Kennedy Marr Offshore Singapore PTE Ltd. v. Techcrane International Inc.

Filing 49

ORDER AND REASONS re 23 MOTION for Partial Summary Judgment, and 24 MOTION for Summary Judgment: ORDERED that plaintiff's motion for summary judgment on its principal demand plus interest and costs is GRANTED. Plaintiff's claim f or attorney's fees is DENIED. FURTHER ORDERED that plaintiff's motion for partial summary judgment with respect to defendant's affirmative defenses is GRANTED. FURTHER ORDERED that the above-captioned matter is DISMISSED WITH PREJUDICE. Signed by Judge Lance M Africk on 6/27/2013.(blg)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

KENNEDY MARR OFFSHORE
SINGAPORE PTE LTD.

CIVIL ACTION
NO. 12-1985

VERSUS
SECTION I
TECHCRANE INTERNATIONAL INC.

ORDER AND REASONS
Before the Court is a motion1 for summary judgment and a motion2 for partial summary
judgment filed by plaintiff, Kennedy Marr Offshore (Singapore) PTE, Ltd.

Defendant,

Techcrane International, Inc., opposes the motions.3 For the following reasons, the motion for
summary judgment is GRANTED IN PART and DENIED IN PART. The motion for partial
summary judgment is GRANTED.
Background
Plaintiff, Kennedy Marr Offshore (Singapore) PTE, Ltd. (“Kennedy Marr”), is a ship
broker specializing in the markets for the building, sale, and charter of offshore industry vessels
and equipment.4 Kennedy Marr entered into a Marketing Agreement dated April 25, 2007 with
the Levingston Corporation (“Levingston”) to market Levingston’s liftboat concept worldwide

1

R. Doc. No. 24.

2

R. Doc. No. 23.

3

R. Doc. Nos. 33, 34.

4

Stmt. of Mat. Facts, R. Doc. No. 24-2, at ¶ 1; R. Doc. No. 33-4, at ¶ 1.
1

(“the Marketing Agreement”).5 As remuneration for Kennedy Marr’s services, the Marketing
Agreement provides as follows:
In the case that Levingston sells its design, engineering or other
services (including but not limited to supervisory services) and/or
sells, leases or charters equipment (including, but not limited to,
liftboat units, jacking systems, leg sections, cranes, machinery) to
any non-US based company then, KML shall be paid by
LEVINGSTON a commission equal to 2.5% (two and a half per
cent) of the total gross proceeds received by Levingston, or any of
its subsidiary, associated or affiliated companies.6
Pursuant to the Marketing Agreement, Kennedy Marr introduced Levingston to Ezion
Holdings, Ltd. and its associated company Ezra Holdings, Ltd. (collectively, “the Buyers”), both
of which are Singapore companies.7 The introduction resulted in a sale to the Buyers of two
liftboats identified by their shipyard hull numbers 702 and 703 (“Vessels 1&2”).8 Levingston
provided the design elements for the liftboats.9 Levingston called upon its “alliance partners,”
Techcrane International, Inc. (“Techcrane”) and Elevating Boats, Inc. (“EBI”), to produce key
equipment for the vessels.10 Although Levingston “wasn’t the broker exactly,” it was “very
much a sort of facilitator . . . in the middle coordinating everything.”11 The alliance partners paid

5

See Marketing Agreement, R. Doc. No. 24-6. According to the complaint, “Liftboats service
existing offshore infrastructure in shallow water. Self-propelled and self-elevating, the liftboats
are designed to be ultra-versatile vessels which get essential maintenance and servicing work
done quickly.” Complaint, R. Doc. No. 1, at ¶ 10.
6

Marketing Agreement, R. Doc. No. 24-6, at p. 2.

7

Marr Dep., R. Doc. No. 33-1, at pp. 24-30; Stmt. of Mat. Facts, R. Doc. No. 24-2, at ¶¶ 3-4; R.
Doc. No. 33-4, at ¶¶ 3-4.

8

Marr Dep., R. Doc. No. 33-1, at pp. 24-30.

9

Marr Dep., R. Doc. No. 33-1, at pp. 33-34.

10

Shad Dep., R. Doc. No. 33-2, at pp. 28-31.

