United States District Court, M.D. Louisiana
RULING AND ORDER
A. JACKSON, CHIEF JUDGE UNITED STATES DISTRICT COURT.
the Court is the Motion for Summary Judgment (Doc.
91) filed by Defendant Grandbridge Real Estate
Capital LLC ("Grandbridge") against Plaintiff River
House Partners, LLC ("River House"). Pursuant to
Federal Rule of Civil Procedure 56, Grandbridge seeks an
order dismissing the remaining claims against it for breach
of fiduciary duty, breach of contract, and
negligence. Jurisdiction is proper under 28 U.S.C.
§ 1332(a)(1). For the reasons that follow,
Grandbridge's motion is DENIED.
House initiated this action over the alleged failure of
Grandbridge to secure a loan insured by the Department of
Housing and Urban Development ("HUD") for
construction and permanent financing of a multi-family
commercial and residential development in Baton Rouge. (Doc.
1-2 at p. 2). River House was founded in 2009 in order to
acquire and develop a parcel of land in Baton Rouge into a
mixed- use development. (Doc. 98-1 at ¶ 10). River House
engaged Grandbridge to secure a HUD-insured loan. (Doc. 98-1
at ¶ 11). According to River House, a May 2009 written
lending application agreement ("the Agreement")
bound Grandbridge to work on River House's behalf to
secure the loan. (Doc. 1-2 at p. 2). In January 2010,
Grandbridge submitted a pre-application package to HUD. (Doc.
98-1 at ¶ 24). In 2012, HUD issued a Conditional
Commitment for mortgage insurance for the River House
project. (Doc. 98-1 at ¶ 34). River House Accepted the
HUD Conditional Commitment in November of 2012. (Doc. 98-1 at
¶38). After a number of extensions to close the
transaction were granted, HUD issued its final extension that
ran through December 11, 2013. (Doc. 112-2 at ¶¶
45, 52). On February 27, 2014, HUD sent a letter to
Grandbridge terminating the Conditional Commitment. (Doc.
98-1 at 56).
House argues that Grandbridge lost a firm commitment made by
HUD to insure a loan for the development due to its
submission of inaccurate and untimely materials, and its
repeated failure to act. (Doc. 112 at pp. 2-3) As a result,
River House asserts that it had to secure a conventional loan
for the project on terms significantly less favorable than
the HUD-guaranteed loan. (Doc. 1-2 at p. 2). It also alleges
that it suffered construction delays and increased costs.
(Doc. 1-2 at p. 2).
House initially filed suit in the Nineteenth Judicial
District Court for the Parish of East Baton Rouge. (Doc. 1-2
at p. 2). That action was removed to this Court. (Doc. 1 at
p. 1). It asserted claims for breach of contract, bad faith
breach of contract, negligence, breach of fiduciary duty, and
specific performance. (Doc. 1-2 at pp. 9-11). This Court
granted in part and denied in part a motion to dismiss (Doc.
10), dismissing the bad faith breach of contract and specific
performance claims. (Doc. 27). Defendants filed this Motion
for Summary Judgment (Doc. 91) seeking dismissal of the
to the Federal Rules of Civil Procedure, "[t]he court
shall grant summary judgment if the movant shows that there
is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law."
Fed.R.Civ.P. 56(a). In determining whether the movant is
entitled to summary judgment, the court views the facts in
the light most favorable to the non-raovant and draws all
reasonable inferences in the non-movant's favor.
Coleman v. Hous. Indep. Sch. Dist., 113 F.3d 528,
533 (5th Cir. 1997).
motion for summary judgment is filed, the non-movant
"must set forth specific facts showing there is a
genuine issue for trial." Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 250 (1986) (internal citations
omitted). "A genuine issue of material fact exists when
the evidence is such that a reasonable jury could return a
verdict for the non-moving party." Austin v. Kroger
Texas, L.P., 846 F.3d 326, 328 (5th Cir. 2017) (quoting
Gates v. Tex. Dep't of Protective & Regulatory
Servs., 537 F.3d 404, 417 (5th Cir. 2008)). At this
stage, however, the court does not evaluate the credibility
of witnesses, weigh the evidence, or resolve factual
disputes. Int'l Shortstop, Inc. v. Rally's,
Inc., 939 F.2d 1257, 1263 (5th Cir. 1991).
other hand, the non-movant's burden is not satisfied by
some metaphysical doubt as to the material facts, or by
conclusory allegations, unsubstantiated assertions, or a mere
scintilla of evidence. Little v. Liquid Air Corp.,
37 F.3d 1069, 1075 (5th Cir. 1994) (internal quotations
omitted). Summary judgment is appropriate if the non-movant
"fails to make a showing sufficient to establish the
existence of an element essential to that party's
case." Celotex Corp. v. Catrett, 477 U.S. 317,
322 (1986). In other words, summary judgment will lie only
"if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with
affidavits if any, show that there is no genuine issue as to
any material fact, and that the moving party is entitled to
judgment as a matter of law." Sherman u.
Hallbauer, 455 F.2d 1236, 1241 (5th Cir. 1972).
Breach of Fiduciary Duty
elements for breach of fiduciary duty in Louisiana are
"proof of fraud, breach of trust, or an action outside
the limits of the fiduciary's authority, "
Gerdes v, Estate of Cush, 958 F.2d 201, 205 (5th
Cir. 1992), In order "for a fiduciary duty to exist,
there must be a fiduciary relationship between the
parties." Scheffler v. Adams & Reese, LLP,
2006-1774 (La. 2/22/07); 950 So.2d 641, 647.
core dispute in the motion sub judice is whether a
fiduciary relationship existed. Grandbridge argues that
summary judgment is appropriate on the fiduciary duty claim
because the Louisiana Credit Agreement Statute
("LCAS") bars River House's claims. (Doc. 98 at
pp. 10-11). Alternatively, Grandbridge insists that
notwithstanding the LCAS, there is no evidence that River
House authorized Grandbridge to act as its agent, and
therefore, no fiduciary duty was created. (Doc. 98 at pp.
13-14). River House counters that the statute does not apply
to Grandbridge because it does not fit the definition of a
"financial institution" under the LCAS. (Doc. 112
at pp. 12-13). River House also insists that regardless of
the LCAS's applicability, the Agreement was a written
agency contract. (Doc. 112 at pp. 14-15).
initial matter, this court determines that the LCAS does not
apply to River House's breach of fiduciary duty claim.
The LCAS states, in the pertinent part:
No financial institution or officer or employee thereof shall
be deemed or implied to be acting as a fiduciary, or have a
fiduciary obligation or responsibility to its customers or to
third parties . . . unless there is a written agency or trust
agreement under which the financial institution ...