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Brothers Petroleum, LLC v. Wagners Chef, LLC

United States District Court, E.D. Louisiana

August 30, 2017


         SECTION: “J”(1)

          ORDER & REASONS


         Before the Court is a Motion to Stay Action (Rec. Doc. 3) filed by the Federal Deposit Insurance Corporation (“FDIC”), as receiver for First NBC Bank, and an opposition (Rec. Doc. 5) filed by Plaintiff, Brothers Petroleum, LLC (“Brothers Petroleum”). Having considered the motion and legal memoranda, the record, and the applicable law, the Court finds that the motion should be GRANTED.


         This litigation arises from a contract dispute between Brothers Petroleum, a motor fuel distributor, and Defendant Wagners Chef, LLC (“Wagners Chef”), the operator of a gasoline/convenience store located on 4301 Louisa Street, New Orleans, Louisiana (the “Property”). (Rec. Doc. 3-3 at 3.) The Contract between Brother Petroleum and Wagners Chef (the “Contract”) allegedly provides that Brothers Petroleum has the exclusive right to sell Exxon branded motor fuel at the Store.[1](Rec. Doc. 3-3 at 3.)

         In July 2014, Wagners Chef filed suit against Brothers Petroleum in state court seeking a declaration that Wagners Chef was not bound by the Contract. (Rec. Doc. 3-3 at 3). On November 7, 2015, the Louisiana Fourth Circuit Court of Appeals declared the Contract was binding on Wagners Chef. In May 2016, Brothers obtained a judgment finding Wagners Chef in breach of the Contract and ordering specific performance by Wagners Chef. (Rec. Doc. 3-3 at 3,4.) Nonetheless, Brothers Petroleum claims that Wagners Chef continuously refused to abide by the Contract.

         Wagners Chef leased the Property from owner Wagner World, LLC (“Wagner World”) during the time Wagners Chef operated the convenience store/gas station. The lease allegedly “extended through February, 2022 with a seven (7) year option to purchase thereafter.” However, on July 8, 2016, Wagners Chef cancelled its lease. (Rec. Doc. 5 at 3.) Brothers Petroleum alleges that the lease was Wagners Chef’s “single most valuable asset” because it operated its business from the Property, its operational licenses and permits relied on the lease, and the lease contained an option to purchase.

         On the same day as the lease cancellation, Jadallah Enterprises, LLC (“Jadallah Enterprises”), purchased the Property from Wagner World and then leased it to Ahmed 1, LLC (“Ahmed 1”). First NBC Bank (“First NBC”) allegedly provided a multiple indebtedness mortgage to fund Jadallah Enterprise’s purchase of the Property and Ahmed 1 executed an assignment of rents in favor of First NBC as security. Jadallad Saed is allegedly the sole owner of Wagners Chef, Ahmed 1, and Jadallah Enterprises.

         On November 15, 2016, Wagners Chef allegedly advised Brothers Petroleum that it sold all of its assets to Empire Express, LLC (“Empire Express”). Subsequently, Empire Express allegedly subleased the Property to Ahmed 1.

         On December 21, 2016, Brothers Petroleum filed a revocatory action in state court seeking to negate Wagners Chef’s lease cancellation, the sale of the Property to Jadallah Enterprises, the lease to Ahmed 1, and the sale of Wagners Chef’s assets to Empire Express. Brothers Petroleum alleges that the cancellation of the lease and the transfers of the Property caused or increased the insolvency of Wagners Chef to the detriment of Brothers Petroleum. (Rec. Doc. 3-3 at 7.) Further, Brothers Petroleum claims that it is entitled to a judgment “annulling” both the multiple indebtedness mortgage and the assignment of rents because First NBC knew or should have known that these transactions would cause Wagners Chef to breach its Contract with Brothers Petroleum and increase the insolvency of Wagners Chef. (Rec. Doc. 3-3 at 9.) Brothers Petroleum also seeks damages from unfair trade practices, or alternatively, unjust enrichment against various Defendants, including First NBC.[2]

         On April 28, 2017, First NBC was declared insolvent and the FDIC was appointed as receiver of First NBC. The FDIC removed this case from state court on May 30, 2017. On July 17, 2017, the FDIC moved for a stay of these proceedings until it can complete its administrative review. (Rec. Doc. 3-1 at 1.)


         The FDIC argues that Brothers Petroleum must first exhaust its administrative remedies before proceeding in the instant case. (Rec. Doc. 3-1 at 3.) Because the administrative process can take 180 days or more, the FDIC requests a stay for 180 days. (Rec. Doc. 3-1 at 5.) However, alternatively, the FDIC states that it is legally entitled to at least a 90-day stay pursuant to 12 U.S.C. § 1821(d)(12)(B). Brothers ...

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