11

Marr Dep., R. Doc. No. 33-1, at p. 33.
2

Levingston a fee for directing business to them.12 Levingston, in turn, paid Kennedy Marr a
commission for the introduction to the Buyers.13
While Vessels 1&2 were still being completed, the Buyers ordered two additional
liftboats identified by their shipyard hull numbers 705 and 706 (“Vessels 3&4”).14 Techcrane
produced equipment for Vessels 3&4 for the sum of $16,645,626.15 Rather than directly paying
Levingston for bringing in the business, Techcrane agreed to assume Levingston’s obligation to
pay Kennedy Marr’s commission.16 According to Kennedy Marr’s representative, Alexander
Marr (“Marr”), his understanding was that the “basic reasoning behind it was Levingston’s own
fee was probably not that significant for the third and fourth units. And, really, it was the
equipment that was the main thing.”17 As a result, “Levingston and Techcrane came to an
agreement that . . . it was more appropriate for Techcrane to be paying Kennedy Marr’s
commission.”18
The agreement was memorialized in a handwritten note drafted by Levingston’s
representative, Ronald E. Sanders (“Sanders”), which simply states, “Vessels 3&4 2.5% to

12

Shad Dep., R. Doc. No. 33-2, at p. 36.

13

Marr Dep., R. Doc. No. 33-1, at pp. 34-36.

14

Shad Dep., R. Doc. No. 33-2, at pp. 41-42.

15

Shad Dep., R. Doc. No. 33-2, at pp. 41-42; Stmt. of Mat. Facts, R. Doc. No. 24-2, at ¶ 8; R.
Doc. No. 33-4, at ¶ 8.

16

Shad Dep., R. Doc. No. 33-2, at pp. 55-56, 100-01; Shad Aff., R. Doc. No. 33-3, at ¶¶ 4, 5.

17

Marr Dep., R. Doc. No. 33-1, at p. 54. According to Marr, Levingston’s fee for the design
elements was likely smaller for Vessels 3&4 because “[t]hey were essentially sister units, the
same, the same as the first two. There was no significant -- There might have been some minor
changes, but they were basically the same things.” Marr Dep., R. Doc. No. 33-1, at p. 38; see
also Shad Dep., R. Doc. No. 33-2, at pp. 40-41 (“It was a repeat.”).
18

Marr Dep., R. Doc. No. 33-1, at p. 42.
3

KM.”19 The note was signed by Sanders and Techcrane’s representative, Farhad Shad (“Shad”)
and dated February 6, 2008.20 On July 26, 2010, Marr sent an email to Shad reminding him that
“KM are [sic] due to be paid 2.5% commission on the equipment sold to Ezion/Ezra for hulls
705/706.”21 Shad responded the next day stating that Techcrane had “the intention of settling
your account before the years end.”22 Shad also confirmed the amount due: “Total selling price
of components for two vessels less the price of power units: 16,645,626.00 x .025 =
$416,140.00.”23
Over the next twelve months, Shad continued to assure Kennedy Marr that Techcrane
would pay the $416,140 commission once Techcrane was paid in full by the Buyers. On
November 15, 2010, Marr sent an invoice to Techcrane for payment in the amount of
$416,140.24 Shad responded stating, “We await remittance from Ezra. Once received, we will
wire the funds to your designated account.”25 Kennedy Marr later received an email from Shad
on January 10, 2011 stating, “As soon as we receive the funds in full, we will transfer the agreed

19

Assumption Agreement, R. Doc. No. 24-16.

20

Assumption Agreement, R. Doc. No. 24-16; Shad Dep., R. Doc. No. 33-2, at pp. 62-63;
Sanders Aff., R. Doc. No. 24-4, at ¶ 8.

21

Stmt. of Mat. Facts, R. Doc. No. 24-2, at ¶ 15; R. Doc. No. 33-4, at ¶ 15; Marr Email, R. Doc.
No. 24-3, at pp. 9-11.

22

Stmt. of Mat. Facts, R. Doc. No. 24-2, at ¶ 16; R. Doc. No. 33-4, at ¶ 16; Shad Email, R. Doc.
No. 24-3, at pp. 13-15.

23

Stmt. of Mat. Facts, R. Doc. No. 24-2, at ¶ 16; R. Doc. No. 33-4, at ¶ 16; Shad Email, R. Doc.
No. 24-3, at pp. 13-15.

