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MCMG Capital Advisors Inc. v. Food-N-Fun Inc.

United States District Court, W.D. Louisiana, Lafayette Division

January 30, 2018




         Currently pending is the motion for summary judgment [Rec. Doc. 30], which was filed by defendant, Todd Street. The motion is opposed and oral argument was held on January 25, 2018. Considering the evidence, the law, and the arguments of the parties, and for the reasons fully explained below, this Court grants the motion and dismisses the plaintiff's claims against Todd Street with prejudice.


         On February 12, 2016, the plaintiff, MCMG Capital Advisors, Inc. (“MCMG”) entered into a Merger & Acquisition Financial Services Agreement (“Agreement”) with defendants Food-N-Fun, Inc. (“Food-N-Fun”) and Todd Street. In the Agreement, MCMG agreed to provide certain financial consulting as well as merger and acquisition advisory services for the sale of the equity and assets of Food-N-Fun. In exchange for these services, MCMG would be compensated with a transaction fee if a closing occurred during the term of the Agreement or if a closing occurred within fifteen months of the termination of the Agreement and the buyer was identified or had contact with MCMG, Food-N-Fun, or Todd Street during the term of the Agreement. Section 3.2 contains the Agreement's compensation provision, which states in pertinent part[1]:

“Seller and Company shall, jointly and severally, compensate Matrix for the Services in an amount equal to the sum of One Hundred Thousand Dollars ($100, 000), plus three percent (3.0%) of the Transaction Value up to and including Thirty Million Dollars ($30, 000, 000), plus four percent (4.0%) of all Transaction Value in excess of Thirty Million Dollars ($30, 000, 000) (the “Transaction Fee”)... The Transaction Fee of $100, 000 plus the commission percentage shall be paid at closing.” “... The Company acknowledges and agrees that, during the Term or as provided in Section 4 below, the compensation due Matrix shall be paid as provided in this Agreement whether or not any buyer has been introduced to the Company by Matrix.”

         Section 4 provides the Term of the Agreement, which states:

"This Agreement shall remain in full force and effect for a period of one hundred eighty days (180) from the execution date of this Agreement and shall continue thereafter for three (3) successive thirty (30) day renewal periods unless terminated by either Party, in writing, ten (10) days prior to the termination of the original term or any renewal period ("Term"). However, in the event a Closing occurs within fifteen (15) months following the date of termination of this Agreement and such transaction involves a Buyer which Matrix, Company or Seller had identified and had any contact with during the Term of this Agreement for the purpose of attempting to sell the equity or assets of the Company, or otherwise perform Matrix's obligations herein, then Company shall compensate Matrix under the same terms and conditions of this Agreement as if this Agreement were in full force and effect.”

         The Agreement expired by its own terms on or about November 11, 2016 and Food-N-Fun was sold to Retif Oil & Fuel, LLC, a buyer that the parties to the Agreement had contact with during the terms of the Agreement, on or about March 17, 2017. As a result, MCMG filed a complaint against the defendants, jointly and severally, for breach of contract, recovery of contractual attorney's fees, and to revoke the transfer of the proceeds of the sale of Food-N-Fun's assets to Todd Street. Then, Todd Street filed the present motion for summary judgment arguing that he is not obligated to compensate MCMG for a closing that occurs after the expiration of the Agreement.


         A. The Summary Judgment Standard

         Under Rule 56(a) of the Federal Rules of Civil Procedure, summary judgment is appropriate when there is no genuine dispute as to any material fact, and the moving party is entitled to judgment as a matter of law. A fact is material if proof of its existence or nonexistence might affect the outcome of the lawsuit under the applicable governing law.[2] A genuine issue of material fact exists if a reasonable jury could render a verdict for the nonmoving party.[3]

         The Court applies substantive state law in a diversity action.[4] In addition, Section 6.3 provides that the Agreement “shall be construed and enforced under the laws of the State of Louisiana.” Therefore, the Agreement will be interpreted in accordance with Louisiana law.

         In Louisiana, "contracts have the effect of law for the parties and the interpretation of a contract is the determination of the common intent of the parties."[5]"When the words of a contract are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties' intent."[6]In such cases, the meaning and intent of the parties to the written contract must be sought within the four corners of the instrument and cannot be explained or contradicted by parole evidence.[7] “Moreover, when a contract can be construed from the four corners of the instrument without looking to extrinsic evidence, the question of contractual interpretation is answered as a matter of law and summary judgment is appropriate.”[8]

         B. Interpretation ...

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