (D.C. 1980). 1

       The Retainer Agreement between Dabiri and ABS states that it “shall be governed and

interpreted in accordance by the laws of the District of Columbia.” Dkt. 53-2 at 4 (Ex. A).

Courts have held that a “reasonable relationship” exists for purposes of choice-of-law analysis if

one of the parties to the litigation “is based in the District of Columbia.” Whiting v. AARP, 637

1
  Courts may decline to enforce contractual choice of law provisions that contravene a
“fundamental policy” of a state with “a materially greater interest than the chosen state.”
Restatement (Second) of Conflicts of Law § 187(2). Maryland common law—“to which [D.C.]
commonly looks for guidance in the absence of its own precedents,” Athridge v. Aetna Cas. &
Sur. Co., 351 F.3d 1166, 1171 (D.C. Cir. 2003)—recognizes this exception, see, e.g., Nat’l
Glass, Inc. v. J.C. Penney Props., Inc., 650 A.2d 246, 249 (Md. 1994). Here, neither party
addresses what choice of law applies, let alone asks the Court to invoke the fundamental-policy
exception to the Retainer Agreement’s choice-of-law provision.

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F.3d 355, 361 (D.C. Cir. 2011); see also Aneke v. Am. Exp. Travel Related Servs., Inc., 841 F.

Supp. 2d 368 (D.D.C. 2012) (applying Utah law where the defendant was based in Utah);

Leitner-Wise v. Koniag, Inc., 798 F. App’x 672, 673 n.1 (D.C. Cir. 2020) (reasonable-

relationship test satisfied where party to an agreement “was a Virginia corporation” and choice-

of-law provision selected Virginia law); Ladd v. Chemonics Intern., Inc., 603 F. Supp. 2d 99,

115 n.11 (D.D.C. 2009) (applying D.C. law where defendant’s principal place of business was in

D.C. and the employment agreement specified that D.C. law would apply). Here, Dabiri

“exist[s] under the laws of, and do[es] business in, the District of Columbia.” Dkt. 1 at 2

(Compl. ¶ 2). That is sufficient to satisfy the reasonable-relationship test. Accordingly, the

Court will address the parties’ dispute under D.C. law.

B.     Retainer Fees

       In order to state a claim for breach of contract under District of Columbia law, a plaintiff

must allege: “(1) a valid contract between the parties; (2) an obligation or duty arising out of the

contract; (3) a breach of that duty; and (4) damages caused by breach.” Tsintolas Realty Co. v.

Mendez, 984 A.2d 181, 187 (D.C. 2009). The question here is whether ABS’s failure to tender

the full $200,000 retainer payment to Dabiri constitutes a breach of the Retainer Agreement. For

the reasons that follow, the Court concludes that Dabiri has failed to carry its burden of showing

that ABS breached the Retainer Agreement as a matter of undisputed fact.

       “The District of Columbia, like other jurisdictions, wants clients to ‘compensate attorneys

reasonably,’ as a matter of ‘fundamental fairness.’” King & King, Chartered v. Harbert Int’l,

Inc., 503 F.3d 153, 156 (D.C. Cir. 2007) (quoting Connelly v. Swick & Shapiro, P.C., 749 A.2d

1264, 1267–68 (D.C. 2000)). “It cannot be reasonable,” the D.C. Court of Appeals has

explained, for an attorney “to demand payment for work that [it] has not in fact done.” In re

                                                  8
Ekekwe-Kauffman, 210 A.3d 775, 792 (D.C. 2019) (citing In re Cleaver-Bascombe, 892 A.2d

396, 403 (D.C. 2006)). Consequently, “when an attorney receives payment of a flat fee at the

outset of a representation, the payment is an ‘advance[ ] of unearned fees’ and ‘shall be treated as

property of the client . . . until earned.’” In re Mance, 980 A.2d 1196, 1202 (D.C. 2009), as

amended (Oct. 29, 2009) (quoting D.C. R. Prof. Conduct. 1.15(d)). “Such a fee is earned only to

the degree that the attorney actually performs the agreed-upon services.” Id. (internal quotation

marks and citation omitted).

