United States District Court, E.D. Louisiana
ORDER AND REASONS
L. C. FELDMAN, UNITED STATES DISTRICT JUDGE.
the Court is Bellwether Enterprise Real Estate Capital's
Rule 12(b)(6) motion to dismiss the counterclaims of
Christopher Jaye and Kristi Morgan. For the reasons that
follow, the motion is GRANTED, in part, as to Jaye and
Morgan's standalone claim for attorney's fees, and
DENIED, in part, as to all other claims.
contract dispute arises from a project to build affordable
housing in New Orleans East.
Jaye and Kristi Morgan own a real estate development company
called Mirus New Orleans. That company owns the Village of
Versailles project - the first affordable housing development
built in New Orleans East since Hurricane Katrina.
the project, Jaye, Morgan, and Mirus obtained a commercial
mortgage loan from Bellwether. The loan is insured by the
United States Department of Housing and Urban Development
(HUD) and memorialized in a mortgage note and a building loan
agreement. Under the building loan agreement, Bellwether
agreed to advance the final loan proceeds upon HUD's
final endorsement of the mortgage note for insurance.
condition of the loan, Jaye, Morgan, and Mirus entered into
an extension fee agreement. The agreement required each to
pay Bellwether a monthly “extension fee” if final
endorsement did not occur by August 31, 2018:
1. Extension Fees. (a) Obligor agrees that in the
event that Final Endorsement has not occurred on or before
August 31, 2018, Obligor shall be liable and obligated to pay
to Lender a monthly extension fee (the “Extension
Fee”) equal to (i) 1/8th of one percent
(0.125%) of the original face amount of the FHA Mortgage Note
for each “monthly Period” (as defined below) or
portion thereof, commencing on September 1, 2018 and
continuing through November 31, 2018 then increasing to (ii)
1/4th of one percent (0.25%) of the original face
amount of the FHA Mortgage Note for each Monthly Period or
portion thereof, commencing on December 1, 2018 and
continuing until Final Endorsement. In the event that Final
Endorsement shall not theretofore have occurred, Obligor
shall be obligated to pay each such monthly Extension Fee in
advance, fifteen (15) days prior to the commencement of the
applicable Monthly Period; provided that Lender shall refund
the last such monthly Extension Fee to Obligor in the event
that Final Endorsement shall occur prior to the commencement
of the applicable Monthly Period. Thereafter, there shall be
no refund of the monthly Extension Fee. As used herein [sic]
“Monthly Period” shall mean a
period starting on the first day of a month and ending on the
last day of that month.
endorsement did not follow; litigation did. In September
2018, the contractor on the project, Broadmoor, LLC, pointed
to missed payments and sued Mirus, Bellwether, and others.
See Civil Action No. 18-9064. The suit settled in
March 2019, and final endorsement occurred around the same
months later, Bellwether sued Jaye and Morgan for breaching
the extension fee agreement. Bellwether says Jaye and Morgan
owe it over $360, 000 in unpaid extension fees and interest.
Jaye and Morgan responded with counterclaims.
and Morgan counterclaimed against Bellwether for breach of
contract and a declaratory judgment that the extension fee
agreement is unenforceable. They also assert a stand-alone
claim for attorney's fees “as provided by”
the extension fee agreement.
the breach-of-contract counterclaim, Jaye and Morgan say
Bellwether breached implied obligations arising from the
extension fee agreement by “unreasonably and wrongfully
delay[ing]” final endorsement. They say they gave
Bellwether everything it needed to proceed to final
endorsement by August 31, 2018, but Bellwether failed to do
the declaratory-judgment counterclaim, Jaye and Morgan say
the extension fee agreement is unenforceable because it
provides for “liquidated penalty damages" that are
“manifestly unreasonable.” They add that
Bellwether failed to place them in default, a prerequisite
for recovering stipulated damages under Louisiana law.
attorney-fee counterclaim is unadorned. Jaye and Morgan
merely allege that they “are entitled to recover”
attorney's fees “as provided by the parties'
agreement and under Louisiana law.”
Bellwether moves to dismiss under Rule 12(b)(6). It first
contends that the breach-of-contract counterclaim fails
because Jaye and Morgan do not identify a contractual duty it
breached. It next contends that the declaratory-judgment
counterclaim fails because Jaye and Morgan fail to allege
facts showing that the extension fee agreement is
unenforceable. It finally contends that the attorney-fee
counterclaim fails because the extension fee agreement does
not contain a provision allowing Jaye and Morgan to recover
complaint must contain a short and plain statement of the
claim showing that the pleader is entitled to relief.
Fed.R.Civ.P. 8(a)(2). A party may move for dismissal of a
complaint that fails this requirement. See
Fed.R.Civ.P. 12(b)(6). Such motions are rarely granted
because they are viewed with disfavor. Leal v.
McHugh, 731 F.3d 405, 410 (5th Cir. 2013) (quoting
Turner v. Pleasant, 663 F.3d 770, 775 (5th Cir.
considering a Rule 12(b)(6) motion, the Court
“accept[s] all well-pleaded facts as true and view[s]
all facts in the light most favorable to the
plaintiff.” Thompson v. City of Waco, Tex.,
764 F.3d 500, 502 (5th Cir. 2014) (citing Doe ex rel.
Magee v. Covington Cty. Sch. Dist. ex rel. Keys, 675
F.3d 849, 854 (5th Cir. 2012) (en banc)). Conclusory
allegations are not well pleaded and, consequently, are not
accepted as true. See Thompson, 764 F.3d at 502-03
(citing Ashcroft v. Iqbal, 556 U.S. 662, 678
overcome a Rule 12(b)(6) motion, “‘a complaint
must contain sufficient factual matter, accepted as true, to
state a claim to relief that is plausible on its
face.'” Gonzalez v. Kay, 577 F.3d 600, 603
(5th Cir. 2009) (quoting Iqbal, 556 U.S. at 678). A
claim is facially plausible if it contains “factual
content that allows the court to draw the ...