24

Stmt. of Mat. Facts, R. Doc. No. 24-2, at ¶ 17; R. Doc. No. 33-4, at ¶ 17; Invoice, R. Doc. No.
24-3, at p. 18.
25

Stmt. of Mat. Facts, R. Doc. No. 24-2, at ¶ 18; R. Doc. No. 33-4, at ¶ 18; Shad Email, R. Doc.
No. 24-3, at pp. 19-20.
4

amount to your account.”26 On February 22, 2011, Shad sent Kennedy Marr an email advising
that it received a letter of credit for the balance of the payment owed to it with the expectation
that payment would be received immediately after June 30, 2011.27 The email stated, “Once
received, the money owed to you will be wire transferred.”28 When Kennedy Marr inquired as to
payment on June 30, 2011, Shad responded on July 12, 2011 that it would “settle our account.”29
Shad advised Kennedy Marr in his final email that while Techcrane was attempting to
produce the equipment for Vessels 3&4, it experienced significant difficulty obtaining progress
payments from the Buyers.30 Shad explained in his deposition that his company was eventually
“blacklisted” by Levingston and the Buyers as a result of his struggle to obtain the progress
payments.31 Shad further testified that he “sensed very strongly” that Levingston was “creating a
rift or not helping to smooth out the rift that had been created by Ezra.”32 Shad testified that the
Buyers later “thumb[ed] their nose at [him]” when they stole his proprietary information and
used it to construct cranes based on his designs for two other liftboats, which are identified by
their shipyard hull numbers 705B and 1005 (“Vessels 5&6”).33 Shad stated that Levingston may

26

Stmt. of Mat. Facts, R. Doc. No. 24-2, at ¶ 19; R. Doc. No. 33-4, at ¶ 19; Shad Email, R. Doc.
No. 24-3, at pp. 21-22.
27

Stmt. of Mat. Facts, R. Doc. No. 24-2, at ¶ 20; R. Doc. No. 33-4, at ¶ 20; Shad Email, R. Doc.
No. 24-3, at p. 23.
28

Stmt. of Mat. Facts, R. Doc. No. 24-2, at ¶ 20; R. Doc. No. 33-4, at ¶ 20; Shad Email, R. Doc.
No. 24-3, at p. 23.
29

Stmt. of Mat. Facts, R. Doc. No. 24-2, at ¶ 21; R. Doc. No. 33-4, at ¶ 21; Shad Email, R. Doc.
No. 24-3, at p. 24.
30

Shad Email, R. Doc. No. 24-3, at p. 24.

31

Shad Dep., R. Doc. No. 33-2, at pp. 80-97.

32

Shad Dep., R. Doc. No. 33-2, at p. 92.

33

Shad Dep., R. Doc. No. 33-2, at pp. 84-88, 90-91.
5

have even facilitated the theft by allowing the Buyers to use Levingston’s patent for Vessels
5&6, which provided “the means to attach the crane onto the jackup boat.”34
Techcrane eventually received full payment in the amount of $16,645,626 for the
equipment Techcrane produced for Vessels 3&4.35 However, despite its assurances to Kennedy
Marr that it would pay the commission once it had been paid by the Buyers, Kennedy Marr
claims that Techcrane has not paid the $416,140 commission.36
On August 1, 2012, Kennedy Marr filed this lawsuit to recover the $416,140 commission,
asserting breach of contract, detrimental reliance, and procuring cause as grounds for recovery.37
Techcrane denied the allegations in the complaint and asserted four affirmative defenses,
generally alleging that: (1) the agreement is void because plaintiff and others failed to act in good
faith by misappropriating Techcrane’s proprietary information; (2) the agreement is illegal and
unenforceable pursuant to law; (3) Techcrane relied upon plaintiff and others to act in good faith,
they did not act in good faith, and they breached their obligations to perform their contractual
obligations; and (4) plaintiff engaged in unfair trade practices, defamation of Techcrane, used
confidential and proprietary information inappropriately, and tortiously interfered with
Techcrane’s contractual arrangements.38

34

Shad Dep., R. Doc. No. 33-2, at pp. 86-87, 92. Shad testified that the patent “has nothing to
do with the crane. It has nothing to do with [the] jackup boat itself. It’s this interface only, how
to attach it. And [Sanders] owns the patent.” R. Doc. No. 33-2, at p. 87.

35

Stmt. of Mat. Facts, R. Doc. No. 24-2, at ¶ 12; R. Doc. No. 33-4, at ¶ 12.

36

Complaint, R. Doc. No. 1, at ¶ 19.

37

Complaint, R. Doc. No. 1.

