United States District Court, M.D. Louisiana
RULING AND ORDER
A. JACKSON CHIEF UNITED STATES DISTRICT JUGDE.
the Court is Defendant Grandbridge Real Estate Capital
LLC's ("Grandbridge") Motion to Certify
Interlocutory Review and Grant a Stay in Proceedings (Doc.
187). Plaintiff River House Partners, LLC ("River
House") opposes the motion. (Doc. 204). Grandbridge
filed a Reply. (Doc. 227). 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).
August 31, 2017, this Court issued an order denying
Grandbridge's Motion for Summary Judgment, finding that
the Louisiana Credit Agreement Statute ("LCAS") did
not operate to bar River House's Claims. (Doc. 173).
Grandbridge seeks to have that ruling certified for
interlocutory appeal pursuant to 28 U.S.C. § 1292(b).
certify a ruling for interlocutory appeal, "the court
must find that the interlocutory decision (1) involves a
controlling question of law as to which (2) there is a
substantial ground for difference of opinion and (3) that an
immediate appeal from the order may materially advance the
ultimate termination of the litigation." La.
Generating, L. L. C. v. III. Union Ins. Co., Nos.
10-cv-516-JJB-SCR, 10-cv-835-JJB-DLD, 2012 WL 1752685, at *1
(M.D. La. May 16, 2012) (citing § 1292(b)). The Fifth
Circuit strictly construes the requirements of Section
1292(b). Ala. Labor-Council v. Alabama, 453 F.2d
922, 924 (5th Cir. 1972). "[Resolution of an issue need
not necessarily terminate an action in order to be
controlling .... Whether an issue of law is controlling
usually 'hinges upon its potential to have some impact on
the course of the litigation.'" United States v.
La. Generating L.L.C., No. 09-cv-100-JJB, 2012 WL
4588437, at *1 (M.D. La. Oct. 2, 2012) (internal citations
omitted). A substantial ground for difference of opinion
"usually only arises out of a genuine doubt as to the
correct applicable legal standard relied on in the
order." Prop. One, Inc. v. U.S. Agencies,
L.L.C., 830 F.Supp.2d 170, 182-83 (M. D. La. 2011).
seeks review of three issues: (1) whether the LCAS may
prohibit a claim for breach of fiduciary duty against a
mortgage lender that is the wholly-owned subsidiary of a
bank; (2) whether the LCAS may prohibit the breach of
contract and negligence claims of a would-be borrower; and
(3) whether a loan application can serve as an agency
agreement as a matter of Louisiana law. (Doc. 187 at p. 1).
First, the Court notes that Grandbridge is not required to
identify the precise questions for which it seeks review, as
district courts do not certify "questions" for the
court of appeals upon the grant of a § 1292(b) motion.
See Linton v. Shell Oil Co., 563 F.3d 556, 557 (5th
Cir. 2009) ("[S]ection 1292(b) authorizes certification
of orders for interlocutory appeal, not certification of
It is a
close issue whether the requested appeal involves a
"controlling question of law." See §
1292(b). Grandbridge seeks review of three distinct legal
questions, none of which will terminate the litigation. Even
so, the legal questions all have major implications for
Grandbridge's potential liability. However, the answer to
at least two of those questions depend on fact-specific
issues of contract interpretation that have yet to be fully
developed at trial.
courts have determined that the LCAS applies to bar fiduciary
duty claims against institutions not squarely covered under
Louisiana Revised Statutes section 6:1124. See e.g.,
Westside-Marrero Jeep Eagle, Inc. v. Chrysler Corp., 56
F.Supp.2d 694, 703 (E.D. La. 1999) (dismissing fiduciary duty
claims against a car manufacturer's financial subsidiary
based on the LCAS). However, this Court considered those
other decisions and rejected their rulings, finding that the
cases were distinguishable. (See Doc. 173 at pp. 5-6).
Disagreement with the district court's ruling is
insufficient to establish a substantial ground for a
difference of opinion. Ryan v. Flowserve Corp., 444
F.Supp.2d 718, 724 (N. D. Tex. 2006).
this Court cannot conclude that "an immediate appeal
from the order may materially advance the ultimate
termination of the litigation." 28 U.S.C. §
1292(b). Discovery in this case has been completed and the
parties are prepared for trial. Importantly,
Grandbridge's ultimate liability will turn not solely on
the applicability of the LCAS, but also on factual
determinations that have yet to be made. At this stage in the
litigation, the best way for the Court to ensure the ultimate
termination of this litigation is by developing a full
factual record at trial, so that any appeal will have the
benefit of a complete record.