Servicios Azucareros de Venezuela, C.A. et al v. John Deere Thibodeaux, Inc.

Filing 77

ORDER & REASONS denying 65 Motion for Reconsideration. Signed by Judge Martin L.C. Feldman on 3/27/2013. (caa, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
SERVICIOS AZUCAREROS
DE VENEZUELA, C.A. ET AL.

CIVIL ACTION

VERSUS

NO. 10-4443

JOHN DEERE THIBODAUX, INC.

SECTION “F”

ORDER AND REASONS
Before the Court is plaintiffs' motion for a partial new
trial.

For the reasons that follow, the motion is DENIED.
Background

This dispute arises out of an alleged breach of an oral
contract.
Servicios Azucareros de Venezuela, C.A., a Venezuela
corporation, and its president, Zvonimir Tolj, Sr., a citizen of
Venezuela (collectively, “Servicios”), assert that Servicios had
an oral contract with Cameco Industries, Inc., making Servicios
the exclusive distributor of John Deere products in Venezuela.
In 1996, Cameco changed its name to John Deere Thibodaux, Inc.
Although the contract was oral, Servicios contends that it
was substantiated with various written instruments over the
years.

Specifically, Servicios asserts that John Deere confirmed

in writing to customers in Venezuela that its products were sold
exclusively though Servicios, and that it informed other
companies to cease representing themselves as John Deere dealers

1

based on Servicios’s exclusive distributorship.

Servicios

submits that through its efforts over the years, it successfully
developed the Venezuelan market for John Deere products.
Under the oral contract, Servicios alleges that it was
entitled to receive, and did for many years, a 20% commission on
all John Deere harvesters and tractors, and a 25% commission on
spare parts, sold in Venezuela.

In 2006, Servicios contends that

John Deere, using “economic duress”, wrongfully reduced
Servicios’s commission from 20% to 10%; however, Servicios
continued to sell and distribute John Deere products under the
reduced commission rate.

Then in 2008, Servicios asserts, John

Deere wrongfully terminated its contract.
Servicios sued John Deere in this Court on December 1, 2010,
invoking the Court’s diversity jurisdiction, and asserting claims
under Louisiana and, alternatively Venezuela, law.

Under

Louisiana law, Servicios seeks recovery of damages for breach of
contract under Louisiana Civil Code articles 1983, 1966-67, 201314, and 2024, and, for commissions wrongfully withheld under
Louisiana Revised Statutes sections 51:481-90; alternatively,
Servicios claims unjust enrichment under article 2298.

Under

Venezuelan law, Servicios asserts contract remedies pursuant to
Venezuela Civil Code articles 1159, 1212, and 1264, unjust
enrichment under article 1184, and moral damages under article
1196.

In sum, Servicios seeks over $1.5 million in damages.

2

On March 14, 2011, John Deere filed a motion to dismiss
pursuant to Federal Rule of Civil Procedure 12(b)(6), alleging
that Servicios did not have standing to sue, and, even assuming
that the standing requirement was met, Servicios’s claims under
Louisiana Revised Statute 51:481, the Louisiana Dealer Agreement
Act, fail because the statute applies solely to Louisiana
dealers.

The Court ordered supplemental briefing on (1) whether

the plaintiffs have prudential standing, and (2) whether
Louisiana or Venezuela law governs plaintiffs' claims.

On July

29, 2011, the Court granted John Deere’s motion to dismiss,
finding that plaintiffs did not have standing.

Servicios moved

to reopen the case, which the Court denied on September 1, 2011.
Servicios appealed this Court’s decision to the U.S. Court of
Appeals for the Fifth Circuit.

On December 13, 2012, the Fifth

Circuit, finding that Servicios had standing, vacated this
Court’s decision dismissing the complaint and remanded the case
for further proceedings.

John Deere again moved to dismiss under

Rule 12(b)(6) on January 18, 2013, which this Court granted in
part and denied in part on February 6, 2013.

Servicios now moves

the Court to reconsider its February 6, 2013 Order and Reasons.
Legal Standards
I.
Motions requesting reconsideration of court orders generally
fall under Rule 59(e) or Rule 60 of the Federal Rules of Civil

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Procedure.

See Higgins v. Cain, No. 07-9729, 2012 WL 3309716, at

*1 (E.D. La. Aug. 13, 2012).

Rule 59(e) provides that a motion

to alter or amend a judgment must be filed no later than twentyeight days after the entry of judgment.

Fed. R. Civ. P. 59(e).

Rule 60(b), on the other hand, applies to motions filed after the
twenty-eight day period, but demands more “exacting substantive
requirements.”

