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Beary v. Deese

United States District Court, E.D. Louisiana

October 20, 2017

W. CHRISTOPHER BEARY
v.
DAVID DEESE, et al.

         SECTION A(5)

          ORDER AND REASONS

          JAY C. ZAINEY, UNITED STATES DISTRICT JUDGE

         Before the Court is a Motion for Summary Judgment (Rec. Doc. 20) filed by Defendants: David W. Deese (“Deese”), Quinco Electrical, Inc., Quinco Electrical of Dallas, Inc., Quinco Electrical of Georgia, Inc., Quinco Electrical of North Carolina, Inc., and Quinco Services, Inc. (collectively referred to as the “Quinco Corporations”). Plaintiff W. Christopher Beary opposes this motion (Rec. Doc. 23) and Defendants have replied (Rec. Doc. 30). The motion, set for submission on September 20, 2017, is before the Court on the briefs without oral argument. This matter is set as a bench trial beginning on December 4, 2017 at 9:30 a.m. Having considered the motion and memoranda of counsel, the record, and the applicable law, the Court finds that the Defendants' motion should be GRANTED IN PART and DENIED IN PART for the reasons set forth below.

         I. Background

         Defendant David W. Deese is domiciled and resides in Orlando, Florida. (Rec. Doc. 1, p. 2). He is the sole shareholder, president, and chairman of the board of Quinco Electrical, Inc., Quinco Electrical of Dallas, Inc., Quinco Electrical of Georgia, Inc., Quinco Electrical of North Carolina, Inc., and Quinco Services, Inc. The Quinco Corporations are in the business of electrical contracting with operations being directed from Quinco Electrical Inc.'s facility in Winter Park, Florida.

         Plaintiff is a citizen of Louisiana. Plaintiff alleges he learned that Deese was offering to sell the Quinco Corporations around the start of 2016. The parties then negotiated for several months. On June 2, 2016, Deese signed a Letter of Intent (“LOI”) setting forth the terms concerning the sale of the Quinco Corporations' assets to Plaintiff.[1] Defendants contend that the June 2, 2016 LOI superseded all prior written agreements between the parties and is the only effective written agreement pertaining to the sale of the Quinco Corporations' assests. (Rec. Doc. 20-1, p. 3). Among other provisions, the June 2, 2016 LOI provided that the buyer would pay to seller's counsel, to be held in trust, a deposit of $30, 000. Id. The June 2, 2016 LOI also provided for a Due Diligence Period. During this period, Plaintiff could elect not to proceed with the sale and, upon such a decision by Plaintiff, the $30, 000 deposit would be refunded. (Rec. Doc. 20-1, p. 5). The Due Diligence clause also stated that Defendants and Defendants' employees “shall fully cooperate with [Plaintiff] and its agents during the Due Diligence Period and shall grant full access to the Property, all leased locations, and each Seller's contracts, books and records.” (Rec. Doc. 20-8, p. 2). The June 2, 2016 LOI also contains a Good Faith clause whereby the parties were to negotiate the Closing Documents in good faith. Id. Finally, Defendants note that the June 2, 2016 LOI contains an “Entire Agreement” clause, which provides:

Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto and supersedes any and all prior negotiations and agreements, implied or expressed, and oral or written in respect to the subject matter hereof unless such prior written agreements are expressly referred to herein but only to the extent of such reference. This Agreement may only be amended by written instrument executed by Buyer and Sellers. Id.

         Plaintiff disagrees with Defendants' contention that the June 2, 2016 LOI is the only effective agreement between the parties. Plaintiff argues that the June 2, 2016 LOI was amended on July 20, 2016.[2] On July 18, 2016, Plaintiff informed Deese that the Plaintiff's bank would not be able to finance Plaintiff's purchase of the Quinco Corporations under the terms of the June 2, 2016 LOI. (Rec. Doc. 23, p. 4). Plaintiff proposed new terms to Deese on July 19, 2016. Later that day Deese countered with terms on which he was willing to proceed with the transaction. Id. The two parties went back and forth until Deese's counsel, Trevor Brewer (“Brewer”), sent Plaintiff a reply email that expressed Deese's counter to Plaintiff's new terms.[3] Id. at p. 5. The email also stated, “Since David [Deese]'s willing to give on all other areas, he'd like you to meet him on this one.” Id. In response, Plaintiff wrote, “I agree, I will tell the bank and advise.” Id. at 6.

