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CFP New Orleans, LLC v. Judicial District Court Building Commission Orleans Parish

United States District Court, E.D. Louisiana

January 7, 2019

CFP NEW ORLEANS, LLC
v.
JUDICIAL DISTRICT COURT BUILDING COMMISSION ORLEANS PARISH ET AL.

         SECTION “H”

          FINDINGS OF FACT AND CONCLUSIONS OF LAW

          JANE TRICHE MILAZZO UNITED STATES DISTRICT JUDGE

         Plaintiff CFP New Orleans, LLC (“CFP”) filed this breach of contract action on October 13, 2016.[1] In its Complaint, Plaintiff sued the Orleans Parish Judicial District Court Building Commission (“JBC”), [2] a public corporation tasked with managing the construction of a new Civil District Courthouse in Orleans Parish; Judge Kern A. Reese, the JBC's chairman; and Judge Christopher Bruno, a member of the JBC.[3] The Complaint sought monetary damages from JBC for an alleged breach of a Professional Services Agreement (“Agreement”) that JBC entered into with CFP, a development firm, as part of a proposal to build a new courthouse.[4] CFP included among its claims one for “breach of an implied contract” against Judge Reese and one for intentional interference with contractual relations against Judge Bruno.[5] On September 7, 2017, all claims against Defendants Reese and Bruno were dismissed.[6] State law claims for breach of contract and suit on an open account remained pending against JBC. On May 3, 2018, a Motion for Summary Judgment by Defendant JBC was partially granted that dismissed CFP's claim “for the $467, 564.00 expended by Civic Development Collaborative . . . to obtain ‘site control' of the Canal Street and Cleveland Avenue immovable properties at issue here.”[7]

         This Court held a one-day bench trial on CFP's remaining breach of contract claim against JBC on September 21, 2018.[8] Having considered the evidence admitted at trial and the arguments of counsel, this Court makes the following findings of fact and conclusions of law. To the extent a finding of fact constitutes a conclusion of law, and vice versa, the Court adopts it as such.

         FINDINGS OF FACT

         1. Jurisdiction is based on diversity.

         2. On December 19, 2014, JBC entered into a Professional Services Agreement (“Agreement”) with CFP. The Agreement contains an Effective Date of February 18, 2014.[9]

         3. Under the Agreement, CFP agreed “to provide JBC a complete, turn-key array of Services required to plan, finance, construct, and equip the Facility for use by the current occupants of the Civil District Court Complex.”[10]

         4. “The Facility” referred to in the Agreement was a proposed new courthouse.

         5. The Agreement provides that CFP would perform its obligations under the contract in three distinct “phases.” The execution of the Agreement authorized CFP to perform the “Phase 1” services described in the Agreement. CFP needed JBC's authorization to proceed with Phase 2 and Phase 3 services.[11]

         6. JBC never authorized CFP to proceed with Phase 2 or Phase 3 services.

         7. Phase 1 services under the Agreement included obligations on CFP's part (a) to refine a project program outlining the development plans for the new courthouse; (b) to regularly meet with JBC during the planning phases of the project; (c) to develop financing plans for the project; and (d) to provide JBC with preliminary design proposals, construction cost estimates, and a preliminary project schedule.[12]

         8. Phase 1 of the Agreement also obligated both parties to “negotiate and enter into a definitive binding agreement for the purchase of the Property, on terms and conditions satisfactory to JBC in its sole discretion.”[13]

         9. The Agreement defines the “Property” as the “Parent Tract, ” which is further defined as “Square 370 in the First Municipal District of the City of New Orleans, bounded by Cleveland Avenue, South Robertson Street, Canal Street, and Villere Street (excluding the historic building on the corner of Cleveland Avenue and South Robertson Street).”[14]

         10. The parties failed to enter into a binding agreement for the purchase of the Property.

         11. The Agreement included a $500, 000 “Development Fee” for the performance of Phase 1 services. JBC was obligated to pay the first $250, 000 “upon review and approval by JBC of documentation, work product and other materials reasonably satisfactory to JBC of Phase 1 Services performed since the Effective date of [the] Agreement.” JBC was obligated to pay the second $250, 000 “upon completion of Phase 1.”[15]

         12. The Agreement further provides that “JBC, subject to its approval, will be responsible for payment of the following third party fees and expenses: all principal and interest for the indebtedness incurred by the JBC and all costs of the financing, fees and costs of the Architect, Underwriter, Issuer, NMTC Advisor and Financial Advisor; construction costs; and legal fees and expenses of JBC counsel.”[16]

         13. JBC paid CFP the first $250, 000 installment for Phase 1 services on January 5, 2015.[17]

         14. JBC paid CFP an additional $343, 451.33 on July 21, 2015.[18]

         15. JBC thus paid CFP a total of $593, 451.33.

         16. The Agreement provides that JBC could terminate the Agreement without cause under a “Termination for Convenience” provision.[19]If JBC decided to terminate for convenience, it was “obligated to pay [CFP] only for those Services performed and to reimburse for all third party expenses incurred by [CFP] under [the] Agreement up to and through the ...


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