See Lavespere v. Niagara Mach. & Tool Works,

Inc., 910 F.2d 167, 173-74 (5th Cir. 1990), abrogated on other
grounds, Little v. Liquid Air Corp., 37 F.3d 1069, 1078 (5th Cir.
1994) (en banc).
Because the Court entered the challenged Order and Reasons
on February 6, 2013, and Servicios filed its motion to reconsider
within twenty-eight days on February 15, 2013, the motion to
reconsider is timely under Rule 59(e), and such analysis is
appropriate.
II.
“A Rule 59(e) motion ‘calls into question the correctness of
a judgment.’”

Templet v. Hydrochem, Inc., 367 F.3d 473, 478 (5th

Cir. 2004) (quoting In re Transtexas Gas Corp., 303 F.3d 571, 581
(5th Cir. 2002)).

Because of the interest in finality, Rule

59(e) motions may only be granted if the moving party shows there
was a mistake of law or fact or presents newly discovered
evidence that could not have been discovered previously. Id. at
478-79.

Moreover, Rule 59 motions should not be used to

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relitigate old matters, raise new arguments, or submit evidence
that could have been presented earlier in the proceedings.

See

id. at 479; Rosenblatt v. United Way of Greater Houston, 607 F.3d
413, 419 (5th Cir. 2010) (“[A] motion to alter or amend the
judgment under Rule 59(e) ‘must clearly establish either a
manifest error of law or fact or must present newly discovered
evidence’ and ‘cannot be used to raise arguments which could, and
should, have been made before the judgment issued’”) (citing
Rosenzweig v. Azurix Corp., 332 F.3d 854, 864 (5th Cir. 2003)
(quoting Simon v. United States, 891 F.2d 1154, 1159 (5th Cir.
1990)).

The grant of such a motion is an “extraordinary remedy

that should be used sparingly.”

Indep. Coca-Cola Employees’

Union of Lake Charles, No. 1060 v. Coca-Cola Bottling Co. United,
Inc., 114 F. App’x 137, 143 (5th Cir. Nov. 11, 2004) (citing
Templet, 367 F.3d at 479).

The Court must balance two important

judicial imperatives in deciding whether to reopen a case in
response to a motion for reconsideration: “(1) the need to bring
the litigation to an end; and (2) the need to render just
decisions on the basis of all the facts.”

Templet, 367 F.3d at

479.
Discussion
The Court finds reconsideration of its February 6, 2013
decision to be inappropriate because Servicios fails to present

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newly-discovered evidence or to show that the Court erred in its
factual and legal analysis.
In its February 6, 2013 Order and Reasons, the Court held
that (1) Servicios fails to state a claim under the Louisiana
Dealer Agreement Act because the Act applies to resident dealers
only; (2) any claims are prescribed under Louisiana law for
underpaid commissions that accrued before November 30, 2008; and
(3) Servicios’ claim for an accounting lacks specificity to state
a claim upon which relief can be granted.

The Court granted

Servicios leave to provide a more definite statement under Rule
12(e) as to its claim for an accounting, and, in response,
Servicios filed an amended complaint on February 19, 2013.
Servicios does not challenge the Court’s ruling on the Louisiana
Dealer Agreement Act; rather, Servicios alleges that the Court
improperly held that the three-year prescriptive period of
Louisiana Civil Code Article 3494 governs, and that this Court
should decide whether Louisiana or Venezuelan law applies to
Servicios’ breach of contract claims.

The Court addressees each

in turn.1
1

Servicios raises two threshold issues, arguing that the
Court should take into consideration that this was John Deere’s
second 12(b)(6) motion, and that Servicios previously attempted
to file an amended petition.
First, Servicios submits that the case literature
discourages multiple 12(b)(6) motions. Servicios is simply
relitigating old matters, for the Court rejected this argument in
its earlier decision. Federal Rule of Civil Procedure 12(g)(2)
states that “[e]xcept as provided in Rule 12(h)(2) or (3), a
party makes a motion under this rule must not make another motion
6

I.
Servicios contends that the Court erred in holding that the
three-year prescriptive period of Article 3494 applies because
(1) its accounting claim is governed by the ten-year prescriptive
period; (2) the crux of this case involves contract
interpretation, not recovery for underpaid commissions; and (3)
its claim for unjust enrichment is subject to the ten-year
prescriptive period.

