Cafesjian Foundation prevails in Genocide Museum lawsuit

by Emil Sanamyan

Published: Thursday January 27, 2011

National Bank of Washington building (center) and four structures to the left reverted to the Cafesjian Foundation. PQLiving.com

Washington - A U.S. court decision yesterday removed a major hurdle for the future Armenian Genocide Museum and Memorial when a federal judge ruled that all properties located in downtown Washington, which had been purchased and donated by Gerard L. Cafesjian for the purposes of the project, revert to the Cafesjian Family Foundation (CFF).

The January 26 ruling by Judge Colleen Kollar-Kotelly is a significant victory for Mr. Cafesjian and the museum project culminating a legal battle that continued for over three years.

"I am pleased with this decision," Mr. Cafesjian said reacting to the court ruling. "This decision means that the grand vision for the Museum and Memorial lives on."

In addition to the reversion of property, the ruling dismissed all claims launched against Mr. Cafesjian and CFF by Hirair Hovnanian and his associates, reinstated CFF on the board of the Armenian Genocide Museum & Memorial (AGMM Inc.) and ruled that Mr. Cafesjian is entitled to compensation of his legal fees.

In a comment for The Armenian Reporter (which is published by Mr. Cafesjian), CFF's legal counsel John B. Williams of Jones Day called the opinion "comprehensive and well-reasoned."

"Judge Kollar-Kotelly dealt with each and every allegation raised by Mr. Hovnanian and his colleagues, and rejected all of them," Mr. Williams said of the 190-page opinion. "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."

The ruling came following a 12-day public trial held in Washington last November. The trial featured documentary evidence and witness testimony that reconstructed the nature of the dispute and associated legal claims.

Reversion of property

Starting in the year 2000, Mr. Cafesjian initiated a large-scale purchase of a group of buildings located just two blocks from the White House. These included the historic National Bank of Washington building and four adjacent structures.

In 2003, the properties were donated to the newly-established AGMM, Inc. on the condition that they would be developed into the Armenian Genocide Museum and Memorial by December 31, 2010. Mr. Cafesjian, Mr. Hovnanian, Robert Kaloosdian and others were included on the AGMM, Inc. board as founding members.

According to witness testimony, subsequent efforts to develop the project were stymied by objections from Mr. Hovnanian and Mr. Kaloosdian, leaving the project in a standstill.  The court agreed and found that that Mr. Hovnanian and Mr. Kaloosdian were not supportive of Mr. Cafesjian's vision for the project.

Yesterday the judge ruled that the parties' agreement reached in 2003 remained in force and accordingly all the properties donated by Mr. Cafesjian had reverted to CFF as of December 31, 2010.

Rejection of claims

Mr. Hovnanian and several of his associates accused Mr. Cafesjian of mismanaging the AGMM, Inc., breaching his duties to the Armenian Assembly of America (AAA) as a life trustee, as well as a number of other claims, including the misappropriation of AAA's trade secrets.

As part of these claims, Mr. Hovnanian sought compensation for alleged damages caused, as well as the removal of CFF from AGMM board.  Hovnanian also sought a declaration that the reversionary clause agreed to in 2003 was no longer enforceable.

The judge rejected all of these claims as unfounded.  She also stated that portions of Mr. Hovnanian's and Mr. Kaloosdian's testimony were "incredible."

The judge further found that Mr. Cafesjian had no intention of damaging the AGMM, Inc. as asserted by Mr. Hovnanian and his associates.

Reinstatement on AGMM

Starting in 2007, Mr. Hovnanian and his associates effectively removed Mr. Cafesjian and CFF from AGMM, Inc. decision-making. The judge ruled that these actions were improper and in breach of the AGMM, Inc. by-laws.

The judge also noted that another AGMM board member, Van Krikorian, sought to "cover up" the dubious circumstances under which the AGMM Building & Operations Committee that he headed received authority beyond what was approved by AGMM, Inc., after Mr. Cafesjian and CFF were wrongfully ousted from the board.

The judge ordered that CFF be allowed to regain its seat on the AGMM, Inc. board. As an institutional donor, CFF retains a decisive vote with regard to AGMM's future.

Compensation

The judge did not find credible Mr. Hovnanian's claim that Mr. Cafesjian forgave a $500,000 loan he made to AAA in the year 2000. But a demand for its return was not satisfied on technical grounds of time passed.

The judge also ruled that because of the unfounded nature of the claims against him, Mr. Cafesjian was entitled to compensation of his legal fees incurred as part of the litigation.

The exact amount of compensation and other outstanding financial and transition issues will be considered in an additional court hearing next month.

Opinion by Judge Kollar-Kotelly is available on the web site of the U.S. District Court for the District of Columbia at the following link.