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GROUP CAN STAY THOUGH MUSEUM PLAN FELL APART
By Matt Reynolds
Courthouse News Service
Sept 14 2011
(CN) - The Armenian Assembly of America can stay in a downtown
Washington, D.C., building meant to house a contentious, and now
defunct, Armenian Genocide museum and memorial project, a federal
judge ruled.
Earlier this year, the court ruled that the failure to develop the
property into a museum by the Dec. 31, 2010, deadline triggered the
reversion clause of an 11-page grant agreement between the Cafesjian
Family Foundation and the Armenian Assembly of America.
U.S. District Judge Colleen Kollar-Kotelly largely dismissed a series
of claims and counterclaims between the assembly and two former board
members after a 12-day bench trial in November.
The reversion clause required the assembly to transfer all properties
associated with the project over to one of the defendants, Gerard
Cafesjian, according to the court.
Cafesjian helped purchase a building for an Armenian Genocide
museum and memorial, conceived in the late 1990s, and also bought
four properties adjacent to the building, which he later donated to
expand the project.
Cafesjian also assisted in the formation of Armenian Genocide Museum
and Memorial Inc. (AGM&M) but distanced himself from the nonprofit's
board after it failed to reach consensus on how to complete the museum.
Cafesjian handpicked John Waters, the other defendant, as his successor
on the board. But after Cafesjian sued the assembly for payment of
an unpaid promissory note, the board excluded Waters from further
participation in the project.
"This resulted in a series of lawsuits filed by the parties fighting
for control of AGM&M and alleging mismanagement of the corporation,"
the court said. "The three other AGM&M trustees attempted to move
forward with the project without Waters's involvement, but they were
unable to raise the funds necessary to implement a development plan."
After Kollar-Kotelly upheld the validity of the reversion clause,
Cafesjian asked the assembly and Armenian National Institute to vacate
one of the buildings he purchased: the Families U.S.A. Building.
When the assembly refused, arguing that it held a valid leasehold
to the property, Cafesjian asked the court to void that leasehold
interest under the reversion clause.
But Kollar-Kotelly noted Monday that the court had already found that
the lease did not violate the grant agreement.
"Defendants have assumed without discussion that the reversion clause
in the grant agreement created a defeasible estate," according to the
13-page opinion. "However, based on the structure of the transactions
through which AGM&M acquired title, the court cannot conclude that
AGM&M's interest in the property was defeasible by CFF's exercise of
the reversion clause."
Kollar-Kotelly conceded to the defendants' basic proposition that the
assembly's leasehold interest would have been extinguished when AGM&M
transferred the property to the Cafesjian Family Foundation if AGM&M's
property interest in the Families U.S.A. building was defeasible.
Neither Cafesjian nor his foundation, however, ever held a "direct
interest" in the Families U.S.A. building or other adjacent properties
after they were conveyed to AGM&M by third-party sellers, according
to the court.
Thus, Cafesjian and the foundation did not "retain a reversionary
interest in the properties," Kollar-Kotelly said.
"At most, Cafesjian and CFF could have an executory interest in
the properties," she wrote. "However, any defeasible fee interest
subject to an executory interest would have to be created by deed
under D.C. law."
Kollar-Kotelly stated that the deed conveying title of the building
to AGM&M made "no reference to any conditions that would make the
fee interest defeasible."
"Therefore, AGM&M took a fee simple absolute interest in the Families
U.S.A. building, and that interest was transferred, not extinguished,
when CFF exercised its rights under the reversion clause in the grant
agreement," the decision states. "Accordingly, the leasehold interest
conveyed by AGM&M to the Assembly is also transferred."
The court also denied Cafesjian's motion for attorneys' fees for
vexatious litigation.
http://www.courthousenews.com/2011/09/14/39770.htm
By Matt Reynolds
Courthouse News Service
Sept 14 2011
(CN) - The Armenian Assembly of America can stay in a downtown
Washington, D.C., building meant to house a contentious, and now
defunct, Armenian Genocide museum and memorial project, a federal
judge ruled.
Earlier this year, the court ruled that the failure to develop the
property into a museum by the Dec. 31, 2010, deadline triggered the
reversion clause of an 11-page grant agreement between the Cafesjian
Family Foundation and the Armenian Assembly of America.
U.S. District Judge Colleen Kollar-Kotelly largely dismissed a series
of claims and counterclaims between the assembly and two former board
members after a 12-day bench trial in November.
The reversion clause required the assembly to transfer all properties
associated with the project over to one of the defendants, Gerard
Cafesjian, according to the court.
Cafesjian helped purchase a building for an Armenian Genocide
museum and memorial, conceived in the late 1990s, and also bought
four properties adjacent to the building, which he later donated to
expand the project.
Cafesjian also assisted in the formation of Armenian Genocide Museum
and Memorial Inc. (AGM&M) but distanced himself from the nonprofit's
board after it failed to reach consensus on how to complete the museum.
Cafesjian handpicked John Waters, the other defendant, as his successor
on the board. But after Cafesjian sued the assembly for payment of
an unpaid promissory note, the board excluded Waters from further
participation in the project.
"This resulted in a series of lawsuits filed by the parties fighting
for control of AGM&M and alleging mismanagement of the corporation,"
the court said. "The three other AGM&M trustees attempted to move
forward with the project without Waters's involvement, but they were
unable to raise the funds necessary to implement a development plan."
After Kollar-Kotelly upheld the validity of the reversion clause,
Cafesjian asked the assembly and Armenian National Institute to vacate
one of the buildings he purchased: the Families U.S.A. Building.
When the assembly refused, arguing that it held a valid leasehold
to the property, Cafesjian asked the court to void that leasehold
interest under the reversion clause.
But Kollar-Kotelly noted Monday that the court had already found that
the lease did not violate the grant agreement.
"Defendants have assumed without discussion that the reversion clause
in the grant agreement created a defeasible estate," according to the
13-page opinion. "However, based on the structure of the transactions
through which AGM&M acquired title, the court cannot conclude that
AGM&M's interest in the property was defeasible by CFF's exercise of
the reversion clause."
Kollar-Kotelly conceded to the defendants' basic proposition that the
assembly's leasehold interest would have been extinguished when AGM&M
transferred the property to the Cafesjian Family Foundation if AGM&M's
property interest in the Families U.S.A. building was defeasible.
Neither Cafesjian nor his foundation, however, ever held a "direct
interest" in the Families U.S.A. building or other adjacent properties
after they were conveyed to AGM&M by third-party sellers, according
to the court.
Thus, Cafesjian and the foundation did not "retain a reversionary
interest in the properties," Kollar-Kotelly said.
"At most, Cafesjian and CFF could have an executory interest in
the properties," she wrote. "However, any defeasible fee interest
subject to an executory interest would have to be created by deed
under D.C. law."
Kollar-Kotelly stated that the deed conveying title of the building
to AGM&M made "no reference to any conditions that would make the
fee interest defeasible."
"Therefore, AGM&M took a fee simple absolute interest in the Families
U.S.A. building, and that interest was transferred, not extinguished,
when CFF exercised its rights under the reversion clause in the grant
agreement," the decision states. "Accordingly, the leasehold interest
conveyed by AGM&M to the Assembly is also transferred."
The court also denied Cafesjian's motion for attorneys' fees for
vexatious litigation.
http://www.courthousenews.com/2011/09/14/39770.htm