Michael Francis and Queue, LLC v. Munir Rehman and HAK, LLC , 110 A.3d 615 ( 2015 )

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DISTRICT OF COLUMBIA COURT OF APPEALS
No. 14-CV-190
MICHAEL FRANCIS and QUEUE, LLC, APPELLANTS,
v.
MUNIR REHMAN and HAK, LLC, APPELLEES.
Appeal from the Superior Court
of the District of Columbia
(CAB-473-13)
(Hon. Natalia M. Combs Greene, Motion Judge)
(Submitted November 6, 2014 Decided February 26, 2015)
Earl “Trey” Mayfield and Michael P. Lewis were on the brief for appellants.
Matthew August LeFande was on the brief for appellees.
Before GLICKMAN and THOMPSON, Associate Judges, and PRYOR, Senior
Judge.
THOMPSON, Associate Judge: In January 2013, plaintiffs/appellants Michael
Francis and Queue, LLC (“Queue”) brought suit against defendants/appellees
Munir Rehman and HAK, LLC (“HAK”), alleging breach of contract, unjust
enrichment, breach of fiduciary duties, and fraud and seeking an accounting. After
the Superior Court dismissed certain of the claims and afforded appellants leave to
2
amend their fraud claim, appellants voluntarily dismissed the remaining claims,
positioning themselves to bring this appeal challenging the court’s order that
granted in part appellees’ motion to dismiss. Although a developed record might
show that appellees are entitled to judgment on the ground that the underlying
contract (for “design services”) was unenforceable because appellant Francis
lacked a license to practice architecture in the District of Columbia, we are
persuaded that the court could not so determine at the motion-to-dismiss stage.
Accordingly, we reverse the judgment and remand for further proceedings.
I. Background
Appellants alleged the following in their First Amended Complaint.
Appellant Francis is the owner and operator of appellant Queue and is a minority
owner of HAK. Appellee Rehman is a nightclub and restaurant developer and the
controlling owner of HAK, which operates a bar/restaurant/nightclub establishment
at 1219 Connecticut Avenue, N.W. (“1219 Connecticut”).
3
In 2008, Francis and Queue agreed to provide “design services” for
Rehman’s then-new 1219 Connecticut venture. Appellants were “to be
compensated through profits obtained with Mr. Francis as a co-owner of the
business. Specifically, Francis and Rehman agreed that Francis would be
reimbursed for his actual expenses in obtaining the various services, would be paid
a fee of $25,000, and would have a 2.5% ownership interest in HAK. The “design
services consisted of . . . obtaining design services from a licensed architect and
third party consultant services[,]” such as those of lighting designers and structural
engineers. The First Amended Complaint further alleges that, “[w]ith [Rehman’s]
knowledge and consent,” Francis “obtained those designs from Jerald Clark, a
licensed architect in the District of Columbia.” It avers that “[a]ll design drawings
provided for Mr. Rehman’s projects by Architect Clark were prepared under his
direct supervision and responsibility [and] bore his seal[.]” Appended to the First
Amended Complaint is a copy of a March 2009 Joint Ownership Agreement, under
which, in exchange for receiving a 2.5% ownership interest in HAK, appellant
Francis was to “contribute his time, talent, and resources to performing the
architectural work in designing and building out any space or spaces in the
premises at 1219 Connecticut Avenue[.]”
4
According to the First Amended Complaint, Francis obtained the services of
Clark and “advanced the expenses for[] third party consultants[,]” and design work
on the 1219 Connecticut project was completed by late 2009, but Rehman paid
Francis only a $15,000 fee, failed to pay Francis any of the profits of HAK or to
provide its financial records, and failed to reimburse Francis for expenses.
The First Amended Complaint further alleges that Rehman and Francis
entered into another agreement, which was never memorialized in writing, under
which Francis would provide similar services in connection with a Rehman
establishment located at 1223 Connecticut Ave., N.W. (“1223 Connecticut”).
Under the agreement, Rehman was to “cover expenses [Francis] incurred in the
design” and Francis was to receive “a 5% ownership interest in [the 1223
Connecticut establishment] in exchange for over $125,000.00 in services obtaining
the designs from Architect Clark and procuring third party consultants for those
designs.” The Complaint avers that appellants provide the contracted-for services,
that Francis “loaned funds to [Rehman] in the form of payments to third party
consultants for [the project] . . . with the express agreement that [Rehman] would
reimburse those loans[,]” and that the 1223 Connecticut establishment opened in
2010, but that Rehman has not repaid the loans and Francis has not been paid any
profits owed to him.
