Moldea v. Ovitz ( 2019 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
DAN E. MOLDEA,
Plaintiff,
v. Case No. 18-cv-00560 (CRC)
MICHAEL OVITZ,
Defendant.
MEMORANDUM OPINION
This case is the contractual companion to a classic film noir tale of revenge, shifting
alliances, and relationships gone bad. The Court picks up the plot at the beginning: 1 in 2002,
Los Angeles-based private investigator Anthony Pellicano orchestrated an intimidation campaign
against journalist Anita Busch on behalf of clients who took offense at the stories Busch was
writing about them. Pellicano was arrested and convicted. Compl. ¶¶ 8, 10. The plaintiff in this
case, investigative journalist Dan Moldea, partnered with Busch in 2003 to publish a book about
her ordeal, id. ¶ 9, which included a hit-and-run attempt and a dead fish left on her car
windshield, id. ¶ 8.
Busch also filed a civil suit in California court in 2004, naming Pellicano’s then-unknown
clients as defendants. Id. ¶ 11. Moldea continued to work on the book project until Busch
allegedly put an end to it because the book’s contents threatened to undermine her lawsuit. Id.
¶ 12. Moldea says that when he complained about all the work he’d done for free, Busch turned
the tables and mounted a smear campaign against him. Id. Unlike the book project, Busch’s
1
As required on a motion to dismiss, the Court draws this factual background from the
complaint, assuming the truth of all well-pled allegations. See Sissel v. U.S. Dep’t of Health &
Human Servs., 760 F.3d 1, 4 (D.C. Cir. 2014).
civil suit pressed on, and she amended her complaint in 2008 to name Hollywood talent agent
Michael Ovitz (the defendant in this case) as one of Pellicano’s clients. Id. ¶ 13. Ovitz, in turn,
suspected Moldea might have helpful information for his defense and subpoenaed him for a
deposition in August 2011. Id. ¶ 14.
Perhaps realizing that the enemy of his enemy could be a friend, Ovitz withdrew the
subpoena and sent Moldea a transcript of Busch’s deposition in the California case, which
Moldea claims contained false and defamatory statements about him. Id. ¶ 15. In September
2011, Ovitz dispatched his attorney, Eric George, to meet with Moldea and his attorney in the
District of Columbia, where Moldea lives, to negotiate a Common Interest Agreement, the
contract at issue in this case. Id. at ¶ 16. The parties executed the Agreement on November 9,
2011, but George returned to D.C. in October 2015 and again in January 2017 to discuss its
terms. Id.; see also Agreement, ECF No. 1-1, at 8.
According to Moldea, the “parties’ respective interests were straightforward, and each are
addressed in the Common Interest Agreement,” Compl. ¶ 19, which he attaches to the complaint
as Exhibit A. Under the terms of the Agreement, which is governed by California law, “Moldea,
in lieu of sitting for a deposition . . . will provide a declaration . . . that truthfully and accurately
describes certain aspects of his collaboration with Anita Busch.” Agreement ¶¶ 1, 24. The
information in the declaration would help Ovitz defend against Busch’s lawsuit. In return, Ovitz
agreed to “reimburse Moldea for any travel-related or other expenses incurred in connection with
the preparation of the Declaration.” Id. ¶ 2.
But according to Moldea, his aims went beyond compensation: He also “sought to end
the malicious campaign waged by Busch against him, along with indemnification against further
harm as a result of his cooperation with Ovitz.” Compl. ¶ 21. To that end, the Agreement
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provides that “Ovitz intends to submit [Moldea’s] Declaration to counsel for Busch, together
with a demand that Busch (a) dismiss the Litigation against Ovitz and (b) issue a writing to
Moldea retracting, and apologizing for, Busch’s deposition statements” about Moldea.
Agreement ¶ 3. The Agreement continues: “Should Busch decline to issue the foregoing
apology, Ovitz’s counsel agrees to send a letter to Moldea that recites each of the deposition
statements set forth above, and offers Ovitz’s counsel’s opinion that such statements are
inaccurate.” Id. ¶ 4. This letter was to “be submitted by Ovitz to Moldea within a reasonable
time after Busch’s refusal to issue the foregoing apology.” Id. Finally, the Agreement includes a
damages provision: “The parties agree that Moldea will suffer harm and prejudice in his
personal life and professional career, equal to at least $250,000, if Ovitz’s counsel fails to
provide the Letter pursuant to paragraph 4.” Id. ¶ 6.
