Davenport v. Djourabchi

316 F. Supp. 3d 58
CourtCourt of Appeals for the D.C. Circuit
DecidedJune 11, 2018
DocketCivil Action No. 16–2445 (ABJ)
StatusPublished
Cited by7 cases

This text of 316 F. Supp. 3d 58 (Davenport v. Djourabchi) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Davenport v. Djourabchi, 316 F. Supp. 3d 58 (D.C. Cir. 2018).

Opinion

AMY BERMAN JACKSON, United States District Judge

Pending before the Court is a motion filed by plaintiffs Stuart Mills Davenport and Big Bear Café, LLC seeking reconsideration of the Court's November 1, 2017 order granting defendants' motion to dismiss. Pls.' Mot. for Recons. Pursuant to Fed. Rule of Civ. P. 59(e) & 60(b) [Dkt. # 16] ("Pls.' Mot.").1 The Court previously ruled that plaintiffs' claims against defendants Babak Djourabchi and Monica Welt were precluded under the doctrine of res judicata, Davenport v. Djourabchi , 296 F.Supp.3d 245, 248 (D.D.C. 2017), but it concludes here that reconsideration is warranted.

The doctrine of res judicata bars parties "from relitigating issues that were or could have been raised" in a previous action. Allen v. McCurry , 449 U.S. 90, 94, 101 S.Ct. 411, 66 L.Ed.2d 308 (1980), citing Cromwell v. Cty. of Sacramento , 94 U.S. 351, 352, 24 L.Ed. 195 (1876). Under this principle, "a subsequent lawsuit will be barred if there has been prior litigation (1) involving the same claims or cause of action, (2) between the same parties or their privies, and (3) there has been a final, valid judgment on the merits, (4) by a court of competent jurisdiction." Smalls v. United States , 471 F.3d 186, 192 (D.C. Cir. 2006) (citations omitted). The Court found that all four elements of res judicata had been met in connection with prior bankruptcy proceedings, and that plaintiffs were therefore barred from bringing their civil suit. See Davenport , 296 F.Supp.3d at 251-54.

Plaintiffs ask the Court to "reconsider whether the 'same claim' element of res *61judicata is met in this action." Pls.' Mot. at 4 & n.3. Pointing to authority they did not raise in connection with the motion to dismiss, plaintiffs contend that the Court "did not consider an intervening ruling of the United States Court of Appeals for the District of Columbia Circuit ... demonstrating that Davenport's bankruptcy action was not the same claim as those brought by [p]laintiffs in this action." Id. at 3 (emphasis omitted). Further, they argue that the Court's decision "reflects clear error in concluding that [p]laintiffs 'could have brought their ... claims in the prior bankruptcy proceeding,' when Bankr. Rules 3007(b) and 7001(1) specifically prohibited [p]laintiffs from bringing those state law claims." Id. at 5 (internal citation omitted) (emphasis in original).

Because plaintiffs were prohibited from bringing their state and common law claims for damages in the prior bankruptcy proceeding, their current claims do not constitute the same cause of action for res judicata purposes. Therefore, the Court will grant plaintiffs' motion.

BACKGROUND

The factual and procedural background of this case, the nature of plaintiffs' claims against defendants, and the basis for the Court's previous ruling are laid out in detail in the Court's decision, see Davenport , 296 F.Supp.3d 245, so the Court will address the facts only briefly here.

Plaintiff Davenport is the operator and sole owner of Big Bear Café, LLC, a restaurant on the lower level of the multistory row-house where he and his family live. Am. Compl. [Dkt. # 9] ¶¶ 7-10. Defendants were Davenport's neighbors, id. ¶ 13, and they loaned him $80,000 in exchange for an executed Promissory Note for Business and Commercial Purposes. Id. ¶ 14; Ex. 1 to Am. Compl. [Dkt. # 9-1] ("Note"). The loan was secured by Big Bear Café. Id. ¶¶ 16, 21; see Note; Ex. 2 to Am. Compl. [Dkt. # 9-2] ("Deed of Trust"). This case arises out of defendants' efforts to collect on the debt and the bankruptcy proceedings that followed.

On October 14, 2015, Davenport filed for Chapter 13 bankruptcy protection in the U.S. Bankruptcy Court for the District of Columbia to prevent a threatened foreclosure on his property by defendants. Am. Compl. ¶¶ 105-06. Defendants filed a proof of claim with the bankruptcy court, alleging that Davenport was in default on the Note and that he owed them $121,813.88. Id. ¶ 120. Davenport contested this allegation by filing an objection to the proof of claim. Id. ¶¶ 120-21. The bankruptcy court then held a trial to determine the amount due under the Note, and on July 21, 2016, it ruled that Davenport was not in default, but that he owed $53,557.10. Id. ¶¶ 122-23; Ex. 9 to Am. Compl. [Dkt. # 9-9] ("Bankr. Mem."); Ex. 10 to Am. Compl. [Dkt. # 9-10] ("Bankr. Order").

After the bankruptcy court established that Davenport was not in default on the Note, Davenport and the café filed this civil lawsuit against defendants. See Am. Compl.2 They brought seven claims alleging that throughout the parties' interactions, defendants have harassed Davenport, and that plaintiffs have suffered as a result of defendants' misrepresentations regarding the Note. See id. ¶¶ 143-47, 156-57, 162, 176-77, 187-88, 193. Plaintiffs sought at least $150,000.00 in damages, in addition to punitive damages, and attorneys' fees. Id. at 30.

*62STANDARD OF REVIEW

"Motions under Fed. R. Civ. P. 59(e) are disfavored and relief from judgment is granted only when the moving party establishes extraordinary circumstances." Niedermeier v. Office of Max S. Baucus , 153 F.Supp.2d 23, 28 (D.D.C. 2001), citing Anyanwutaku v. Moore , 151 F.3d 1053, 1057 (D.C. Cir. 1998). "A Rule 59(e) motion is discretionary and need not be granted unless the district court finds that there is an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice." Ciralsky v.

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316 F. Supp. 3d 58, Counsel Stack Legal Research, https://law.counselstack.com/opinion/davenport-v-djourabchi-cadc-2018.