38

Answer, R. Doc. No. 5.
6

Kennedy Marr now seeks summary judgment on its principal demand for the $416,140
commission, plus attorney’s fees, interest, and costs.39 Kennedy Marr filed a separate motion
seeking partial summary judgment with respect to Techcrane’s affirmative defenses.40 Techcrane
opposes both motions.41 Techcrane argues that the assumption memorialized in the handwritten
note does not satisfy the formal requirements under Louisiana law for assumptions of
obligations.42 Techcrane argues that even if the agreement does not fail for want of form, its
agreement to pay Kennedy Marr a $416,140 commission exceeds Levingston’s true obligation to
Kennedy Marr under the Marketing Agreement.43 Techcrane contends that it is bound only to the
extent of Levingston’s actual obligation to Kennedy Marr under the Marketing Agreement.44
Techcrane also contends that its consent to the assumption was vitiated by error and/or fraud.45
Finally, Techcrane argues that it is not required to pay Kennedy Marr’s commission because
Levingston failed to uphold its obligations under the agreement.46
Standard of Law
Summary judgment is proper when, after reviewing the pleadings, the discovery and
disclosure materials on file, and any affidavits, the court determines there is no genuine issue of
material fact. See Fed. R. Civ. P. 56. The party seeking summary judgment always bears the
39

R. Doc. No. 24.

40

R. Doc. No. 23.

41

R. Doc. Nos. 33, 34. Techcrane does not oppose summary judgment with respect to its fourth
affirmative defense.
42

R. Doc. No. 33.

43

R. Doc. No. 33.

44

R. Doc. No. 33.

45

R. Doc. No. 33.

46

R. Doc. No. 33.
7

initial responsibility of informing the court of the basis for its motion and identifying those
portions of the record that it believes demonstrate the absence of a genuine issue of material fact.
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The party seeking summary judgment need
not produce evidence negating the existence of material fact, but need only point out the absence
of evidence supporting the other party’s case. Id.; Fontenot v. Upjohn Co., 780 F.2d 1190, 1195
(5th Cir. 1986).
Once the party seeking summary judgment carries its burden pursuant to Rule 56, the
other party must come forward with specific facts showing that there is a genuine issue of
material fact for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587
(1986). The showing of a genuine issue is not satisfied by creating “‘some metaphysical doubt
as to the material facts,’ by ‘conclusory allegations,’ ‘unsubstantiated assertions,’ or by only a
‘scintilla’ of evidence.” Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (citations
omitted). Instead, a genuine issue of material fact exists when the “evidence is such that a
reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986). The party responding to the motion for summary judgment may not
rest upon the pleadings, but must identify specific facts that establish a genuine issue. Id. The
nonmoving party’s evidence, however, “is to be believed, and all justifiable inferences are to be
drawn in [the nonmoving party’s] favor.” Id. at 255; see Hunt v. Cromartie, 526 U.S. 541, 552
(1999).
Discussion
Kennedy Marr alleges that Techcrane entered into a valid contract to assume
Levingston’s obligation to pay Kennedy Marr’s 2.5% commission for the sale of Vessels 3&4.
The Louisiana Civil Code provides “special regulations for assumptions of obligations.” La.

8

Civ. Code art. 1821 cmt. (b); see generally Saul Litvinoff, 5 La. Civ. L. Treatise, Law of
Obligations, Chapter 10 (2d. ed. 2012). “An obligor and a third person may agree to an
assumption by the latter of an obligation of the former. To be enforceable by the obligee against
the third person, the agreement must be made in writing.” La. Civ. Code art. 1821. “A person
who, by agreement with the obligor, assumes the obligation of the latter is bound only to the
extent of his assumption. The assuming obligor may raise any defense based on the contract by
which the assumption was made.” La. Civ. Code art. 1822. Because Levingston and Techcrane
agreed to an assumption by Techcrane of Levingston’s obligation to pay Kennedy Marr’s
commission, the Court must analyze the motions for summary judgment in light of the “special
regulations for assumptions of obligations.” See La. Civ. Code art. 1821 cmt. (b).
I. The Handwritten Note
Techcrane first argues that the formal requirements for assumptions of obligations are not
satisfied by the handwritten note, which states only: “Vessels 3&4 2.5% to KM.” The Louisiana
Civil Code provides, “An obligor and a third person may agree to an assumption by the latter of
an obligation of the former. To be enforceable by the obligee against the third person, the
agreement must be made in writing.” See La. Civ. Code art 1821. Although the U.S. Court of
Appeals for the Fifth Circuit has noted that “a promise to pay the debt of a third person must be
explicit, clear, and in writing,” United States v. Park Towers, Inc., 8 F.3d 306, 310 (5th Cir.
1993) (citing La. Civ. Code art. 1821), the inquiry is not necessarily limited to the four corners of
the contract.