Moldea claims to have “spent hundreds of hours on Ovitz-requested/related tasks,”
including drafting a lengthy declaration, compiling related documents, and traveling to
California to testify at a hearing. Compl. ¶ 22. Ovitz’s counsel attached the declaration to a
summary judgment motion filed in Busch’s California case on October 31, 2012. Id. ¶ 23. And
eventually, Ovitz and Busch entered into settlement negotiations in January 2018. Id. ¶ 24.
Sensing the end, Moldea requested that Ovitz either demand a retraction and apology from
Busch or have his counsel issue the opinion letter. Id. Ovitz, through counsel, refused. Id.
Moldea responded by filing this lawsuit in March 2018. He claims that Ovitz breached
the Common Interest Agreement in two ways: “by failing to demand an apology/retraction from
Busch for false statements made about Moldea, as required in paragraph 3 of the Agreement”
and “by failing to send a letter to Moldea that recites each of Busch’s false statements, as
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described in paragraph 3 of the Agreement, and offering Ovitz’s counsel’s [opinion] that such
statements are inaccurate” as required in paragraph 4. Id. ¶¶ 28–29.
Ovitz has moved to dismiss the lawsuit on three grounds. First, he contends that the
Court lacks personal jurisdiction because he resides in California and did not personally travel to
Washington, D.C. for any of the negotiations. Second, he insists that Moldea’s claim is time-
barred because the applicable four-year statute of limitations began to run when Ovitz
“submitted” the declaration in 2012 by attaching it to the motion for summary judgment and
Moldea did not file suit until six years later. Finally, Ovitz asserts that Moldea has failed to state
a claim because the Agreement does not explicitly require Ovitz to either demand a retraction
and apology, or issue an opinion letter. 2
For the reasons explained below, the Court rejects all three arguments and will deny
Ovitz’s motion to dismiss.
I. Legal Standards
Under Federal Rule of Civil Procedure 12(b)(2), a defendant may move to dismiss a suit
for lack of personal jurisdiction. The plaintiff bears the burden of establishing personal
jurisdiction. FC Inv. Grp. LC v. IFK Mkts., Ltd., 529 F.3d 1087, 1091 (D.C. Cir. 2008). Any
“factual discrepancies appearing in the record must be resolved in favor of the plaintiff.” Crane
v. N.Y. Zoological Soc’y, 894 F.2d 454, 456 (D.C. Cir. 1990).
A defendant may move to dismiss a suit for failure to state a claim under Federal Rule of
Civil Procedure 12(b)(6). In analyzing such a motion, the Court must determine whether the
complaint “contain[s] sufficient factual matter, accepted as true, to ‘state a claim to relief that is
2
Ovitz has withdrawn the argument that the Court should dismiss the complaint for
insufficient service of process. Reply at 1 n.2.
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plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). This requires “factual content that allows the court to
draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. The
Court “must take all of the factual allegations in the complaint as true.” Id. It also must
“constru[e] the complaint liberally in the plaintiff’s favor with the benefit of all reasonable
inferences derived from the facts alleged.” Stewart v. Nat’l Educ. Ass’n, 471 F.3d 169, 173
(D.C. Cir. 2006). Finally, the Court may only “consider the facts alleged in the complaint,
documents attached thereto or incorporated therein, and matters of which it may take judicial
notice.” Id. This means the Court may consider the Common Interest Agreement, which is
attached to the complaint.
Rule 12(b)(6) is also “the vehicle for asserting the affirmative defense of statutory time
limitation.” Peart v. Latham & Watkins LLP, 985 F. Supp. 2d 72, 80 (D.D.C. 2013). “[B]ecause
statute of limitations issues often depend on contested questions of fact, dismissal is appropriate
only if the complaint on its face is conclusively time-barred.” Bregman v. Perles, 747 F.3d 873,
875–76 (D.C. Cir. 2014) (citation omitted).