5
Appellants filed their Initial Complaint on January 22, 2013, and their First
Amended Complaint on May 8, 2013. Count I of the First Amended Complaint
alleges that appellees breached the contract relating to 1219 Connecticut. Count II
alleges that appellees breached the contract relating to 1223 Connecticut.
Although captioned “Unjust Enrichment (1223 Connecticut),” Count III alleges
that appellants conferred benefits on appellees by providing services and
advancing expenses for both the 1219 Connecticut and 1223 Connecticut ventures
and that appellees have been unjustly enriched by retaining those benefits. Counts
IV and V allege breach of fiduciary duty. Count IV is based on Rehman’s failure
to reimburse Francis in connection with the 1219 Connecticut project and to pay
him his share of HAK profits. Count V is premised on appellees’ failure to
reimburse appellants and to pay Francis profits in connection with the 1223
Connecticut project. Count VI alleges fraud based on appellees’ false
representations that Francis and Queue would be compensated and reimbursed as
described above.
Appellees moved to dismiss the First Amended Complaint pursuant to
Super. Ct. Civ. R. 12 (b)(6) for failure to state a claim upon which relief may be
granted. On July 17, 2013, the Superior Court judge (the Honorable Natalia M.
6
Combs Greene) granted the motion to dismiss Count I, reasoning that “Plaintiff
Francis is not a licensed architect” and that “negotiat[ing] a contract to provide
architectural services while not licensed as an architect is sufficient to void [a]
contract.1 For the same reason, Judge Combs Greene also dismissed Count IV,
reasoning that the breach of fiduciary duty claim for the 1219 Connecticut project
arose out of the “void and unenforceable” contract for architectural and design
services. Judge Combs Greene declined to dismiss Count II and related Count V,
reasoning that she could not determine whether the terms of the oral agreement
related to the 1223 Connecticut project were the same as the terms of the “void and
unenforceable” 1219 Connecticut agreement. In addressing the Count III unjust
enrichment claims for “[b]oth [p]rojects,” Judge Combs Greene stated that an
unlicensed architect or interior designer “cannot collect monies due on a quasi-
contractual basis[,]” but declined to dismiss the count because the “circumstances
under which the money was loaned . . . are unclear.”2 Finally, Judge Combs
1
The court also reasoned that the allegation about the supervision and
approval of an architect licensed in the District of Columbia “has no bearing on the
merit of the claim[] [as] [n]either the case law, nor the [r]egulations make an
exception for unlicensed architects or interior designers who are supervised by a
D.C.-licensed professional.”
2
The court explained that it was not clear whether Francis loaned Rehman
money “in his professional capacity” or whether the loan was “directly tied to the
written agreement.” Appellants assert that the court “dismissed Count III in part,
to the extent it sought compensation for design services Francis had provided for
(continued…)
7
Greene determined that appellants had not pled their fraud count (Count VI) with
specificity, and ruled that appellants would be afforded the opportunity to submit a
more definite statement as to that count.
Subsequently, appellants filed a Second Amended Complaint, eliminating
the dismissed counts, renumbering the remaining counts, and providing specificity
regarding the fraud claim. Appellees again moved to dismiss. Judge Combs
Greene denied the motion to dismiss. However, explaining that the court’s July
17, 2013, ruling had “effectively gutted” their case, and in order to expedite an
appeal of the portions of that ruling that dismissed the claims that appellants assert
are their “primary claims,” appellants thereafter moved to voluntarily dismiss
without prejudice all the counts set forth in their Second Amended Complaint. 3 On
January 10, 2014, the Honorable Robert Okun, to whom the matter had been
(…continued)
either property, but left intact his claim for the amounts he had loaned Rehman to
pay consultants.” We agree with this reading of the July 17, 2013, order.
3
Appellants did not forfeit their right to challenge the July 17, 2013, order
by filing the Second Amended Complaint that removed the dismissed claims. See
Young v. City of Mt. Ranier, 238 F.3d 567, 572-73 (4th Cir. 2001) (“[I]if a claim is
dismissed without leave to amend, the plaintiff does not forfeit the right to
challenge the dismissal on appeal simply by filing an amended complaint that does
not re-allege the dismissed claim.”).
