Gulf Coast Facilities Mgmt., LLC v. BG LNG Serv., LLC, Civil Action No. 09-3822

Decision Date08 September 2010
Docket NumberCivil Action No. 09-3822
Citation730 F.Supp.2d 552
PartiesGULF COAST FACILITIES MANAGEMENT, L.L.C. v. BG LNG SERVICES, L.L.C., BG North America, L.L.C., and BG Exploration America, Inc.
CourtU.S. District Court — Eastern District of Louisiana

Gladstone N. Jones, III, Catherine Elena Lasky, Lynn E. Swanson, Jones, Swanson, Huddell & Garrison, LLC, New Orleans, LA, for Plaintiff.

Phillip A. Wittmann, John Mark Fezio, Keith B. Hall, Stone, Pigman, Walther, Wittmann, LLC, New Orleans, LA, for Defendant.

ORDER AND REASONS

MARTIN L.C. FELDMAN, District Judge.

Before the Court are two motions: (1) a motion for summary judgment by BGLNG Services, L.L.C., BG North America, L.L.C., and BG Exploration America, Inc. (collectively, BG); and (2) Gulf Coast's motion for partial summary judgment. For the reasons that follow, the defendants' motion is GRANTED and the plaintiff's motion is DENIED.

Background

This breach of contract action arises out of an oral agreement in which Gulf Coast Facilities Management, L.L.C. contends that BG breached its obligation to pay 10 percent of all revenue and material benefits that Gulf Coast facilitated for BG, even after BG fired it.

For years BG has shipped liquefied natural gas through the Turnbasin at the Port of Lake Charles. In 2005 BG decided to lease about 80 acres of land surrounding the Port; BG did not need the land for its own operations, but it wanted to have some measure of control over what activities took place there. Because activities of other companies in the Turnbasin had interfered with BG's shipping, BG wished to sublease the property only to those tenants that could operate without hindering BG's access to the Turnbasin.1 Accordingly, BG took a leasehold interest in the 80 acres from Trunkline (a company that leased the property) and undertook to sublease that property.

BG worked with outside counsel, David Hunter, who provided a model form sublease to use in negotiating potential subleases. BG hired a maintenance company, TSI, but also decided to hire a property manager, who would be tasked with negotiating potential subleases with interested parties found by Trunkline, market the property to other potential sublessees, and collect rent.

Kent Morrison, a local attorney, learned through BG's general counsel, Bowe Daniels, who was a contact from law school, that BG was looking for a property manager; in February 2006 Morrison submitted a written proposal to BG. In the proposal, Morrison described Gulf Coast Facilities Management, LLC as a property management firm with "extensive experience managing and leasing port facilities similar to that held by BG"; that might or might not have been true. Gulf Coast, it has been suggested, was not formed until some six or seven months after the proposal to BG-in September 2006.

Although Morrison represented to BG that the people behind Gulf Coast had significant experience in commercial real estate and in the maritime and port facilities industry, Morrison himself had never before owned or managed any port properties.2 Morrison's colleague and high school friend, Nat Phillips, had some uncertain experience: Phillips worked part-time for an agriculture company and some of his duties related to port properties. He received his MBA from Tulane University in 2003 but apparently has only performed part-time work from the time he graduated from college in 1995.

After some back-and-forth between Howard Candelet (BG's Vice President ofOperations), Kent Morrison, and Nat Phillips, BG and Gulf Coast orally agreed that Gulf Coast would be compensated in exchange for certain property management services to be performed by Gulf Coast at the port property. The specific terms of the oral agreement are unsurprisingly disputed.3 It was generally agreed that Gulf Coast would help negotiate subleases, using as a model the lease form already provided by BG LNG's outside counsel. Gulf Coast would also help collect rent and identify additional sublessees. It is undisputed that Gulf Coast never did. Gulf Coast could evict non-paying sublessees, provided advice related to BG's interest in the Turnbasin, assisted BG and the Port with the negotiation of an access agreement for a third party, and secured and managed a mooring arrangement. At the very least, with regard to compensation, BG and Gulf Coast agreed that Gulf Coast would receive a 10 percent commission on rents collected; Gulf Coast was compensated in the same way each month regardless of which tasks it performed.4

Morrison performed most of the work that Gulf Coast did for BG; it is undisputed that whatever work he did for BG he did in his spare time from his work as a full-time attorney in a city law firm.