II. Analysis
A. Personal jurisdiction
There are two types of personal jurisdiction: general and specific. General jurisdiction
applies regardless of the nature of the claim but is available only where the defendant is so “at
home” in the forum state that he can be sued there for any reason. Daimler AG v. Bauman, 571
U.S. 117, 137 (2014). Moldea does not argue that Ovitz, a California resident, is at home in the
District of Columbia. This motion therefore concerns the second type of personal jurisdiction.
“In contrast to general, all-purpose jurisdiction, specific jurisdiction is confined to adjudication
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of issues deriving from, or connected with, the very [forum-related] controversy that establishes
jurisdiction.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)
(internal quotation marks, citation omitted). 3 To establish specific personal jurisdiction, then,
Moldea must make a prima facie showing that jurisdiction is proper under both the District of
Columbia’s long-arm statute and the Constitution’s Due Process Clause. FC Inv. Grp. LC, 529
F.3d at 1094–95.
As relevant here, the District of Columbia’s long-arm statute allows for specific personal
jurisdiction over a non-resident defendant “who acts directly or by an agent, as to claims arising
from the person’s . . . transacting any business in the District of Columbia.” D.C. Code Ann.
§ 13-423(a)(1). This means that to establish personal jurisdiction under the transacting-business
clause, a plaintiff must make a prima facie showing that “[1] the defendant transacted business in
the District, [2] the claim arose from that business, and [3] the business constituted minimum
contacts with the District such that the Court’s exercise of personal jurisdiction would not offend
‘traditional notions of fair play and substantial justice.’” Thompson Hine LLP v. Smoking
Everywhere Inc., 840 F. Supp. 2d 138, 142 (D.D.C. 2012), aff’d 734 F.3d 1187 (D.C. Cir. 2013)
(citation omitted); see also Int’l Shoe Co. v. Washington, 326 U.S. 310, 316, 319 (1945).
Because the transacting-business clause is “coextensive with the due process clause,” Helmer v.
Doletskaya, 393 F.3d 201, 205 (D.C. Cir. 2004) (quoting Mouzavires v. Baxter, 434 A.2d 988,
3
Ovitz argues that Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408(1984), forecloses personal jurisdiction here. See MTD at 8; Reply at 4–5. But Helicopteros
was a case about general jurisdiction and thus has no bearing on whether the Court has specific
jurisdiction over Ovitz regarding claims that arise out of his contacts with the District of
Columbia. See Helicopteros, 466 U.S. at 415–16 (expressly limiting discussion to propriety of
general personal jurisdiction because “[a]ll parties to the present case concede that respondents’
claims against Helicol did not ‘arise out of,’ and are not related to, Helicol’s activities within
Texas”).
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992 (D.C. 1981) (per curiam)), the statutory and constitutional prongs of the personal jurisdiction
inquiry often merge.
A defendant satisfies both the District’s long-arm statute and due process when he “enters
into a contract that has a ‘substantial connection’ with the forum.” Id. (quoting McGee v. Int’l
Life Ins. Co., 355 U.S. 220, 223 (1957)). Courts have focused on a number of considerations to
evaluate whether there is a “substantial connection” between the defendant’s business and the
District, including: (1) whether “the non-resident solicited the business relationship,” Overseas
Partners, Inc. v. PROGEN Musavirlik ve Yonetim Hizmetleri, Ltd. Sikerti, 15 F. Supp. 2d 47, 51
(D.D.C. 1998) (citing Schwartz v. CDI Japan, Ltd., 938 F. Supp. 1, 6 (D.D.C. 1996);
Mouzavires, 434 A.2d at 995); (2) whether negotiations took place in the District, id. (citing
Abramson v. Wallace, 706 F. Supp. 1, 2 (D.D.C. 1989)); and (3) whether the contract was at
least “partly performed in the District,” Abramson, 706 F. Supp. at 2; Schwartz, 938 F. Supp. at
6.