8
reassigned, granted the motion, and this appeal from Judge Combs Greene’s July
17, 2013, ruling followed.4
Because appellants voluntarily dismissed the counts included in the Second
Amended Complaint, the only issues on appeal are whether Judge Combs Greene
erred in dismissing appellants’ claims for breach of contract, for unjust enrichment
insofar as that claim was based on appellants’ services (rather than advances of
money), and for breach of fiduciary duty in connection with the 1219 Connecticut
project, all as set out in the First Amended Complaint.5 Our review is de novo.
4
After appellants filed their motion to voluntarily dismiss, appellees filed a
motion for summary judgment as to the claims in the Second Amended Complaint
as well as a motion for sanctions. Because Judge Okun granted appellants’ motion
to voluntarily dismiss, he denied appellees’ summary judgment motion as moot.
He did not rule on appellees’ motion for sanctions. Although appellees argue that
this court should rule that the claims appellants voluntarily dismissed are time-
barred and that appellants’ voluntarily dismissed fraud claim was not cognizable,
we do not consider those arguments since appellees did not appeal from Judge
Okun’s order denying as moot their motion for summary judgment.
5
Appellees argue that we can uphold the July 17, 2013, judgment on the
ground that appellees were entitled to summary judgment on the claims that Judge
Combs Greene dismissed under Rule 12 (b)(6). They contend that there would be
no procedural unfairness in doing so since appellants “had notice of the ground
upon which affirmance is proposed, as well as an opportunity to make an
appropriate factual and legal presentation with respect thereto” when appellants
filed their opposition to the motion for summary judgment. Appellees’ Brief at 14
(quoting In re Walker, 856 A.2d 579, 586 (D.C. 2004) (per curiam). However,
appellees moved for summary judgment only as to the “remaining claims,” i.e., the
claims that were voluntarily dismissed, not as to the claims that are before us now.
(continued…)
9
See Chamberlain v. American Honda Fin. Corp., 931 A.2d 1018, 1022 (D.C.
2007).
II. Applicable Law
A court considering a Rule 12 (b)(6) motion must “construe the complaint in
the light most favorable to the plaintiff by taking the facts alleged in the complaint
as true.” Pietrangelo v. Wilmer Cutler Pickering Hale & Dorr, LLP, 68 A.3d 697,
709 (D.C. 2013). “[A] defendant raising a 12 (b)(6) defense cannot assert any facts
which do not appear on the face of the complaint itself.” Carey v. Edgewood
Mgmt. Corp., 754 A.2d 951, 954 (D.C. 2000). “When the trial court decides a
Rule 12 (b)(6) motion by considering factual material outside the complaint, the
motion shall be treated as if filed pursuant to Rule 56, which permits the grant of
summary judgment if there are no material facts in dispute and the movant is
entitled to judgment as a matter of law.” Kitt v. Pathmakers, Inc., 672 A.2d 76, 79
(D.C. 1996). However, “when treating a Rule 12 (b)(6) motion as a motion for
summary judgment, where outside factual material is not excluded, the trial court
(…continued)
Therefore, even assuming arguendo that appellees’ arguments that they were
entitled to summary judgment on all of appellants’ claims have merit,
“considerations of procedural fairness preclude us from affirming on the ground
now being asserted[.]” Walker, 856 A.2d at 586.
10
must give the parties notice of its intention to consider summary judgment and an
adequate opportunity to present affidavits or other matters appropriate to a ruling
on such a motion.” Washkoviak v. Sallie Mae, 900 A.2d 168, 178 (D.C. 2006)
(internal quotation marks omitted); see also Herbin v. Hoeffel, 727 A.2d 883, 886-
87 (D.C. 1999) (“[F]or the trial court to have relied on those facts outside the
complaint, without notifying Herbin that it intended to do so and giving him an
opportunity to present additional material relevant to a summary judgment motion,
is reversible error.”).
“[D]ismissal under Rule 12 (b)(6) is appropriate where the complaint fails to
allege the elements of a legally viable claim.” Chamberlain, 931 A.2d at 1023.
