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Burgers v. Bickford

United States District Court, E.D. Louisiana

April 15, 2015

WILHELMUS BURGERS
v.
KENNETH W. BICKFORD, ET AL., Section:

ORDER AND REASONS

JAY C. ZAINEY, District Judge.

Before the Court is a Motion for Partial Summary Judgment to Enforce Promissory Notes and for Summary Judgment on Defendants' Counterclaims (Rec. Doc. 100) filed by Plaintiff Wilhelmus Burgers. Defendants NOKWB, LLC, NOCAB, LLC, NODAB, LLC, Chappapeela Development Corporation, and French Creek Development, LLC oppose the motion. Also before the Court is a Motion for Summary Judgment on Counterclaims of Defendants GJFB, LLC and GJBUF, LLC (Rec. Doc. 101) filed by Plaintiff Wilhelmus Burgers. Defendants GJFB, LLC and GJBUF, LLC oppose the motion. The motions, set for submission on March 11, 2015, are before the Court on the briefs without oral argument. For the reasons that follow, the Motion for Partial Summary Judgment to Enforce Promissory Notes and for Summary Judgment on Defendants' Counterclaims (Rec. Doc. 100) is GRANTED IN PART and DENIED IN PART. The Motion for Summary Judgment on Counterclaims of Defendants GJFB, LLC and GJBUF, LLC (Rec. Doc. 101) is GRANTED.

I. BACKGROUND[1]

Plaintiff alleges that in 2007, Defendants Kenneth Bickford ("Bickford") and William Hindman ("Hindman") approached him seeking loans to finance the construction of a mixed-use residential development project in Tangipahoa Parish. Plaintiff alleges that Bickford and Hindman informed Plaintiff that Bickford and members of Bickford's immediate family owned the land upon which the project would be constructed and that Hindman was an experienced real estate developer who would manage the project.

In 2009, Plaintiff entered into a formal agreement to fund the construction of the project. According to Plaintiff, this agreement was represented in two related sets of documents - three identical promissory notes and three identical "Master Agreement, Development and Term Loan Agreements" executed between Plaintiff and three LLCs (NOKWB, LLC; NOCAB, LLC; and NODAB, LLC), each controlled separately by Bickford and his two brothers ("the NO LLCs"). Plaintiff understood the project would be developed in several phases, including an "Organizational Phase" to be completed in fifteen (15) months at a cost not to exceed $500, 000. Following this "Organizational Phase, " actual construction was to begin during "Phase I" of the project at an anticipated cost of $1, 300, 000. Plaintiff alleges that Bickford, Hindman, and Mason[2] sought a total loan contribution from him of $900, 000, representing the full cost of the "Organizational Phase" and a portion of "Phase I" of the project.

Plaintiff alleges that the contracting parties agreed that Plaintiff's loan would be divided and separately allocated to the NO LLCs. Plaintiff claims that the NO LLCs were to transfer title to the 21.41 acres of land (to be developed during Phase I) to Defendant Chappapeela Development Corporation ("Chappapeela") upon execution of Plaintiff's loans. Ostensibly, Chappapeela was established as a corporate vehicle facilitating development of the project.

Plaintiff also alleges that in 2010 Defendants decided to move the project to land other than the 21.41 acres on which he had a multiple indebtedness mortgage with Chappapeela, thus undermining his security interest in the loans he had made. He further contends that he has a security agreement with Chappapeela in "all general intangibles of the project, " including options that Defendants allegedly used to induce him to enter into these funding agreements. He states that these options, executed by GJFB, LLC and GJBUF, LLC[3] ("GJFB and GJBUF") in favor of the NO LLCs, would have allowed the project to expand onto adjacent land, but that the NO LLCs have since entered a partial cancellation of these options in favor of GJFB and GJBUF affecting a large portion of the land.

Plaintiff claims that as of November 2010 he had disbursed $384, 000.00 to the project and was repeatedly assured that the project was progressing as planned. However, Plaintiff alleges that his review of the project's records in April 2012 revealed misappropriation of the project's assets, including the funds he had loaned for the project. Plaintiff claims that Defendants' actions therein directly contradicted prior verbal representations made to him, as well as the formal documents and agreements he had relied upon in contributing funds to the project.

On August 3, 2012, Plaintiff filed suit against Hindman, Bickford, the NO LLCs, as well as various legal entities formed to begin development of the property. Plaintiff alleges causes of action for breach of contract, unjust enrichment, and violations of the Louisiana Unfair Trade Practices Act ("LUTPA").

On June 26, 2013, by amended complaint, Plaintiff joined GJFB and GJBUF as additional defendants, alleging causes of action against these parties for unjust enrichment[4] and violations of LUTPA and seeking to have the options declared as binding. Plaintiff also brought a revocatory action seeking rescission of the cancellation of options to purchase certain land adjacent to the 21.41 acre plot. Furthermore, Plaintiff filed a Notice of Pendency of Action ("Lis Pendens") in Tangipahoa Parish covering the land described in the options to purchase executed by GJFB and GJBUF in favor of the NO LLCs.

In the instant motions, Plaintiff seeks summary judgment on the enforcement of its promissory notes entered into with the NO LLCs, arguing that there is no disputed issue of material fact as to the amount due or the maturing of the notes. Plaintiff also seeks summary judgment on the counterclaims of Defendants NO LLCs, Chappapeela, and French Creek, as well as those of GJFB and GJBUF.

II. APPLICABLE LAW

Summary judgment is appropriate only if, "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, " when viewed in the light most favorable to the nonmovants, "show that there is no genuine issue as to any material fact."[5] A dispute about a material fact is "genuine" if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.[6] Once the moving party has initially shown "that there is an absence of evidence to support the nonmoving party's cause, "[7] the nonmovants must come forward with "specific facts" showing a genuine factual issue for trial.[8] Conclusory allegations and denials, speculation, improbable inferences, unsubstantiated assertions, and legalistic argumentation do not adequately substitute for specific facts showing a genuine issue for trial.[9]

III. DISCUSSION

a. Motion for Partial Summary Judgment to Enforce Promissory Notes (no. 100)

Plaintiff alleges that the principal balance on the promissory notes executed between him and each of the NO LLCs on September 30, 2009 became due on September 30, 2014. He claims that he has paid out a total of $384, 000, and that due to the terms of the promissory notes, he is now owed this amount ($384, 000 or $128, 000 per LLC) plus 10% attorneys' fees ($38, 400 or $12, 800 per LLC).

In response, the NO LLCs do not argue the amount that Plaintiff has contributed towards the project[10] nor the terms of the promissory notes.[11] Instead, they argue that Plaintiff cannot show that the contributed funds, other than the initial $50, 000, were actually received by the NO LLCs.[12] They ...


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