Parol evidence is normally prohibited when “offered to prove the existence of a

contract required by law to be in writing,” but it may be admissible to aid “the interpretation of
assumptions of obligations.” Wuellner Oil & Gas, Inc v. EnCana Oil & Gas (USA) Inc., 861 F.
Supp. 2d 775, 782 (W.D. La. 2012) (Foote, J.) (“Louisiana courts routinely apply normal parol

9

evidence principles to determine whether to admit parol evidence to interpret contracts that are
required by law to be in writing.”). Additionally, “parol evidence is competent to prove the
assumption of a debt by one who is activated by a pecuniary interest of his own in making the
agreement.” Cole v. Joshua, 575 So. 2d 859, 862 (La. Ct. App. 2d Cir. 1991) (quoting B. & B.
System, Inc. v. Everett, 34 So. 2d 521 (La. Ct. App. 2d Cir. 1948)); see also Southland Plumbing
Supply, Inc. v. Crescent Refrigeration, Inc., 542 So. 2d 771, 773-74 (La. Ct. App. 4th Cir. 1989).
Under Louisiana law, “Parol or extrinsic evidence is generally inadmissible to vary the
terms of a written contract unless the written expression of the common intention of the parties is
ambiguous.” Campbell v. Melton, 817 So. 2d 69, 75 (La. 2002). “A contract is considered
ambiguous on the issue of intent when either it lacks a provision bearing on that issue, the terms
of a written contract are susceptible to more than one interpretation, there is uncertainty or
ambiguity as to its provisions, or the intent of the parties cannot be ascertained from the language
employed.” Id. “When a court determines as a matter of law that a contract is ambiguous, then
extrinsic (parol) evidence may be used to determine the true intent of the parties, and
determining the intent of the parties becomes, in part, a question of fact.” Eiche v. E. Baton
Rouge Parish Sch. Bd., 623 So. 2d 167, 170 (La. Ct. App. 1st Cir. 1993).
“Summary judgment is seldom appropriate where there is a question as to what was
intended by certain provisions of a contract.” Id. However, summary judgment may be granted
if the Court determines that there are no genuine issues of material fact. See id. (“In this posture,
the granting of a summary judgment is appropriate only if there is no genuine issue as to material
fact.”); Guidry v. American Public Life Ins. Co., 512 F.3d 177, 181 n.5 (5th Cir. 2007)
(“Granting summary judgment on an ambiguous contract may be appropriate only in the very
rare circumstance where ‘there is no issue of material fact concerning the pertinent intent’ of the

10

parties.”); see also Nautilus Ins. Co. v. Curtis Indus. Painting Co., Inc., No. 98-339, 1998 WL
404651, at *3 (E.D. La. July 17, 1998) (Vance, J.) (explaining that even if an insurance policy
was ambiguous, the uncontested parol evidence made clear the parties’ intent).
In this case, Techcrane agreed, in writing, to assume Levingston’s obligation to pay
Kennedy Marr’s 2.5% commission for the sale of Vessels 3&4. As Techcrane observes,
however, the handwritten note is reasonably susceptible to more than one interpretation because
it does not expressly identify what the commission should be based on. Although Kennedy Marr
has necessarily resorted to parol evidence on this issue, the intent of the parties is clearly
established through undisputed evidence that Techcrane “absolutely” agreed to pay Kennedy
Marr’s 2.5% commission on the sale price of the equipment provided by Techcrane for Vessels
3&4. See Marr Dep., R. Doc. No. 33-1. at pp. 47-48, 54, 78-79; Marr Aff., R. Doc. No. 24-3;
Sanders Aff., R. Doc. No. 24-4, at ¶ 8 (“Techcrane absolutely was aware that the amount due to
KM would be based on the sale price of the equipment for these two liftboats.”); Shad Dep., R.
Doc. No. 33-2, at pp. 58-60 (“My understanding was that the 2 1/2 percent was going to be on
the equipment that I was building.”); Shad Aff., R. Doc. No. 33-3, at ¶ 6. Representatives of
Kennedy Marr, Levingston, and Techcrane all agree that this was their understanding at the time
of the agreement. See Marr Dep., R. Doc. No. 33-1. at pp. 47-48, 54, 78-79; Marr Aff., R. Doc.
No. 24-3; Sanders Aff., R. Doc. No. 24-4, at ¶ 8; Shad Dep., R. Doc. No. 33-2, at pp. 55-60;
Shad Aff., R. Doc. No. 33-3, at ¶ 6. Additionally, the parties repeatedly confirmed this
understanding through numerous email exchanges that took place over the course of a year. See
Marr Aff., R. Doc. No. 24-3 (authenticating email exchanges).
Techcrane has not shown that there are any genuine issues of material fact as to whether
it “clearly assumed the debt” of Levingston. See Park Towers, Inc., 8 F.3d at 310; Southland