“To prevail on a claim of breach of contract, a party must establish (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) (emphasis added). However, to state a
claim for breach of contract so as to survive a Rule 12 (b)(6) motion to dismiss, it
is enough for the plaintiff to describe the terms of the alleged contract and the
nature of the defendant’s breach. Nattah v. Bush, 605 F.3d 1052, 1058 (D.C. Cir.
2010) (reasoning that plaintiff was not required to assert in the complaint that the
individuals who made oral promises to him had authority to contract on behalf of
11
the defendant company). To state a claim, a complaint need not assert that the
alleged contract is legal in all respects; rather, illegality is an affirmative defense.
See Super. Ct. Civ. R. 8 (c); cf. Rock River Commc’ns, Inc. v. Universal Music
Grp., Inc., 745 F.3d 343, 350 (9th Cir. 2014) (“[I]llegality is an affirmative defense
to be pled in the defendant’s answer[.]”); Abbas v. Dixon, 480 F.3d 636, 640 (2d
Cir. 2007) (“The pleading requirements . . . do not compel a litigant to anticipate
potential affirmative defenses, . . . and to affirmatively plead facts in avoidance of
such defenses.”); 5 Charles Alan Wright & Arthur R. Miller, FED. PRACTICE AND
PROCEDURE § 1276 (3d ed. 2002); McNamara v. Picken, 866 F. Supp. 2d 10, 17
(D.D.C. 2012) (“The plaintiff was not required to anticipatorily negate that defense
in his pleadings, and thus the Court cannot conclude, as a matter of law, that
plaintiff cannot prove any set of facts entitling him to relief.”) (internal quotation
marks omitted); Harris v. Bucher, 143 P. 796 (Cal. Ct. App. 1914) (“[I]n an action
brought by one practicing architecture to recover for services rendered, it is not
necessary to allege and prove compliance with the act regulating the practice of
architecture, but that noncompliance therewith is a matter of defense to be pleaded
and proved by defendant in the action.”). An affirmative defense such as illegality
can be the basis for granting a Rule 12 (b)(6) motion to dismiss “only when the
[defense] is established on the face of the complaint.” Hafley v. Lohman, 90 F.3d
264, 266 (8th Cir. 1996).
12
D.C. Code § 47-2853.63 (2012 Repl.) provides that “unless licensed to
practice architecture . . . no person shall engage, directly or indirectly, in the
practice of architecture in the District[.]” The statute defines the term “practice of
architecture” to mean “rendering or offering to render services in connection with
the design and construction, enlargement, or alteration of a structure . . . that ha[s]
as [its] principal purpose human occupancy or habitation, as well as the space
within and surrounding the[] structures.” Id. at § 47-2853.61; see also 17
D.C.M.R. § 3410.1 (2008) (same). “These services include planning and providing
studies, designs, drawings, specifications, and other technical submissions, and the
administration of construction contracts.”6 D.C. Code § 47-2853.61; see also 17
D.C.M.R. § 3410.1 (same). This court held in Sturdza v. United Arab Emirates,
11 A.3d 251 (D.C. 2011), that the “practice of architecture” “encompasses not only
the performance of architectural services, but also any negotiations and agreement
to provide such services.” Id. at 255.
6
Similarly, District of Columbia regulations require a license to practice
interior design, which encompasses, “providing or offering to provide
consultations, preliminary studies, drawings, specifications, or any related service
for the design analysis, programming, space planning, or aesthetic planning of the
interior of buildings[.]” 17 D.C.M.R. §§ 3201.2, 3209.1 (2008); D.C. Code § 47-
2853.101 (2012 Repl.).
13
The architect licensure requirement is intended “to safeguard life, health,
and property, and to promote the public welfare.” Id. at 254-55 (internal quotation
marks omitted); see also Holiday Homes, Inc. v. Briley, 122 A.2d 229, 231 (D.C.
1956) (“The Architect’s Registration Act . . . is a regulatory act designed for the
public welfare[.]”). “[A] contract made in violation of a licensing statute that is
designed to protect the public will usually be considered void and unenforceable,
and [the] party violating the statute cannot collect monies due on a quasi-
contractual basis either.” Sturdza, 11 A.3d at 257 (internal quotation marks
omitted).
