Zoroastrian Center & Darb-E-Mehr v. Rustam Guiv Foundation

822 F.3d 739, 2016 U.S. App. LEXIS 8163, 2016 WL 2343251
CourtCourt of Appeals for the Fourth Circuit
DecidedMay 4, 2016
Docket14-1841
StatusPublished
Cited by71 cases

This text of 822 F.3d 739 (Zoroastrian Center & Darb-E-Mehr v. Rustam Guiv Foundation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Zoroastrian Center & Darb-E-Mehr v. Rustam Guiv Foundation, 822 F.3d 739, 2016 U.S. App. LEXIS 8163, 2016 WL 2343251 (4th Cir. 2016).

Opinion

Affirmed in part, vacated in part, and remanded by published opinion. Judge AGEE wrote the opinion, in which Judge WILKINSON and Judge KEENAN joined.

AGEE, Circuit Judge:

The Zoroastrian Center and Darb-E-Mehr of Metropolitan Washington, D.C. (“The Center”) is a nonprofit entity dedicated to the advancement and practice of Zoroastrianism, an ancient Persian religion. Rustam Guiv Foundation (“Rustam Guiv”) is a charitable trust with a similar mission. 1 As part of a joint effort to construct a Zoroastrian worship center, the parties signed a ninety-nine-year lease on a parcel of property owned by Rustam Guiv in the Vienna area of Fairfax County, Virginia. What followed was a tumultuous relationship that culminated in Rustam Guiv terminating the lease. The Center responded with this litigation seeking, among other things, a declaratory judgment to reinstate the lease. Rustam Guiv removed the case to federal court, where the district court ultimately granted sum *744 mary judgment to Rustam Guiv and awarded attorneys’ fees. On appeal, The Center raises several claims of error, including the threshold question of whether federal subject matter jurisdiction existed.

We agree with the district court thát The Center’s case cannot go forward. Rustam Guiv presented sufficient evidence to show complete diversity between the parties, thereby establishing subject matter jurisdiction in federal court. Likewise, the undisputed material facts show that The Center breached the lease, so we affirm the district court’s decision to dismiss the complaint in its entirety and enter judgment for Rustam Guiv.

The district court’s attorneys’ fee award, however, presents another matter. Under Virginia law governing contractual fee-shifting provisions, the prevailing party is entitled to recover attorneys’ fees for work performed only on its successful claims. See Ulloa v. QSP, Inc., 271 Va. 72, 82, 624 S.E.2d 43 (2006). The district court correctly identified Rustam Guiv as the prevailing party but made no effort to narrow the fee award to its successful claims. Thus, we vacate the district court’s fee award and remand for further proceedings as to that issue.

I.

A.

Rustam Guiv owns a seven-acre parcel of property in Vienna, Virginia. In 1991, Rustam Guiv leased this land to The Center for ninety-nine years at a nominal rent of one dollar a year. In return, The Center was to construct “a place of worship for all Zoroastrians of the world”; “a facility for the advancement of the Zoroastrian religion”; and “a dwelling suitable for residence of a Mobed (priest).” J.A. 41. 2 The Center would bear all costs of improving the property to meet these requirements. 3 The lease did not include a firm deadline for this construction, but did provide that “time is of the essence.” J.A. 50.

The Center contends it invested “thousands of dollars” in planning and designing a worship facility, which included obtaining permits and density exemptions from the Fairfax County government. Despite these alleged efforts, however, The Center did not begin actual construction for many years. And, by 2008, The Center still had not completed a single structure.

Frustrated with the state of progress, Rustam Guiv threatened to rescind the lease. .The parties then executed a lease amendment dated January 1, 2009, designed to “re-energize [The Center’s] efforts.” J.A. 261. Together, the original lease and amendment governed the parties’ lessor-lessee relationship.

Several clauses from the lease amendment are pertinent here. First, The Center agreed to “undertake such construction [of a religious center] no later than November 1, 2009” and complete the project by March 13, 2011. J.A. 55. Although Rustam Guiv was allowed to extend this completion deadline, in no event could construction go past March 15, 2013. The amendment further permitted Rustam Guiv to terminate the lease if “substantial” activity had not been undertaken by either date. J.A. 55-56. As these provisions make clear, the lease amendment was designed to speed the pace of construction by instituting hard deadlines.

For financial reasons not entirely clear from the record, The Center missed the start deadline for construction. This set in motion a series of meetings that culminat *745 ed with Rustam Guiv notifying The Center that it was pursuing a partnership with another charitable foundation for a Zoroastrian temple in Maryland. Dr. Dar-yoush Jahanian, who can best be described as RGF’s lead trustee, followed up with an email explaining that this alternate site would be sufficient to service the regional Washington Zoroastrian community, and consequently, The Center should “stop signing any contracts] and ... not write any cheek[s] as much as possible.” J.A. 869. The Center “temporarily stopped the progress” on this recommendation from Dr. Jahanian, but soon decided “to stay on course” and continue its efforts at construction. J.A. 473.

In sum, by the end of April 2010, the original lease had been amended to include particular construction deadlines, the first of which had been missed. Rustam Guiv had chosen to focus its efforts on an alternative site and requested The Center to stop construction. The Center briefly ceased its operations, but within a few weeks, elected to continue with its plans.

B.

The parties remained at a virtual standstill for over a year without significant dialogue. The Center alleges that it could not “obtain bonds that were required by Fairfax County” or “pull any permits” without Rustam Guiv’s consent, and thus its construction activities stalled. Opening Br. 11. Rustam Guiv, in turn, was pursuing the Maryland site.

In March 2011, Rustam Guiv contacted The Center for an in-person meeting about taking possession of the Vienna property. During the subsequent conference, however, the parties agreed to continue construction on the Vienna building as reflected in a one-page, hand-written Memorandum of Understanding (“MOU”) that included the following provisions:

1 — [Rustam Guiv] will be in full cooperation with [The Center] in facilitating the required paperwork.
2 — [The Center] will provide to [Rustam Guiv] an accounting book to list the names [and] amounts of all donations and all expenses. [The Center] will also continue to provide quarterly financial report[s] [and] account summar[ies] of all donations and expenses.
3 — [The Center] will provide an accomplishment plan with milestones [and] deadlines, mutually agreed by the two parties.
6 — Items 2, 3 and 5 above will be provided on or before 5/15/2011 and must be approved by [Rustam Guiv].

J.A. 495-96.

As required by the MOU, The Center delivered an initial report on May 15, 2011. That report, however, failed to include a full accounting, list of donor activity, or accomplishment milestones. For reasons unknown, Rustam Guiv did not object to these deficiencies, and the parties again went silent.

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822 F.3d 739, 2016 U.S. App. LEXIS 8163, 2016 WL 2343251, Counsel Stack Legal Research, https://law.counselstack.com/opinion/zoroastrian-center-darb-e-mehr-v-rustam-guiv-foundation-ca4-2016.