These considerations easily support the exercise of specific personal jurisdiction over
Ovitz. Here, Ovitz does not contest Moldea’s allegation that he “dispatched his counsel to meet
with Moldea and his attorneys in the District of Columbia to negotiate the parameters of a
Common Interest Agreement.” Compl. ¶ 16. Although Ovitz makes much of the fact that he did
not personally travel to D.C. to negotiate the terms of the Agreement, the long-arm statute
expressly contemplates jurisdiction over a non-resident defendant who sends an agent to do his
business for him. D.C. Code Ann. § 13-423(a)(1); see also Mouzavires, 434 A.2d at 993 (“[A]
nonresident defendant need not have been physically present in the District.”); Schwartz, 938 F.
Supp. at 6–7 (“[A] non-resident defendant may be subject to personal jurisdiction even if he has
never been physically present in the forum state[.]”). According to Moldea, he and Ovitz’s
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counsel met in the District to discuss the terms of the Agreement in September 2011, October
2015, and January 2017. Compl. ¶ 16.
Moreover, Ovitz’s contention that it was his “understanding that there [was] no need for
any part of the contract to be performed in the District of Columbia,” MTD Ex. 1, Ovitz Decl. at
22 ¶ 15, does not undercut personal jurisdiction. Moldea insists that he in fact performed a large
part of his end of the bargain here in D.C., where he lives, by spending hundreds of hours
preparing the contracted-for declaration and compiling related documents, Compl. ¶ 22. Again,
Ovitz does not dispute Moldea’s account. That is enough to support a finding that the contract
was at least partly performed in D.C. Finally, there can be no question that Moldea’s suit arises
from these contacts with the forum: Ovitz sent his attorney to the District of Columbia to
negotiate the Common Interest Agreement, which forms the basis of Moldea’s breach-of-
contract claims.
Because the Court concludes that it has specific personal jurisdiction over Ovitz based on
his business transactions here in the District, it will deny Ovitz’s motion to dismiss on this
ground.
B. Statute of limitations
Ovitz argues in the alternative that Moldea’s breach-of-contract claims are untimely
under California’s four-year statute of limitations. MTD at 9; Cal. Code Civ. Proc. § 337. As
explained above, “a court should grant a pre-discovery motion to dismiss on limitations grounds
‘only if the complaint on its face is conclusively time-barred,’ and the parties do not dispute
when the limitations period began.” Feld Entm’t Inc. v. Am. Soc’y for the Prevention of Cruelty
to Animals, 873 F. Supp. 2d 288, 308 (D.D.C. 2012) (quoting Turner v. Afro-American
Newspaper Co., 572 F. Supp. 2d 71, 72 (D.D.C. 2008)). Here, however, the parties do dispute
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when the limitations period began to run for both the alleged breach of Ovitz’s duty to demand a
retraction and apology from Busch, and the alleged breach of Ovitz’s duty to issue an opinion
letter when that apology was not forthcoming. And, as will follow, the complaint is not on its
face conclusively time-barred. The Court therefore concludes that Ovitz has not met his “heavy
burden” for dismissal here. Id.Assuming the Agreement imposes a duty on Ovitz to demand a retraction, 4 paragraph 3
of the Agreement requires Ovitz “to submit the Declaration to counsel for Busch, together with a
demand that Busch (a) dismiss the Litigation against Ovitz and (b) issue a writing to Moldea
retracting, and apologizing for, Busch’s deposition statements.” Agreement ¶ 3. Ovitz argues
that the clock for the retraction demand must start on October 31, 2012, when Ovitz’s counsel
filed the motion for summary judgment, because Moldea himself describes attaching the
declaration to that motion as “submit[ting] the Declaration.” Reply at 6 (quoting Compl. ¶ 23).
According to Ovitz, if he submitted the declaration on October 31, 2012, and the Agreement
requires Ovitz to submit the declaration “together with” the demand, he must have been in
breach that day or soon thereafter. Id. at 6–7; MTD at 9.
While Ovitz’s interpretation may make some sense, it is not the only plausible one.
Moldea counters that although he used the word “submitted” in the complaint, neither he nor
Ovitz “believed the attachment to the Motion for Summary Judgment to constitute the specific
submission to counsel required in the Common Interest Contract.” Opp’n at 12. According to
Moldea, because there is no evidence that Ovitz ever submitted the declaration as contemplated
by the Agreement, the statute of limitations only began to run once Ovitz made clear in January
4
This issue is discussed infra Subpart II(C).
