Dutruch v. Se. La. Water & Sewer Co.

KENNETH E. DUTRUCH v. SOUTHEASTERN LOUISIANA WATER AND SEWER CO., LLC AND JARED RIECKE

NUMBER 2013 CA 1327

STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT

Judgment Rendered: July 3, 2014

NOT DESIGNATED FOR PUBLICATION

Appealed from the

Twenty-Second Judicial District Court

In and for the Parish of St. Tammany

State of Louisiana

Suit Number 2010-11212

Honorable William J. Knight, Presiding

Alex J. Peragine

Erin F. Lorio

Amanda W. Cox

Covington, LA

Counsel for Plaintiff/Appellant

Kenneth E. Dutruch

Jeremy D. Goux

James C. Arceneaux, IV

Covington, LA

Counsel for Defendants/Appellees

Southeastern Louisiana Water and

Sewer Co., LLC and Jared Riecke

BEFORE: PARRO, GUIDRY, AND DRAKE, JJ.

GUIDRY, J.

Plaintiff, Kenneth Dutruch, appeals from a trial court judgment granting summary judgment in favor of defendants, Southeastern Louisiana Water and Sewer Co., LLC (SELA) and JARED Riecke, and dismissing his claims with prejudice. For the reasons that follow, we affirm.

FACTS AND PROCEDURAL HISTORY

Dutruch is a licensed electrical engineer and owner of Professional Engineering Consultants Corporation (PEC), which provides engineering and consulting services. On November 15, 2004, Dutruch and SELA entered into an exclusive agency agreement, authorizing Dutruch, along with Bruce Cucchiara and Gerald Gilbert (directors of SELA), to act as exclusive agents of SELA to secure a sale for SELA. The agreement provided that if a commitment to purchase was obtained by the exclusive agents or by SELA from any source that the agents introduced, SELA agreed to pay the agents a fee of 5% on the total amount of the sale price. The agreement further provided that the fee was earned on the securing of a commitment to purchase and payable upon the execution of the documents consummating the sale. Finally, the parties agreed to honor the guarantees in the agreement for three years from the date of the agreement.

After signing the agreement, Dutruch performed preliminary work on attracting a buyer for SELA. Ultimately, Dutruch recommended that a public entity, such as St. Tammany Parish Government, would be the most advantageous buyer for SELA. The exclusive agents subsequently initiated conversations with the Parish regarding the purchase of SELA.

In December 2006, Jared Riecke, CEO of SELA, met with Parish officials regarding the proposed sale of SELA to the Parish. Thereafter, SELA renegotiated its agreement with the exclusive agents, adjusting the terms of their fee. Specifically, a January 31, 2007 agreement provided that, should a commitment topurchase be obtained by the exclusive agents or by SELA from any source the agents introduced, SELA agreed to pay a fee referred to as a finder's fee. The agreement provided that the finder's fee shall be either a flat rate finder's fee or a percentage rate finder's fee. The type of fee payable depended upon the net cash paid to SELA and was determined according to a schedule contained in the agreement. Additionally, the agreement provided:

And further, the November 15, 2004 [agreement] shall be supplemented and ... considering the many nuances associated with the sale of a business, SELA shall not be required to accept any purchase price and therefore, shall not be liable to [the exclusive agents] for a Finder's Fee unless and until, SELA, in its sole discretion, accepts the terms of a purchase agreement with a potential buyer. If, for any reason, SELA decides not to execute a purchase agreement or refuses to close on the sale of the company, SELA shall not be obligated to [the exclusive agents] for any Finder's Fee or any amount whatsoever.

Finally, the agreement provided that the remainder of the November 15, 2004 agreement remained unchanged and was given full force and effect as of the date of its execution.

On May 17, 2007, the Parish presented an offer to Riecke to purchase SELA for $39,000,000. On May 23, 2007, Riecke rejected the Parish's offer and proposed a counteroffer for $54,000,000. However, the Parish rejected Riecke's counteroffer on October 25, 2007, and again offered $39,000,000 for the purchase of SELA. Thereafter, Riecke informed Dutruch, Cucchiara, and Gilbert in an October 29, 2007 email that SELA was going to reject the Parish's offer and was not going to prepare a counteroffer, because SELA felt that the Parish was not dealing in good faith. Riecke also noted that the exclusive agency agreement was about to expire, and that there were no more potential buyers forthcoming. On November 5, 2007, Riecke formally rejected the Parish's offer.

In January 2010, the Parish and SELA finally agreed on a purchase price of $36,000,000 for SELA's assets. Thereafter, counsel for Dutruch notified SELAthat Dutruch's fee had been earned and was due at closing and requested confirmation that SELA would protect Dutruch's interest in the proceeds of the sale. However, SELA responded, advising that it disputed any claim by Dutruch to a fee pursuant to the November 15, 2004 agreement and/or the supplemental January 31, 2007 agreement.