No one at BG ever inquired into whether Gulf Coast or its principals had a real estate license. In fact, neither Morrison nor Phillips had a real estate license at the time Gulf Coast was formed or while Gulf Coast was working for BG LNG.5

Using the model sublease form provided by BG LNG's outside counsel, Gulf Coast helped negotiate with potential sublessees already found by BG or Trunkline; someof those potential sublessees executed subleases from BG. Gulf Coast also handled the administrative tasks of receiving rent payments by mail, keeping track of whether the sublessees were current on their rent, and evicting non-paying tenants.

During the time that Gulf Coast was associated with BG, the revenue from the Turnbasin property increased impressively, from approximately $1,000 per month to more than $160,000 per month. According to Gulf Coast, BG's ability to offset the cost of its strategic goals in acquiring control of the Turnbasin was directly attributable to Gulf Coast's expertise.

At some point after Gulf Coast began working for BG, the parties tried unsuccessfully to negotiate a written contract to govern their relationship. BG provided Gulf Coast with a standard contract form or outline that BG used with its vendors and asked Gulf Coast to fill in the relevant terms. Consistent with the oral agreement, Gulf Coast filled in a provision in which it would be paid a 10 percent commission on rent paid to BG. But then Gulf Coast also included in the proposed written agreement that it be paid its 10 percent commission for the life of any sublease BG LNG entered during the time Gulf Coast served as property manager, as well as for the life of any renewals of those subleases. The parties never executed a written agreement.

In early March 2009, BG fired Gulf Coast.6 On June 11, 2009 Gulf Coast 7 sued BG LNG, BG North America, LLC, and BG Exploration America, Inc., asserting breach of the parties' oral agreement and unjust enrichment. Gulf Coast asserts that the parties agreed that it would be paid 10 percent of the gross revenue earned by BG from the rental of the property for the duration of each lease, and that it would also be compensated for "any other material benefits" negotiated by Gulf Coast on BG's behalf. Gulf Coast further asserts that, without Gulf Coast's management of BG's property, BG would not be receiving more than $170,000 a month or $2,040,000 annually in revenue over the life of the subleases it procured. BG filed an answer and counterclaim, asserting that (1) BG is entitled to recover $120,000 in rent Gulf Coast wrongfully retained after it collected rent on a lease in which BG was lessor and Seabulk was lessee; and (2) BG is entitled to recover any other funds unlawfully retained by Gulf Coast, or in excess of what is allowed under the law or facts, or relating to services that Gulf Coast did not properly perform. Gulf Coast then answered BG's counterclaim, and demanded a jury trial.

BG now moves for summary judgment, contending that the undisputed facts show that the plaintiff lacks a real estate license and that Louisiana law bars an unlicensed person from receiving compensation for real estate services. In its counterclaim, BG seeks a declaration that Gulf Coast is liable to return funds it received and retained for work it performed for BG without a license. Gulf Coast, for its part,seeks partial summary relief regarding the existence and terms of the oral agreement.

I. Standard for Summary Judgment

Federal Rule of Civil Procedure 56 instructs that summary judgment is proper if the record discloses no genuine issue as to any material fact such that the moving party is entitled to judgment as a matter of law. No genuine issue of fact exists if the record taken as a whole could not lead a rational trier of fact to find for the non-moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). A genuine issue of fact exists only "if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

The Court emphasizes that the mere argued existence of a factual dispute does not defeat an otherwise properly supported motion. See id. Therefore, "[i]f the evidence is merely colorable, or is not significantly probative," summary judgment is appropriate. Id. at 249-50, 106 S.Ct. 2505 (citations omitted). Summary judgment is also proper if the party opposing the motion fails to establish an essential element of his case. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In this regard, the non-moving party must do more than simply deny the allegations raised by the moving party. See Donaghey v. Ocean Drilling & Exploration Co., 974 F.2d 646, 649 (5th Cir.1992). Rather, he must come forward with competent evidence, such as affidavits or depositions, to buttress his claims. Id. Hearsay evidence and unsworn documents do not qualify as competent opposing evidence. Martin v. John W. Stone Oil Distrib., Inc., 819 F.2d 547, 549 (5th Cir.1987). Finally, in evaluating the summary judgment motion, the Court must read the facts in the...

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