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2018 that he would not be demanding a retraction and apology. See Compl. ¶ 24. Other parts of
the Agreement support Moldea’s contention that the parties did not understand the word
“submit” as used in the Agreement to mean “file” in the ongoing civil litigation. First, paragraph
3 requires Ovitz to submit the declaration with two demands, one for Busch to retract her
statements and apologize and the other for Busch to dismiss the lawsuit. A motion for summary
judgment might lead to the end of a case, but the motion itself is not typically considered a
demand to the other litigant to dismiss the lawsuit. Second, paragraph 7 separately covers what
should happen “[s]hould the Declaration be filed for any purpose in the Litigation,” suggesting
that the submission contemplated in paragraph 3 was not filing the declaration in the California
proceeding.
At summary judgment, Ovitz may well be able to show that Moldea’s claim accrued soon
after Ovitz filed a motion for summary judgment in the California proceeding and attached
Moldea’s declaration to that motion. But at this stage in the litigation, the Court looks only to
the complaint. Moldea has presented a competing, plausible scenario regarding when his cause
of action accrued. Given these competing interpretations, it is not clear from the face of the
complaint when the limitations period began to run. The Court will therefore deny Ovitz’s
motion to dismiss Moldea’s claim for breach of duty to demand the retraction as untimely.
Moving to the duty to issue an opinion letter, paragraph 4 of the Agreement requires
Ovitz’s counsel to send Moldea a letter refuting Busch’s statements “within a reasonable time
after Busch’s refusal to issue the foregoing apology” as referenced in paragraph 3. Agreement
¶ 4. According to Moldea, the statute of limitations on Ovitz’s alleged breach of paragraph 4
also began to run in January 2018, when Ovitz communicated that he would not be issuing the
letter. See Compl. ¶ 24. If this is right, then Moldea did not sleep on his rights; instead, he filed
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suit soon after it became clear to him that the opinion letter would not be forthcoming. Ovitz
disagrees, countering that either the requirements in paragraph 4 were never triggered (because
“Busch was not asked to apologize”) or arose “‘within a reasonable time’ after Busch’s failure to
apologize”—which could not possibly extend to March 2014, four years before Moldea filed this
lawsuit. MTD at 10. Again, both parties present conflicting scenarios regarding the statute of
limitations that are both plausible and consistent with the plain language of the Agreement.
Therefore, it is not clear from the face of the complaint when the statute of limitations began to
run on the alleged breach of the duty to provide an opinion letter—whether it was soon after
Busch failed to apologize in 2012 or when Ovitz communicated that he would not issue the letter
in 2018. The Court will therefore deny Ovitz’s motion to dismiss on this ground as well.
C. Failure to state a claim
Finally, Ovitz moves to dismiss for failure to state a claim upon which relief can be
granted on the ground that the Common Interest Agreement does not obligate Ovitz to demand a
retraction and apology, or issue an opinion letter. MTD at 10. He contends that the “plain
meaning” of “intends to” in paragraph 3 is that Ovitz was under no obligation to demand a
retraction or apology. Reply at 8. And, Ovitz says, he was never under any obligation to issue
the opinion letter because the condition precedent to that obligation—Busch refusing to
apologize in response to Ovitz’s discretionary demand—never occurred. Id. at 9.
Under California law, “[t]he fundamental goal of contractual interpretation is to give
effect to the mutual intention of the parties.” California v. Cont’l Ins. Co., 281 P.3d 1000, 1004
(Cal. 2012) (first quoting Bank of the West v. Superior Court, 833 P.2d 545, 552 (Cal. 1992);
then quoting Cal. Civ. Code § 1636). “Such intent is to be inferred, if possible, solely from the
written provisions of the contract.” Id. (first quoting AIU Ins. Co. v. Superior Court, 799 P.2d
111253, 1265 (Cal. 1990); then quoting Cal. Civ. Code § 1636). “If the contractual language is
clear and explicit, it governs.” Bank of the West, 833 P.2d at 552. However, “[l]anguage in a
contract must be construed in the context of that instrument as a whole, and in the circumstances
of that case.” Continental Ins. Co., 281 P.3d at 1004 (quoting Bank of the West, 833 P.2d at
552). In addition, “if the terms of a promise are in any respect ambiguous or uncertain, it must
be interpreted in the sense in which the promisor believed, at the time of making it, that the
promisee understood it.” Bank of the West, 833 P.2d at 552 (quoting Cal. Civil Code § 1649).