11

Plumbing Supply, 542 So. 2d at 773-74. The formal requirements for assumptions of obligations
are satisfied by the handwritten note and the undisputed parol evidence that Techcrane agreed to
assume Levingston’s obligation to pay a 2.5% commission on the equipment side of the
transaction. See also Saul Litvinoff, 5 La. Civ. L. Treatise, Law of Obligations, at 10.12 (2d.
ed.) (“[T]he writing here discussed may be a very informal one, even a simple notice given to the
obligee by both the obligor and the third person, advising him that the latter has assumed the
obligation of the former.”). Accordingly, the assumption is not “void for want of form.”
II. The Marketing Agreement
Techcrane next argues that the assumption is only enforceable to the extent of
Levingston’s obligation to Kennedy Marr under the Marketing Agreement. See La. Civ. Code
art. 1822. Techcrane argues that under the express terms of the Marketing Agreement, Kennedy
Marr’s commission must be determined based on amounts “received by Levingston, or any of its
subsidiary, associated or affiliated companies.” Techcrane contends that the $16,645,626 it
received directly from the Buyers cannot generate a commission under the Marketing Agreement
because such amounts were not “received by Levingston, or any of its subsidiary, associated or
affiliated companies.”
Kennedy Marr responds that the parties agreed that the commission would be based on
amounts received by Levingston and its “alliance partners,” which it contends qualify as
“associated or affiliated” companies. Kennedy Marr contends that Techcrane should not be
permitted to avoid summary judgment by relying on a construction of the Marketing Agreement
that is at odds with the construction given by the agreement’s signatories. Kennedy Marr also
argues that Marr reached a specific oral agreement with Sanders that the commission for Vessels
3&4 would be determined based exclusively on amounts received by Techcrane.

12

A. “Subsidiary, Associated or Affiliated”
As a preliminary matter, the Court agrees with Techcrane that Techcrane is not a
“subsidiary, associated or affiliated compan[y]” of Levingston. “The words of a contract are to
be construed using their plain, ordinary and generally prevailing meaning, unless the words have
acquired a technical meaning.” Guidry v. Am. Public Life Ins. Co., 512 F.3d 177, 181 (5th Cir.
2007) (citing La. Civ. Code art. 2047). “Words of art and technical terms must be given their
technical meaning when the contract involves a technical matter.” La. Civ. Code art. 2047.
“Within the interpretive principle of La. C.C. art. 2047, a legal term can have a generally
prevailing meaning within the law that the parties to the contract can mutually intend to employ
for their contract.” Hoover Tree Farm, L.L.C. v. Goodrich Petro. Co., 63 So. 3d 159, 168-69 &
n.12 (La. Ct. App. 2d Cir. 2011).
As Techcrane notes, the phrase “subsidiary, associated or affiliated companies” employs
legal terms commonly used in business to denote companies related by a certain degree of
ownership and/or control. See Black’s Law Dictionary (9th ed.) (providing relevant definitions
for “subsidiary corporation” and “affiliate”). Cf. Braun v. Ins. Co. of N. Am., 488 F.2d 1066 (5th
Cir. 1974) (discussing the term “affiliate”); St. Paul Fire & Marine Ins. Co. v. Mayor’s Jewelers
of Fort Lauderdale, Inc., 465 F.2d 317 (5th Cir. 1972) (discussing the phrase “associated with”).
Kennedy Marr has come forward with no evidence that Levingston has any ownership interest in
Techcrane or that it otherwise exercised control over Techcrane. It is not entitled to summary
judgment on the ground that Techcrane is a “subsidiary, associated or affiliated compan[y]”
described in the Marketing Agreement.
B. Modification by Subsequent Oral Agreement