On February 23, 2010, Dutruch filed a petition for breach of contract and for damages, naming SELA and Riecke as defendants. Dutruch asserted that SELA's conduct was a repudiation and an anticipatory breach of the agreement between the parties and the amendment thereto. Following the consummation of the sale between the Parish and SELA in March 2010, Dutruch amended his petition to assert that the terms and conditions of the agreements are enforceable and binding against SELA, and that Dutruch is entitled to damages for breach of the agreements under applicable law.

Thereafter, Riecke and SELA filed a motion for summary judgment, asserting that Dutruch could not establish that he performed his obligations within the three-year term of the agreements. Particularly, they asserted that Dutruch could not establish any acceptance of an offer by Riecke or execution of a purchase agreement between November 15, 2004 and November 15, 2007, nor could he show that Riecke closed on any sale of SELA or SELA's assets during that same time.

Following a hearing on the motion, the trial court granted summary judgment in favor of Riecke and SELA and dismissed Dutruch's claims against them with prejudice. Dutruch now appeals from the trial court's judgment.

STANDARD OF REVIEW

A motion for summary judgment is a procedural device used to avoid a full scale trial when there is no genuine issue of material fact. Johnson v. Evan Hall Sugar Cooperative, Inc., 01-2956, p. 3 (La. App. 1st Cir. 12/30/02), 836 So. 2d484, 486. A motion for summary judgment is properly granted if the pleadings, depositions, answers to interrogatories, and admissions, together with affidavits, if any, admitted for purposes of the motion for summary judgment, show that there is no genuine issue of material fact, and that mover is entitled to judgment as a matter of law. La. C.C.P. art. 966(B)(2).

On a motion for summary judgment, the burden of proof is on the mover. If, however, the mover will not bear the burden of proof at trial on the matter that is before the court on the motion for summary judgment, the mover's burden on the motion does not require that all essential elements of the adverse party's claim, action, or defense be negated. Instead, the mover must point out to the court that there is an absence of factual support for one or more elements essential to the adverse party's claim, action, or defense. Thereafter, the adverse party must produce factual evidence sufficient to establish that he will be able to satisfy his evidentiary burden of proof at trial. If the adverse party fails to meet this burden, there is no genuine issue of material fact, and the mover is entitled to summary judgment. La. C.C.P. art. 966(C)(2).

In determining whether summary judgment is appropriate, appellate courts review evidence de novo under the same criteria that govern the trial court's determination of whether summary judgment is appropriate. Lieux v. Mitchell, 06-0382, p. 9 (La. App. 1st Cir. 12/28/06), 951 So. 2d 307, 314, writ denied, 07-0905 (La. 6/15/07), 958 So. 2d 1199. Because it is the applicable substantive law that determines materiality, whether a particular fact in dispute is material can be seen only in light of the substantive law applicable to the case. Smith v. Kopynec, 12-1472, p. 4 (La. App. 1st Cir. 6/7/13), 119 So. 3d 835, 837. Interpretation of a contract is usually a legal question which can be properly resolved in the framework of a motion for summary judgment. Sanders v. Ashland Oil, Inc., 96-1751, p. 7 (La. App. 1st Cir. 6/20/97), 696 So. 2d 1031, 1036, writ denied, 97-1911 (La. 10/31/97), 703 So. 2d 29.

DISCUSSION

Generally, legal agreements have the effect of law upon the parties, and, as they bind themselves, they shall be held to a full performance of the obligations flowing therefrom. Belle Pass Terminal Inc. v. John, Inc., 92-1544, 92-1545, p. 16 (La. App. 1st Cir. 3/11/94), 634 So. 2d 466, 479, writ denied, 94-0906 (La. 6/17/94), 638 So. 2d 1094. In other words, a contract between the parties is the law between them, and the courts are obligated to give legal effect to such contracts according to the true intent of the parties. La. C.C. art. 2045; Sanders, 96-1751 at p. 7, 696 So. 2d at 1036.

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. La. C.C. art. 2046. The rules of interpretation establish that, when a clause in a contract is clear and unambiguous, the letter of that clause should not be disregarded under the pretext of pursuing its spirit. La. C.C. art. 2046, comment (b); Boh Bros. Construction Co., LLC v. State ex rel, Department of Transportation and Development, 08-1793, p. 4 (La. App. 1st Cir. 3/27/09), 9 So. 3d 982, 984 85, writ denied, 09-0856 (La. 6/5/09), 9 So. 3d 870.

To determine the meaning of words used in a contract, a court should give them their generally prevailing meaning. La. ...