        It is true that “[e]ngagement retainers,” in contrast to flat fees, “are earned when

received.” Id. Dabiri thus argues that the fee here—“a retainer of $200,000.00,” Dkt. 53-2 at 4

(Ex. A) (emphasis added)—was owed at the time of the contract’s signing. But, as explained by

the D.C. Bar Legal Ethics Committee, 2 there are two types of retainer agreements: “a special

retainer, which is a species of fee advance, or a general retainer, [which] . . . does not involve an

advance fee but a fee that is fully earned when paid.” D.C. Bar Ass’n Comm. on Legal Ethics,

Op. 264 (1996) (“Opinion 264”) (internal quotation marks and alterations omitted). The

difference between the two is critical: “[A] general retainer is . . . [a] fee [that] secures the

lawyer’s availability to perform legal services during a specified period, a commitment that

normally requires the lawyer to forego other representations and commit exclusively to the cause

of the retaining client.” Id. It is “paid solely for availability and a promise of exclusivity[] and is

not related to time expended on a particular matter.” Id.; see also T-Mobile US, 2015 WL

2
  “Although not binding, Opinions of the D.C. Bar Legal Ethics Committee provide valuable
guidance and have been cited favorably by our Court of Appeals and the District of Columbia
Court of Appeals.” Telecomms. Law Pros. PLLC v. T-Mobile US, Inc., No. 13-cv-1178, 2015
WL 13159051, at *5 n.3 (D.D.C. Jan. 12, 2015) (citing In re Kagan, 351 F.3d 1157, 1164, n.7
(D.C. Cir. 2003); Griva v. Davidson, 637 A.2d 830, 840 n.10 (D.C. 1994)); see also In re Mance,
980 A.2d 12 at 1202 (favorably citing Opinion 264).
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13159051, at *4 (“The only fee a lawyer may earn upon receipt is an engagement retainer (also

called a general retainer), which is a ‘fee paid, apart from any other compensation, to ensure that

a lawyer will be available for the client if required.’” (quoting In re Mance, 980 A.2d at 1202)).

“By contrast, a special retainer is an advance fee payment that is consumed by the performance

of legal services.” Opinion 264. “Such a retainer is not earned upon receipt but rather is tied to

the performance of services.” Id. (quotation marks omitted). “Special retainers may take many

forms, including an advance to be applied against hourly rates or a flat fee designed to cover

provision of specified legal services.” Id. at n.4.

       The Retainer Agreement in this case lacks “the classic element[s] of a nonrefundable

general retainer.” Id. First, “[i]t is difficult to understand how [ABS], under [the Agreement],

could preclude a rival or competitor from also retaining [Dabiri] for . . . representation during the

relevant period, in the absence of a conflict of interest.” Id. The Agreement nowhere requires

Dabiri “commit its time and resources exclusively to a particular client[] or forego any

opportunities for further representation during the period in question.” Id. Second, while the

Agreement uses the word “retainer,” Dkt. 53-2 at 4 (Ex. A), “merely stating in a contract that the

retainer fee is a general retainer or nonrefundable does not necessarily make it so,” Opinion 264.

Rather, “[i]n order to be considered a true general retainer . . . there must be a clear indication

that the retainer fee in fact is being paid to secure the exclusive availability of the lawyer or firm

and is not intended to pay for specific services to be rendered.” Id. That “clear indication” is

missing here. Id. Finally, Dabiri itself characterizes the $200,000 fee as “a flat fee lump sum

structure for legal services for $200,000,” further indicating that the Retainer Agreement

contemplated a special, not general retainer. Dkt. 1 at 7 (Compl. ¶ 19); see also Dkt. 51 at 8

(Dabiri’s motion papers explaining that “the terms of the Agreement []govern[ed] the

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relationship for representation and a lump sum fee structure between Plaintiff and ABS”); Dkt.

