In September, a partner in Rogue 24 sued fellow owner and chef R.J. Cooper for breach of contract for failing to repay a $300,000 personal loan to the modernist restaurant in Blagden Alley. The civil suit has continued to move through D.C. Superior Court despite missing one important element: a written contract between the owners.
Neither side will publicly discuss the suit, but the case against the James Beard Award-winning Cooper and his wife and business partner, Judith Cooper, apparently hinges on a basic question: Was the money that co-owner Hilda Staples and her husband secured for the restaurant a gift or a loan?
The Coopers have tried repeatedly to have the lawsuit dismissed, saying there was no written agreement between the partners over the money. But D.C. Superior Court Judge Anthony C. Epstein declined to dismiss the case this month, noting that Rogue 24 made monthly payments on the debt and listed the loan on its financial statements.
“By carrying the loan on its books and making some payments, Rogue 24’s . . . performance arguably constitutes ‘unequivocal evidence’ of the agreement between Ms. Staples and Rogue 24 regarding repayment of the loan,” Epstein wrote in his Dec. 4 ruling.
The case now appears to be headed toward a trial next year.
According to the judge’s ruling, which draws on statements from Staples’s previously filed complaints, the Coopers had first tried to secure a loan on their own but were rejected. With the Coopers’ approval, Staples and her husband, venture capitalist Jonathan Staples, secured a personal loan from Frederick County Bank in August 2011, with a maturity date set for a year later.
“The funds from the loan were provided to and used to benefit Rogue 24,” Epstein says in his ruling.
Rogue 24 made interest payments on the loan directly to the bank, according to the ruling, but when the loan came due in August 2012, the Stapleses had to seek extensions. Then in April, Hilda and Jonathan Staples secured another loan from Woodsboro Bank to avoid defaulting on the original loan. The couple “has made payments on the new loan but has not received any reimbursement from Rogue 24 or the Coopers,” the ruling notes.
This is an unusual case, explains Nathan Oman, a professor at the College of William & Mary Law School. Under an old law called the statute of frauds, sales or transactions of this size or magnitude typically are required to have written contracts “or they’re not legally enforceable,” Oman says.
“It’s very rare, just as a practical matter, that you would have a contract for an amount that large, $300,000, where they wouldn’t put it writing,” he adds.
There are, however, exceptions to the statute. One is the presence of other written documents that might indicate the existence of a contract, says Oman, who once worked for the Sidley Austin firm in its K Street offices in Washington. Another exception is that once a party starts performing his or her obligations under an oral agreement, “they’re acting as though they’re in a contract,” Oman adds.
This is not the first time Hilda Staples has worked with a well-known chef. A former PR executive, she has launched a second career financing and helping to manage high-profile restaurants. Staples collaborates with celebrity chefs Bryan Voltaggio and Mike Isabella on their projects, such as Voltaggio’s fine-dining restaurant, Volt, in Frederick and Isabella’s more casual Italian concept, Graffiato, in Chinatown.
Cooper declined to comment on the suit or his relationship with Staples, but Isabella said he has found Staples to be invaluable since he launched Graffiato in 2011.
“She helped to raise investment funds, push through permitting and manage all the vendors and contracts to make sure we stayed on track,” Isabella said in an e-mail statement. “Those are the things most people never see, but she does very well. To this day, she reviews the books and makes sure everything is still in line.”
Staples also declined to comment on the lawsuit or her relationship with the Coopers, other than to praise the chef. “R.J.’s a great guy and a fantastic chef,” says Staples, who remains a partner in the restaurant. The lawsuit, she added, “has nothing to do with him as a chef.”
Cooper will have to wait on the outcome of this case, but he recently got closure on another lawsuit. Last month, Oregon Brewing, the craft-beer giant behind Rogue-branded ales and restaurants, settled its trademark infringement lawsuit against Cooper and Rogue 24.
Even though Rogue 24 was named for a tasting menu that Cooper introduced at Vidalia, where the owner quipped that his chef had “gone rogue,” Oregon Brewing alleged that the name could cause confusion among customers, who might think the restaurant was aligned with the brewery. Cooper says he has agreed to alter his logo, which features the name “Rogue” along with two vertical and four horizontal bars that visually represent “24,” the number of courses offered on the chef’s signature tasting menu.
The chef says he has at least 18 months to change the logo on his materials, including the signs outside his restaurant. The new logo can still feature the Rogue name, Cooper says, but it must also include the number 24 along with the vertical and horizontal bars.
An attorney for Oregon Brewing declined to comment on the settlement.
Cooper says he doesn’t know how much the trademark infringement lawsuit, including the future logo changes, has cost him. “It’s a small business,” he says about Rogue 24. “A dollar is too much.” Nor is he familiar with all of the details of the settlement; the chef says he doesn’t know, for example, whether he has to surrender the domain name for his Web site, www.rogue24.com, as demanded by Oregon Brewing in its original lawsuit.
The attorneys representing Cooper and Rogue 24 said the terms of the settlement are confidential.
The chef does know why he decided to give in to the large craft brewer. “Typically, I like a good fight,” says Cooper. “But it’s a business. Do I want to put the business in jeopardy over a street sign, which is probably one of the most brilliant logos? . . . Or do I want to keep my employees employed and have a long future?”