While cases in some other jurisdictions explicitly recognize that an
unlicensed entity may contract to provide architectural services through a licensed
architect,7 this court has not addressed whether an individual or firm must be
7
See, e.g., McIver-Morgan, Inc. v. Dal Piaz, 964 N.Y.S.2d 515, 516, 519
521 (N.Y. App. Div. 2013) (affirming contract arbitration award in favor of firm
that “specializ[ed] in all facets of high-end residential interior design and
architectural services,” even though the firm was not a professional corporation
and had no license to practice architecture, because the firm engaged as a
consultant a licensed and registered architect who “had a substantive, active role in
the provision of architectural services,” and because the law requiring a license to
practice architecture was not to be “‘slavishly applied’”) (citing SKR Design Grp. v
Yonehama, Inc., 660 N.Y.S.2d 119, 122 (N.Y. App. Div. 1997) (“That a contractor
engages the services of a licensed professional to perform a portion of the services
covered by the contract does not convert that contract into one for the performance
(continued…)
14
licensed as an architect in the District of Columbia in order to contract to perform
architectural work through or under the supervision of a licensed architect. There
are, however, authorities in this jurisdiction that imply that an individual without a
license to practice architecture in the District of Columbia may, at least under some
circumstances, prepare architectural drawings under the supervision of a licensed
architect. See Sturdza v. United Arab Emirates, 281 F.3d 1287, 1302 (D.C. Cir.
2002) (rejecting Sturdza’s argument that her contract claims were not barred
because, under an explicit exception contained in a prior statute, unlicensed
architects were permitted to “prepare technical submissions . . . under the direct
supervision of an architect licensed in the District”; reasoning that “[a]lthough
Sturdza apparently did collaborate to some extent with a D.C. architect, . . . she
never alleges that she was under his direct supervision”); DCRA v. Keys, No. CR-I-
08-S701302, 2009 D.C. Off. Adj. Hear. LEXIS 121, at *17-18 (OAH Aug. 28,
2009) (“Given the stringent regulatory provisions in place in the District of
Columbia, an unlicensed architect should not be receiving compensation for work
(…continued)
of those services.”)); Walter M. Ballard Corp. v. Dougherty, 106 Cal. App. 2d 35,
40-41 (Cal. Dist. Ct. App. 1951) (“The act does not forbid a corporation to employ
certified architects, have them prepare plans and specifications, and then furnish
such plans and specifications to other persons . . . [T]hat the partnership may
contract and collect for architectural services as long as licensed architects perform
the work; and the fact that nonlicensed contractors thus share in architectural fees
is immaterial.”).
15
such as design drawings, technical submissions and administering contracts
without the supervision of a licensed architect or licensed architectural firm.”); 17
D.C.M.R. § 3413.5 (“No licensed architect shall affix his or her seal or signature to
any technical submission that was not prepared by him or her or under his or her
direct supervision or by another licensed architect and reviewed, approved, or
modified and adopted under his or her direct supervision.”) (implying, we think,
that the individual preparing a technical submission under the supervision of the
licensed architect need not be “another licensed architect”); 17 D.C.M.R. §
3411.14 (“Each office located in the District of Columbia maintained for the
preparation of drawings, specifications, reports, or other professional work shall
have a licensed architect who is regularly employed at the office and who directly
supervises such work.”).
We also note that 17 D.C.M.R. § 3403.1(b) provides that an individual
applying for an architect’s license by examination must “[s]atisfy the Intern
Development Program (IDP) training requirements,” i.e., “[t]he current version of
the Intern Development Program as established and administered by NCARB [the
National Council of Architectural Registration Boards].” 17 D.C.M.R. § 3499.
According to the NCARB website, the IDP requires an intern to obtain, inter alia,
a minimum of 1860 hours of experience in the practice of architecture under the
16
supervision of a licensed architect. See NCARB, Intern Development Program
Guidelines, 10 (2014), http://www.ncarb.org/en/Experience-Through-
Internships/~/media/Files/PDF/Guidelines/IDP_Guidelines.pdf. In other words,
the regulatory scheme prescribes that an unlicensed architect must engage in the
practice of architecture (under the supervision of a licensed architect) to obtain
licensure.8 It thus cautions against a too-literal interpretation of D.C. Code § 47-
2853.63 that does not take into account whether design work was performed under
the supervision of a licensed architect. It suggests that “a commonsense approach
to the operative facts should dictate” our analysis of whether the services at issue
in this case implicate the prohibition described in D.C. Code § 47-2853.63. See
McIver-Morgan, 964 N.Y.S.2d at 519; see also cases cited supra note 7; cf.
