DC Court Hands Victory to Cafesjian Family


The National Bank of Washington building at the heart of the case

By Alin K. Gregorian
Mirror-Spectator Staff

WASHINGTON — The protracted lawsuit revolving around the building of the Armenian Genocide Museum and Memorial (AGM&M), which has pitted the Armenian Assembly of America against one of its main donors to the project, Gerard L. Cafesjian, is winding down. US District Judge Colleen Kollar-Kotelly of the US District Court of the District of Columbia ruled on January 26 that under the terms of a 2003 grant agreement, the National Bank of Washington building, which was one of the cornerstones of the proposed museum, should revert back to the Cafesjian Family Foundation, according to the terms of the agreement by December 31, 2010, he was entitled to receive the money back that he put in.In addition, the judgment allowed the Cafesjian Family Foundation one seat on the board of the Armenian Genocide Museum and Memorial, and asked the Assembly to pay a portion of attorney fees for specific portions of the litigation process during this case.

Attorney Michael DeMarco, of the international firm of K & L Gates LLP in Boston, who represented the Armenian Assembly of America in the case, and who is authorized to speak on behalf of the organization, said that the decision was “disappointing,” but that several other steps remain in the case.

The judge, he said, “determined that clause is valid and enforceable”

with respect to the “refund of contribution or property.”One point, he said, which has ended up in favor of the Assembly is that the Cafesjian Family Foundation (CFF) is not entitled to receive any money over what Cafesjian paid for the building in about 2000. The building is estimated to have appreciated in value significantly.

The next step for the Assembly, he said, is determining the value of the property. That process again will head to court. The determination of the value of the property today, he added, is “a significant issue.”

“I am gratified by this decision,” said President and CEO Gerard L. Cafesjian, adding that “the more significant vision for the Museum and Memorial can proceed without attempts to lessen the impact of the museum.”

In her 190-page opinion, Kollar-Kotelly dismissed a series of accusations by Assembly Chairman Hirair Hovnanian and his associates that Cafesjian and CFF Vice President John Waters delayed the museum’s progress, triggering the return of the real estate. The Court found instead that Cafesjian acted in good faith in managing the AGM&M.

“The delays in the development of the museum were not caused by Defendants’ mismanagement, but rather by the Board’s failure to reach agreement,” wrote Kollar-Kotelly, adding that “in light of the infrequent Board meetings and Hovnanian’s reluctance to get involved at even a basic level, it is hardly surprising that Cafesjian and Waters were unable to get the museum up and running during their three years at the helm.”

“We are very pleased with Judge Kollar-Kotelly’s comprehensive and well-reasoned decision,” concluded CFF’s legal counsel John B. Williams of Jones Day. “The court dealt with each and every allegation raised by Mr. Hovnanian and his colleagues, and rejected all of them. These were allegations that had no legitimate basis, and should never have been brought. Hopefully the court’s decision will lead to the conclusion of this litigation, and permit this project to move forward.”

Kollar-Kotelly in her judgment said that the testimony of Assembly Board of Trustees Chairman Hirair Hovnanian and his associates was repeatedly deemed “remarkable” and “not credible.” In many instances, observed the judge, “lack of memory appeared to be driven more by convenience than cognition.”

Referring to Hovnanian and several members of the leadership of the Assembly, she stated that “these individuals’ convenient lack of memory is an attempt (conscious or otherwise) to minimize their involvement in an agreement that turned out badly for the Assembly.”

The court also concluded that the chairman of its museum building and operation group had “sought to have the minutes amended toincrease the authority of the building and operations committee.”

DeMarco said that he was “disappointed that she made finding on the credibility of the witnesses and chose to believe the Cafesjian witnesses. Based upon her decision and reliance on testimony, their witnesses were more persuasive.”

“I thought our witnesses were honest and credible,” noted DeMarco, stressing that all of the Assembly witnesses have been pillars of the community and supporters of various Armenian causes for decades.

‘Negative Effect on Advocacy’

The whole case, DeMarco said, has had a “negative effect on Armenian advocacy.”

“It is a long and complicated case and decision. There are some preliminary decisions about what options we should avail ourselves of,” he added. “We’re not ruling out anappeal.”

The case started back in 2006, regarding the construction and future of the Armenian Genocide Museum and Memorial. He added that it is in the best interest of everyone involved with the case to conclude it and get back to the business of creating the museum.

He added that the “Assembly’s door is always open to reasonableness and thoughtfulness.”

The opinion of the judge contained harsh words for both sides, suggesting that litigiousness was causing a delay in the creation of a historic monument.

Judge Kollar-Kotelly said: “This litigation began as an attempt by Defendants to collect on an unpaid promissory note and quickly escalated into an unfortunate exchange of accusations and allegations grounded in suspicion and mistrust. Ultimately, the court finds that Defendants’ claim on the promissory note is time-barred and that the parties’ other allegations are unfounded — except for Defendants’ claim for indemnification for legal expenses and costs under the AGM&M By-Laws, which could have been avoided had the parties not engaged in this protracted litigation. CFF shall take possession of the Properties and be entitled to a single vote on the AGM&M Board of Trustees. Although the Court is aware that the parties’ prior efforts to resolve their differences have been unsuccessful, the Court strongly encourages the parties to work amicably to settle their remaining disputes. The court sincerely hopes that after years of fighting legal battles, the parties can put aside their differences andaccomplish the laudable goal of creating an Armenian Genocide museum and memorial.”

The Assembly initiated the museum planning and in 2003 secured an agreement with Cafesjian and the Cafesjian Family Foundation. There then followed a series of complicated transactions.

The foundation granted and pledged roughly $15 million to help the Armenian Assembly buy the four-story National Bank of Washington building and four adjacent pieces of property. The donation included an agreement that if the museum isn’t developed by December 31, 2010, the Cafesjian foundation can get either its money or the property back.

But problems became apparent by October 2006, when a Cafesjian ally filed legal documents that allegedly clouded the title of the museum property. The museum organizers subsequently claimed Cafesjian was “actively taking steps to delay the development” in hopes of regaining the property for his own purposes.

Cafesjian filed his own lawsuit, claiming that the museum’s board of directors deliberately shut him out from key planning decisions. Museum organizers make Cafesjian out to be a profit-seeking egotist, as they described his plans for a giant “Cafesjian Art Museum” next door to a “grandiose” genocide museum that would feature an enormous “Cafesjian Memorial.”

DeMarco said that the two sides have been asked to submit status reports on the open issues by February 18, with a hearing scheduled for February 24, to tie up loose ends.

(Material from McClatchy newspapers and a statement from the Cafesjian Family Foundation were used in this story.)