13

The Court nevertheless agrees with Kennedy Marr that the Marketing Agreement was
modified by a subsequent oral agreement. “Louisiana law provides that a court may, ‘in the
interest of justice,’ consider testimonial evidence ‘to prove that the written act was modified by a
subsequent and valid oral agreement.’” King v. Univ. Healthcare Sys., 645 F.3d 713, 719 (5th
Cir. 2011) (quoting La. Civ. Code art. 1848). “[M]odification can be presumed by silence,
inaction, or implication.” L & A Contracting Co., Inc. v. Ram Indus. Coatings, Inc., 762 So. 2d
1223, 1232 (La. Ct. App. 1st Cir. 2000). “It is a question of fact . . . as to whether there were
oral agreements that modified the written contract.” Pelican Elec. Contractors v. Neumeyer, 419
So. 2d 1, 5 (La. Ct. App. 4th Cir. 1982). “The party asserting modification of an obligation must
prove by a preponderance of the evidence facts or acts giving rise to the modification.” Big D
Dirt Servs. v. Westwood, Inc., 653 So. 2d 604 (La. Ct. App. 3d Cir. 1995) (citing La. Civ. Code
art. 1831).
This case presents an unusually compelling circumstance in which the interests of justice
strongly counsel in favor of considering undisputed testimonial evidence that a written act was
modified by a subsequent and valid oral agreement. The uncontroverted facts show that the
Marketing Agreement was specifically modified by a subsequent oral agreement between Marr
and Sanders that the commission would be determined based exclusively on amounts received
directly by Techcrane. See La. Civ. Code art. 1848. Marr explained that this arrangement
reflected an agreement with Sanders that was “slightly different” from the express terms of the
Marketing Agreement in order to accommodate the fact that the “structure changed . . . so that
the buyers were paying Techcrane directly.” Marr testified in his deposition as follows:
QUESTION: When Farhad advised you he would make payments
to you of the 2.5 percent that Levingston originally agreed to
make, did you understand that Farhad was agreeing to make those

14

payments on behalf of Levingston or on behalf of the alliance
partnership?
MARR: If you mean was that arrangement superseding what was
sort of in place under the general agreement, then yeah.47
***
QUESTION: The agreement . . . says you get 2.5 percent of the
total gross proceeds received by Levingston.
MARR: Yeah. That’s in the case that all the equipment stuff is
coming through Levingston essentially.
QUESTION: All right. So -MARR: When the structure changed or when it was done so that
the buyers were paying Techcrane directly, it was slightly -- you
know, handled in a slightly different way or it was agreed -QUESTION: It was agreed to be 2.5 percent of what?
MARR: On the value of the equipment which Techcrane was
supplying to the buyers.48
Marr further stated that, for Vessels 3&4, he specifically agreed to accept a commission
based exclusively on amounts received directly by Techcrane for the equipment side of the
transaction. Marr explained:
Essentially, if I understand it right, there’s two portions. One is the
equipment side of it, you know, Techcrane and EBI’s cranes and
jacking systems and stuff, the cost of that. And then the second
portion, which in the case of these hulls 3 and 4 was probably very
small, was Levingston’s fee or, you know, that sort of side of
things.
So actually what we were doing is accepting less than if it had
been done the normal way because there was nothing on that other
portion. When Sanders came along and said, “Look. Here’s the
deal. You’ll just get 2 1/2 percent on the equipment from

47

48

Marr Dep., R. Doc. No. 33-1, at p. 59.
Marr Dep., R. Doc. No. 33-1, at pp. 78-79.
15

Techcrane. Is that okay?” I said, “Yes.” Actually, that’s a
concession by us in the big picture.”49
Marr’s assertion that the oral agreement was actually a “concession” is supported by the
record. For Vessels 1&2, Marr stated that Levingston paid Kennedy Marr a commission of
approximately $600,000 based on “the equipment that was part of the deal and the whole design
project management, Ron Sanders, his own fee, whatever that was.” Marr Dep., R. Doc. No. 331, at pp. 35-37. Shad specifically testified in his deposition that Techcrane received payments
directly from Ezra for Vessels 1&2, albeit untimely payments. Shad Dep., R. Doc. No. 33-2, at
p. 44, lines 14-20; pp. 43-47.
Clearly then, notwithstanding the express terms of the Marketing Agreement, Levingston
paid Kennedy Marr a commission for Vessels 1&2 that was based, in part, on amounts received
directly by Techcrane. Even if that were not the case, however, Marr’s testimony demonstrates
that the agreement was specifically modified for Vessels 3&4 when Sanders “came along and
said, ‘Look. Here’s the deal. You’ll just get 2 1/2 percent on the equipment from Techcrane. Is
that okay?’ I said, ‘Yes.’” Marr Dep., R. Doc. No. 33-1, at p. 78.
In fact, representatives of Kennedy Marr, Levingston, and Techcrane have all agreed in
one form or another that this was their understanding of the agreement. Marr clearly testified
that Kennedy Marr was owed a commission based on the equipment provided by Techcrane. See
Marr Dep., R. Doc. No. 33-1, at pp. 47-49, 54, 78-79; Marr Aff., R. Doc. No. 24-3. Sanders’
affidavit shows that this was his understanding as well. See Sanders Aff., R. Doc. No. 24-4, at ¶
8. Shad similarly testified that Techcrane agreed to pay Kennedy Marr a 2.5% commission on
“the equipment that [he] was building,” and that his “understanding was that [he] was paying it
by instructions of Sanders to Kennedy Marr.” Shad Dep., R. Doc. No. 33-2, at pp. 55-56, 59-60;
49