Because intent is a factual determination, the Court must deny a motion to dismiss where the
contractual language and context leaves doubt as to the parties’ intent. See The Scowcroft Grp.,
Inc. v. Toreador Res. Corp., 666 F. Supp. 2d 39, 43–44 (D.D.C. 2009) (denying motion to
dismiss breach of contract claim based on ambiguous contract provisions).
The Court concludes that the parties’ intent is not so clear at this stage of litigation as to
warrant dismissal without discovery on Moldea’s claims. Starting with the written terms of the
Agreement, paragraph 3 provides that “Ovitz intends to submit the Declaration to counsel for
Busch, together with a demand that Busch” dismiss the California lawsuit and retract her
statements about Moldea. Agreement ¶ 3 (emphasis added). Although the ordinary meaning of
“intend” could imply a mere plan or expectation to perform, 5 other parts of the Agreement make
little sense if Ovitz were not required to demand the retraction. Paragraph 4 imposes on Ovitz
the obligation to issue an opinion letter “[s]hould Busch decline to issue the foregoing apology”
that Ovitz “intends to” demand according to paragraph 3. Agreement ¶ 4. And paragraph 6
provides Moldea with at least $250,000 in damages in the event that Ovitz fails to fulfill the
5
See, e.g., Intend, Black’s Law Dictionary (10th ed. 2014) (“to have as one’s purpose”).
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obligation set forth in paragraph 4. Id. ¶ 6. This damages provision suggests to the Court that a
central purpose of the Agreement for Moldea was to receive—either from Busch herself or from
Ovitz’s counsel—a document refuting the negative statements Busch allegedly made about him.
Indeed, Moldea pleads that he entered into the Agreement “to end the malicious campaign waged
by Busch against him.” Compl. ¶ 21. Leaving the demand for a retraction and apology entirely
to Ovitz’s discretion would appear to undermine that purpose and the mandatory language in
paragraphs 4 and 6.
Ovitz relies on two cases in California that interpret the phrase “intends to” as conveying
an expectation about the future rather than an obligation. MTD at 11 (citing Jappa v. California,
No. 08-cv-1813 WHQ (POR), 2009 WL 1396364 (S.D. Cal. May 15, 2009); People v. Jackson,
15 Cal. App. 4th 1197 (1993)). But neither case involves questions of contract interpretation, let
alone a situation where one reasonable meaning of the phrase appears to undermine the purpose
of the contract as a whole. See Jappa, 2009 WL 1396364, at *5 (concluding that plaintiff’s
allegation that she “intends to quit” her job as meaning she had not yet quit her job as required
for failure-to-pay claim); Jackson, 15 Cal. App. 4th at 1201 (interpreting discovery rule requiring
defense to disclose witnesses he “intends to call” as those he “reasonably anticipates” calling).
Ovitz also argues that he could not have breached paragraph 4 because it contains a
condition precedent—that Busch decline to retract her statements and apologize—that did not
occur because she was never asked to apologize. MTD at 11. In Ovitz’s view, this means that
neither he nor his counsel were ever required to send the opinion letter. Id. The use of
“foregoing” to describe Busch’s apology could be interpreted to condition the opinion letter on
the outcome of paragraph 3, but that interpretation would again undermine Moldea’s apparent
understanding of the Agreement, which strikes the Court as a fair one when the contract is read
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as a whole: that he would be left with either an apology and retraction from Busch herself, or an
opinion letter from a reputable source refuting Busch’s statements. Because the fundamental
goal of contract interpretation is to give effect to the parties’ intent, and the parties’ intent
regarding the interaction between paragraphs 3 and 4 is ambiguous, the Court will not dismiss
this aspect of Moldea’s claim either.
III. Conclusion
For the foregoing reasons, the Court will deny Defendant’s Motion to Dismiss. A
separate Order shall accompany this Memorandum Opinion.
CHRISTOPHER R. COOPER
United States District Judge
Date: February 6, 2019
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