Therefore, if Servicios' accounting claim,

under this rule raising a defense or objection that was available
to the party but omitted from its earlier motion.” Rule 12(h)(2)
permits a party, however, to assert a defense for failure to
state a claim upon which relief can be granted in any pleading
permitted under Rule 7(a), a motion for judgment on the pleadings
under Rule 12(c), or at trial. See Fed. R. Civ. P. 12(h)(2).
Although John Deere’s second 12(b)(6) motion raised new and old
grounds for relief, any error is harmless, where, as here, the
additional defenses could have been raised in a Rule 12(c) motion
for judgment on the pleadings, which is subject to the same
standard of review as a motion to dismiss under Rule 12(b)(6).
See, e.g., Cannon v. Sixth Dist. Pub. Defender Office, No. 092164, 2010 WL 5855912, at *3 (W.D. La. Oct. 26, 2010) (holding
that the defendant did not waive his new defenses by failing to
include them in his original Rule 12(b)(6) motion to dismiss,
because the arguments could have been raised in a Rule 12(c)
motion, which is evaluated under the standard as a Rule 12(b)(6)
motion).
Second, Servicios contends that it previously attempted to
file an amended “petition.” The Court is aware that Servicios
filed a motion for leave to amend its petition in July 2011;
however, the magistrate judge never ruled on the motion before
the case was dismissed. As a result, Servicios was never granted
leave to file an amended complaint, and this Court has no way of
knowing whether the magistrate judge would have allowed
plaintiffs to do so in the first place. Therefore, the fact that
plaintiffs previously attempted to file an amended complaint has
no bearing on the Court’s February 6, 2013 Order and Reasons or
this motion for reconsideration.
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"contract interpretation" claim, and unjust enrichment claim
prescribe in ten years, "it would make no sense to cut off the
claim for money due under the three year statute."

In other

words, because Servicios is seeking other relief (an accounting)
and relying on equitable theories of recovery (unjust
enrichment), Servicios is effectively requesting the Court to
apply an across-the-board ten-year prescriptive period to all
claims.

In the alternative, assuming the three-year period does

apply, Servicios submits that its claims are not "exigible"
because it does not know how much it is owed until it receives an
accounting.
A.
Servicios fails to cite any authority for its assertion that
the Court should apply an across-the-board prescriptive period
because Servicios alleges multiple forms of relief.

To the

contrary, different causes of action frequently have different
prescriptive periods.

Whether or not Servicios' claim for an

accounting has a ten-year prescriptive period does not change the
prescriptive period for its breach of contract claim.

As the

Court explained at length in its February 6, 2013 Order and
Reasons, a personal action (which includes a claim for breach of
contract) is subject to a liberative prescriptive period of ten
years under Louisiana Civil Code Article 3499 unless otherwise
provided by law.

La. Civ. Code Ann. Art. 3499.

8

An exception to

this general rule is found in Louisiana Civil Code article 3494,
which subjects claims for the recovery of compensation for
services rendered, including the payments of commissions, to a
three-year prescriptive period.

La. Civ. Code Ann. art. 3494.

This three-year prescriptive period commences to run from the day
payment is “exigible”, or exact enough to be demandable.
Civ. Code Ann. art. 3495.

La.

The Louisiana Supreme Court has

expressly held:
A petition claiming breach of contract by the payment of
wages less than what is due and seeking judgment for the
underpaid wages is clearly a cause of action asserting
the right to recover unpaid wages. Breach of contract is
not a free standing cause of action.
It is a legal
premise, or principle, which gives rise to the right to
claim some substantive remedy of law. Here that remedy
is the recovery of past due wages.
Grabert v. Iberia Parish Sch. Bd., 93-2715, p. 2 (La. 7/5/94);
638 So. 2d 645, 646 (emphasis added).

As the Court has

previously emphasized, substance prevails over form.

In this

case, John Deere's alleged failure to pay the full and proper
compensation for services rendered gives rise to the action for
breach of contract, for which the remedy is recovery of
commissions.

Therefore, the three-year prescriptive period of

Article 3494 applies to Servicios' breach of contract claims,
regardless of whether Servicios also alleges a claim for an
accounting and unjust enrichment.

Further, the case law on which

Servicios relies to support the assertion that an accounting
claim prescribes in ten years is unhelpful:
9

the cases do not

involve comparable factual scenarios, nor do they offer support
to Servicios' assertion that the prescriptive period for an
accounting claim somehow "trumps" the period for a breach of
contract claim.

In its motion to dismiss, John Deere was not

contesting–-and this Court did not address--the prescriptive
period for Servicios' claim for an accounting or unjust
enrichment.2
B.
Even assuming the three-year prescriptive period applies,
Servicios maintains that it does not have an exigible claim for
past-due commissions because it has yet to receive an accounting,
which will inform Servicios how much it is owed.