53-1 at 1–2 (Pl.’s SUMF ¶ 2) (“ABS, in consideration for services rendered and to be rendered

by Plaintiff[,] agreed to pay a lump sum fee.” (internal quotation marks omitted)).

       So viewed, the $200,000 fee is best understood as a special retainer to which Dabiri is not

entitled without regard to the work actually performed. Rather, special retainers, essentially flat

fees, must be earned. See Opinion 264 (“[A] client is not liable for the full amount of a special

retainer designed to encompass services that have not yet been rendered.”). Dabiri’s motion for

summary judgment—filed before discovery in this matter—does not, however, adduce any

evidence that Dabiri earned the full $200,000 retainer payment. Dabiri’s statement of undisputed

material facts, for instance, fails to say anything at all about what work Dabiri performed. Dkt.

53-1. And the only exhibit Dabiri filed in support of its motion is a copy of the Retainer

Agreement itself. Dkt. 53-2. Without any evidence that Dabiri earned the retainer payment, the

Court must, accordingly, deny Dabiri’s motion for summary judgment, Dkt. 53.

       Nor can the Court grant ABS’s motion to dismiss. Dabiri alleges that it performed

services but was not paid fees, Dkt. 1 at 7–9 (Compl. ¶ 20–22, 24), and the parties have not

addressed whether that constitutes a breach of the Retainer Agreement, irrespective of whether

the $200,000 retainer was immediately owed as a general retainer. D.C. law, moreover,

recognizes that “[a] lawyer’s normal remedy for unpaid fees lies in quantum meruit.” T-Mobile

US, 2015 WL 13159051, at *5 (first alteration added, internal quotation marks and subsequent

alteration omitted); see also Robinson v. Nussbaum, 11 F. Supp. 2d 1, 5 (D.D.C. 1997)

(“[D]ischarged attorney’s recovery is limited to quantum meruit, or the reasonable value of the

services already performed.”). Yet the parties have also failed to address whether Dabiri’s

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Complaint states a viable quantum meruit claim. 3 Without addressing these issues, dismissal of

Dabiri’s Complaint would be premature. Accordingly, ABS’s motion to dismiss will be denied.

                                        CONCLUSION

       For the foregoing reasons, it is hereby ORDERED that Dabiri’s motion for summary

judgment, Dkt. 53, and ABS’s motion to dismiss, Dkt. 50, are DENIED; it is further

       ORDERED that Plaintiff shall show cause, on or before March 29, 2021, why its claim

against Salah Edin Hassan Ahmed should not be dismissed for failure to effect service as

previously ordered by the Court and as required by the FSIA; and it is further

       ORDERED that the parties shall appear by telephone for a status conference to address

further proceedings in this matter on April 8, 2021 at 12:15 p.m.

       SO ORDERED.

                                                     /s/ Randolph D. Moss
                                                     RANDOLPH D. MOSS
                                                     United States District Judge
Date: March 9, 2021

3
  To be sure, Dabiri’s Complaint raises a breach-of-contract claim without mentioning quantum
meruit. Dkt. 1 at 10 (Compl. ¶ 29). It is unclear, however, whether that dooms the claim. On
the one hand, “a request for quantum meruit . . . is a measure of damages and not a legal theory
of recovery.” Fred Ezra Co. v. Pedas, 682 A.2d 173, 176 (D.C. 1996) (internal quotation marks
omitted). On the other hand, the D.C. Court of Appeals has described “[q]uantum meruit [a]s an
equitable remedy which permits recovery by a party for services or materials provided—despite
the absence of an express contract.” Prince Const. Co. v. D.C. Contract Appeals Bd., 892 A.2d
380, 382 n.1 (D.C. 2006) (emphasis added). The parties shall address this issue in any future
dispositive motions filed.

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