Highpoint Townhouses, Inc. v. Rapp, 423 A.2d 932, 934 n.2 (D.C. 1980) (“The
public protection inherent in the plumbing licensing statutes arguably would be
met by an unlicensed subcontractor working ‘under the immediate personal
supervision’ of another, licensed subcontractor.”).
8
We note that, in the Second Amended Complaint, appellants alleged that
Francis “was being mentored by D.C.-licensed architect Jerald Clark while Mr.
Francis was in the process of registering” for the IDP through the NCARB.
17
III. Analysis
In this case, Judge Combs Greene granted appellees’ Rule 12 (b)(6) motion
to dismiss because “[t]he First Amended Complaint and Plaintiffs’ response do not
contain facts sufficient for the Court to find that a valid contract was formed
between the parties.” July 17, 2013, Order at 4. The court explained first that
“Plaintiff Francis is not a licensed architect” and that “any agreement that he
‘negotiat[ed]’ or entered into for the provision of architectural, interior design, or
design service is ‘void and unenforceable.’” July 17, 2013, Order at 4 (quoting
Sturdza, 11 A.3d at 252-57).
However, nowhere in the First Amended Complaint did appellants state that
appellant Francis is not licensed as an architect in the District of Columbia, 9 or
acknowledge that the contracted-for services entailed work by Francis for which he
9
For that fact (which Francis concedes), the court relied on appellees’
motion to dismiss. As appellants argued in their opposition to the motion to
dismiss, the motion relied on “facts, inferences and assumptions not in the
Complaint.”
18
was required to have an architect’s license.10 Further, to state a claim, appellants
were not required to plead Francis’s licensure status or to plead that the contract
was for work that appellants could lawfully perform, in order to anticipatorily
negate the affirmative defense of illegality. And, given the allegation in the First
Amended Complaint that the contracted-for “design services consisted of . . .
obtaining design services from a licensed architect” and that “[a]ll design drawings
provided for Mr. Rehman’s projects by Architect Clark were prepared under his
direct supervision and responsibility, [and] bore his seal,” we cannot agree with
Judge Combs Greene that the face of the First Amended Complaint made it
apparent that appellants offered to provide and provided services for which they
were required to hold a District of Columbia architect’s license. Appellants’
allegations in the First Amended Complaint that they contracted to provide “design
services” for appellees’ ventures and the statement in the Joint Ownership
Agreement (appended to the First Amended Complaint) that appellant Francis was
to “contribute his time, talent, and resources to performing the architectural work
in designing and building out any space or spaces in the premises at 1219
Connecticut Avenue” are not facially inconsistent with a claim that architectural
10
Instead, appellants alleged in the First Amended Complaint that they
“obtained . . . designs from Jerald Clark, a licensed architect in the District of
Columbia.”
19
services were provided only through or under the supervision of a licensed
architect.
We conclude that before the court could “find that [no] valid contract was
formed between the parties,” it was obligated to treat appellees’ motion as a
motion for summary judgment and to afford appellants an opportunity to come
forward with affidavits, documentation,11 or other evidence to establish precisely
what work appellants negotiated to perform and performed. The court was
required to “evaluate this dispute with great attention to detail in order to determine
whether [appellants’] services were of the . . . type which the state reserves to
licensed [architects].” 12 Rudow v. Holly Radio Co., No. 88-3001, 1989 U.S. Dist.
LEXIS 4995, *4, 5 (D.N.J. May 3, 1989) (holding, in case where the asserted
defense to plaintiff’s contract action to recover fees for his “professional services”
11
For example, appellants should be afforded an opportunity to document
their claim that the drawings provided pursuant to the contract bore the seal of
licensed architect Clark. We note that “[a] licensed architect shall not sign or seal
technical submissions unless they were prepared by the architect or under his or
her direct supervision[,]”17 D.C.M.R. § 3411.15, and that “[t]he seal appearing on
any technical submission shall be prima facie evidence that the technical
submission was prepared by or under the direct supervision of the individual
named on the seal.” 17 D.C.M.R. § 3413.3.