Servicios'

breach of contract claim, however, does not derive from John
Deere's failure to pay some specific amount; rather, the breach
of contract claim stems from the alleged percentage reduction and
2

To the extent that Servicios is relying on the unjust
enrichment claim for its across-the-board proposition, the Court
notes that unjust enrichment "shall not be available if the law
provides another remedy." Walters v. MedSouth Record Mgmt., LLC,
10-0352, p. 2(La. 6/4/10); 38 So. 3d 241, 242 (quoting Carriere
v. Bank of La., 93-3058, p. 17 (La. 12/13/96); 702 So. 2d 648,
671). "The unjust enrichment remedy is only available to fill a
gap in the law where no express remedy is provided." Id.
(internal quotation marks omitted); see also Jim Walter Homes v.
Jessen, 98-1685, p. 13 (La. App. 3 Cir. 3/31/99); 732 So. 2d 699,
706 ("To find that [plaintiff] now has no other remedy and to
provide it one under unjust enrichment would be tantamount to
allowing any plaintiff who let his cause of action prescribe, or
any plaintiff who knowingly wrote a bad contract, to recover
under enrichment theory. The law on unjust enrichment does not
apply when there is a remedy available such as the contract
described herein . . . .").
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subsequent nonpayment of full commissions.

In its complaint,

Servicios states that "[i]n 2006, Deere unilaterally and
wrongfully reduced Plaintiffs' commission from 20% to 10%."
Further, Servicios asserts:
On or about early 2008, Deere then unilaterally and
wrongfully attempted to terminate the contract with
Plaintiffs.
At that time, various sales were in
progress, and substantially completed, and Plaintiffs had
a substantial investment in Deere parts and equipment.
Deere has refused to pay the additional 10% due under the
oral contract, and has refused to pay any commissions on
sales completed at that time, and sales in progress at
that time . . . .
The claim was exigible as soon as it was exact enough to be
demandable–-here, when John Deere supposedly reduced Servicios'
commission rate from 20% to 10% in 2006, or, at the latest, when
John Deere terminated the contract in early 2008.
II.
Servicios also contends that this Court should decide
whether Louisiana or Venezuelan law applies to Servicios' breach
of contract claims.

Specifically, Servicios points to Civil Code

Article 3549, which provides:
. . . When the substantive law of another state
would be applicable to the merits of an action brought in
this state, the prescription and peremption law of this
state applies, except as specified below:
. . . If the action is barred under the law of this
state, the action shall be dismissed unless it would not
be barred in the state whose law would be applicable to
the merits and maintenance of the action in this state is
warranted by compelling considerations of remedial
justice.

11

La. Civ. Code Ann. art. 3459(B)(1).

Therefore, the argument

goes, that even if Servicios' claim is barred in Louisiana, if
the law of Venezuela applies, the action shall not be dismissed
if maintenance of the lawsuit is warranted by compelling
considerations of remedial justice.
Regarding whether Louisiana or Venezuela law applies, the
Court notes that in dealing with John Deere’s motion to dismiss,
all parties argued, Servicios too, that Louisiana law applied.3
“The court need not sua sponte analyze choice of law issues
unless raised by the parties.”

Tobin v. AMR Corp., 637 F. Supp.

2d 406, 412 (N.D. Tex. 2009).

The Fifth Circuit has stated that

a party has “an obligation to call the applicability of another
state’s law to the court’s attention in time to be properly
considered.”

Kucel v. Heller, 813 F.2d 67, 74 (5th Cir. 1987).

If Servicios belatedly seeks the supposed comfort of Venezuelan
law, a Rule 59(e) motion is an improper vehicle, for “a motion to
alter or amend the judgment under Rule 59(e) . . . cannot be used
to raise arguments which could, and should, have been made before
the judgment issued.”

Rosenblatt, 607 F.3d at 419 (internal

3

In its opposition memorandum to defendant's motion to dismiss,
Servicios does raise the choice of law issue; however, Servicios
then argues the applicability of Louisiana law without doing a
choice of law analysis. For instance, Servicios notes that
"[t]he Louisiana Dealer Act should apply" and that "Louisiana's
contract policy of 'protecting one party from undue imposition by
the other' justifies the application of Louisiana law in this
case."
Rather simply, Servicios states that "the Court should
apply Louisiana law."
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quotation marks omitted).

Further, whether Louisiana law or

Venzuelan law governs plaintiffs' breach of contract claim does
not demonstrate a manifest error of law in the Court’s February
6, 2013 decision.

Under Louisiana law, any claims for

commissions that accrued prior to November 30, 2007 are
prescribed.

The Court did not state that all of Servicios'

claims were dismissed; therefore, if Servicios now reverses its
argument on the applicability of Venezuelan law, which would
implicate Article 3549, it should do so in the form of a
thoroughly-briefed and professional motion, being also evermindful of 28 U.S.C. § 1927.4
Accordingly, the plaintiffs' motion for a partial new trial
is DENIED.

New Orleans, Louisiana, March 27, 2013

______________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE

4

The Court notes that the parties were requested to provide such
briefing on July 15, 2011 before the case was dismissed.
Servicios' submission, however, does not address the factors
required for a choice of law analysis and appears to assume that
Louisiana law applies.
13