         Defendants maintain that the email exchange between Plaintiff and Brewer did not amend the June 2, 2016 LOI because it did not involve a written instrument executed by the parties in accordance with the “Entire Agreement” provision of the June 2, 2016 LOI. (Rec. Doc. 20-1, p. 5), supra p. 2. On the other hand, Plaintiff maintains that the email exchange resulted in an amendment to the June 2, 2016 LOI.

         Thereafter, from around July 26, 2016 to August 12, 2016, the parties continued negotiations, but were unable to agree on new terms. Plaintiff maintains that Deese would orally agree to new terms then refuse to sign any amended LOI evidencing the new terms. Plaintiff identifies these refusals as six different “Repudiation of Agreed Terms.” (Rec. Doc. 23, pp. 7-12). On the other hand, Defendants maintain that these proposed amendments were not executed by Defendant or Defendants' counsel and therefore expired on their own terms. (Rec. Doc. 20-1, p. 6). Plaintiff also alleges Deese and his employees purposefully failed to comply with numerous due diligence requests in accordance with the “Due Diligence” provision of the June 2, 2012 LOI.[4]

         On August 12, 2016, Plaintiff's counsel, Jeffrey Oakes (“Oakes”), sent Brewer a letter stating that Defendants were being placed in default. Plaintiff contends that Defendants failed to cooperate with Plaintiff's due diligence requests and were therefore in breach of the July 20, 2016 LOI. (Rec. Doc. 23, pp. 12-16). Soon thereafter, Plaintiff directed Oakes to terminate the agreement and to not proceed with the purchase of the Quinco Corporations.

         On October 21, 2016, Plaintiff filed suit against Defendants claiming breach of contract for failing to cooperate with due diligence requests, failing to negotiate the closing documents in good faith as required by the July 20, 2016 LOI, and for repudiating the July 20, 2016 LOI. Plaintiff also alleges claims of fraud and violation of the Florida Deceptive and Unfair Trade Practices Act. (Rec. Doc. 1).

         II. Jurisdiction

         This Court has subject matter jurisdiction of this civil action pursuant to 28 U.S.C. § 1332. The Plaintiff is a citizen of Louisiana. The Defendants are citizens of Florida, Georgia, North Carolina, and Texas. The Court finds that the amount in controversy exceeds $75, 000.

         III. Legal Standard

         Defendants seek summary judgment in their favor arguing the following: (1) Plaintiff exercised his right under the contract to terminate the agreement during the Due Diligence Period; (2) alternatively, there was a non-binding preliminary agreement between the parties. Also, the July 20, 2016 email exchange between the parties did not amend the terms of any agreement between the parties; and (3) Plaintiff's fraud claim and claim under the Florida Deceptive and Unfair Trade Practices are both duplicative of the Plaintiff's breach of contract claim and, therefore, should be dismissed as well. (Rec. Doc. 20-1, pp. 1-2).

         Summary judgment is appropriate only if “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, ” when viewed in the light most favorable to the non-movant, “show that there is no genuine issue as to any material fact.” TIG Ins. Co. v. Sedgwick James, 276 F.3d 754, 759 (5th Cir. 2002) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986)). A dispute about a material fact is “genuine” if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Id. (citing Anderson, 477 U.S. at 248). The court must draw all justifiable inferences in favor of the non-moving party. Id. (citing Anderson, 477 U.S. at 255).

         Once the moving party has initially shown “that there is an absence of evidence to support the non-moving party's cause, ” the non-movant must come forward with “specific facts” showing a genuine factual issue for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986) (citing Fed.R.Civ.P. 56(e); Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986)). Conclusional allegations and denials, speculation, improbable inferences, unsubstantiated assertions, and legalistic argumentation do not adequately substitute for specific facts showing a genuine issue for trial. Id. (citing SEC v. Recile, 10 F.3d 1093, 1097 (5th Cir. 1993)).

         IV. Law and Analysis

         Defendants' current motion seeks to dismiss Plaintiff's claims on three grounds. First, Defendants contend that Plaintiff's breach of contract claim should be dismissed because Plaintiff exercised his option to terminate the June 2, 2016 LOI. (Rec. Doc. 20-1, p. 8). Alternatively, Defendants argue that partial summary judgment should be granted because there was no binding final agreement between the parties, but rather only a non-binding preliminary agreement between the parties. Lastly, Defendants argue Plaintiff's fraud claim ...


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