12
One relevant circumstance here might be appellant Francis’s status as a
partial owner of HAK, a status in which he at least arguably was entitled to convey
to a licensed architect, through drawing or otherwise, his concepts for the design of
the 1219 Connecticut establishment.
20
was that the “professional services” were for the unlicensed practice of law in
New Jersey and that the contract was therefore illegal and unenforceable, that
“questions of unlawful practice of law will turn on the particular facts presented,”
that the issue could “be determined only on a full and complete appreciation of the
events and surrounding circumstances,” that the trial court not “evaluate the merits
of [appellees’] affirmative defense without reference to matters outside the
pleadings[,]” and therefore, that judgment on the pleadings was not warranted)
(internal quotations and brackets omitted); see also Dunn v. Finlayson, 104 A.2d
830, 832-33 (D.C. 1954) (reasoning, in case in which the contract sued upon
contained a provision by which an architect “agree[d] to prepare all contracts
between the Owner and the various sub-contractors” and the defendant owner
argued that the agreement was illegal because the plaintiff architect “undertook to
render legal services” even though he was not a lawyer, that there was nothing in
the record to show precisely what the architect did in preparing the contracts, and
holding that “[u]nder these circumstances we cannot hold that [the architect] either
agreed to or did engage in the unauthorized practice of the law”).
Appellees argue that the new factual allegations contained in the First
Amended Complaint (such as the allegation that appellants performed work under
the direct supervision of a licensed architect) are irreconcilable with the allegations
in the Initial Complaint, which appellees assert appellants changed in order to
21
respond to the motion to dismiss. Appellees assert that the “irreconcilable”
allegations of the First Amended Complaint “must be disregarded” and only the
allegations in the Initial Complaint accepted as true for purposes of analysis.
However, “‘[o]nce an amended pleading is interposed, the original pleading no
longer performs any function in the case[.]’” Hayward v. Cleveland Clinic Found.,
759 F.3d 601, 617 (6th Cir. 2014) (quoting 6 Charles Alan Wright & Arthur R.
Miller, FEDERAL PRACTICE AND PROCEDURE § 1476 (3d ed. 2002)). We also do not
agree that the allegations in the Initial Complaint and the First Amended
Complaint are irreconcilable; the allegations that appellants “provided design
services” to appellants and “performed design services” for appellee Rehman’s
ventures, Initial Complaint ¶¶ 1, 7, do not necessarily conflict with the allegation in
the First Amended Complaint that “[t]hose design services consisted of
[appellants] obtaining design services from a licensed architect[.]”13 First
Amended Complaint ¶ 8.14 Moreover, even if the trial court or we are inclined to
13
This is especially so since both complaints allege that the expenses
Francis incurred “in the course of designing” the venues include sums spent for
“Design Consultants.” Initial Complaint ¶ 13; First Amended Complaint ¶ 19.
14
This case is quite unlike Green v. Niles, No. 11 Civ. 1349, 2012 U.S.
Dist. LEXIS 40297, *14-19 (S.D.N.Y. Mar. 23, 2012), a case on which appellees
rely. There, the plaintiff asserted in his original complaint and first amended
complaint that he “wait[ed] . . . until December 2010 to file . . . a grievance,” but
asserted in his second amended complaint, filed after he had received a preview of
the defendant’s arguments in their motion to dismiss, that “he had filed a formal
(continued…)
22
disbelieve some of the allegations in the First Amended Complaint, we may not
“countenance . . . dismissal[] based on [such] a . . . disbelief.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 556 (2007) (internal quotation marks omitted). It is well-
established that “a well-pleaded complaint may proceed even if it appears that a
recovery is very remote and unlikely” once the record is developed. Id.
For the foregoing reasons, we hold that it was error to grant the motion to
dismiss for failure to state a claim. Wherefore, insofar as the July 17, 2013, order
dismissed appellants’ breach of contract claim relating to the 1219 Connecticut
project and the related unjust enrichment and breach of fiduciary duty claims, the
order is reversed, and the case is remanded for further proceedings consistent with
this opinion.
So ordered.
(…continued)
grievance . . . in October 2010,” a claim that the court observed “appears, quite
clearly, to be a recent fabrication,” which, the court reasoned, it was not required to
accept as true.