Marr Dep., R. Doc. No. 33-1, at p. 78.
16

Shad Aff., R. Doc. No. 33-3, at ¶ 6. The parties repeatedly confirmed that understanding through
numerous email exchanges that took place over the course of a year. See Marr Aff., R. Doc. No.
24-3. Techcrane did not take Sanders’ deposition and explore this issue further; it cannot now
rest on the Marketing Agreement in an attempt to inject “metaphysical doubt” into the
uncontroverted evidence concerning the agreement between Shad, Sanders, and Marr. See Little
v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994). Techcrane has failed to show that
genuine issues of material fact exist with respect to the amount of the assumption.
III. Error and/or Fraud
Techcrane’s defense to the amount of the assumption is essentially a claim that its
consent was vitiated by error and/or fraud. See La. Civ. Code art. 1948, et seq. Techcrane
argues that Kennedy Marr, for “unknown” reasons, reached an “undisclosed agreement” to
induce Techcrane to pay an “inflated commission.”50 Techcrane claims that Kennedy Marr and
Levingston “set Techcrane up to pay a dramatically higher commission,” and that “this
substitution was intentional.”51

Techcrane argues that it never would have agreed to the

assumption if it had known that Levingston “grossly exaggerated the extent of its commission
responsibility to Kennedy Marr.”52
Techcrane did not raise the affirmative defenses of error and fraud in its pleadings.
“[U]nder Fifth Circuit law it is clear that an affirmative defense must, at minimum, provide
‘enough specificity or factual particularity to give the plaintiff “fair notice” of the defense that is
being advanced.’” United States v. Brink, No. 10-243, 2011 WL 835828, at *3 (S.D. Tex. Mar. 4,

50

R. Doc. No. 33, at p. 7.

51

R. Doc. No. 33, at p. 6.

52

R. Doc. No. 33, at p. 1.
17

2011) (Jack, J.) (quoting Woodfield v. Bowman, 193 F.3d 354, 362 (5th Cir. 1999)). “When
asserting fraud or mistake in counterclaims or affirmative defenses, the pleader must assert fraud
or mistake there with particularity.” Steven Baicker-McKee et. al., Federal Civil Rules
Handbook 374 (2012); see also Fed. R. Civ. P. 9(b); Siemens Med. Solutions USA, Inc. v. Sunrise
Med. Tech. Inc., No. 04-2711, 2005 WL 615747, at *4 (N.D. Tex. Mar. 16, 2005) (Sanders, J.)
(“Defendant’s affirmative defense of fraud is analyzed under the particularity requirement of
Rule 9(b).”); Cosmetic Warriors Ltd. v. Lush Boutique, L.L.C., No. 09-6381, 2010 WL 481229,
at *2 (E.D. La. Feb. 1, 2010) (Berrigan, J.) (same).

“At a minimum, Rule 9(b) requires

allegations of the particulars of time, place, and contents of the false representations, as well as
the identity of the person making the misrepresentation and what he obtained thereby.”
Benchmark Elec., Inc. v. J.M. Huber Corp., 343 F.3d 719, 724 (5th Cir. 2003). “Put simply, Rule
9(b) requires the complaint to set forth ‘the who, what, when, where, and how’ of the events at
issue.” Dorsey v. Portfolio Equities, Inc., 540 F.3d 333, 338-39 (5th Cir. 2008) (citing ABC
Arbitrage Plaintiffs Grp. v. Tchuruk, 291 F.3d 336, 350 (5th Cir. 2002)).
Techcrane raised four affirmative defenses in its answer. None of them alleged error or
fraud. Although Techcrane claims that it learned the facts underlying its claims of error and
fraud “a couple of days” before Shad’s deposition on March 20, 2013 when it received a copy of
the Marketing Agreement for the first time, see Shad Dep., R. Doc. No. 33-2, at 101, Techcrane
never filed a motion for leave to amend its answer to assert the affirmative defenses of error and
fraud. More importantly, even if properly raised, Techcrane has no evidence to support its
sweeping claims of fraud. Accordingly, Techcrane has waived the affirmative defenses of error
and fraud and, even if not waived, it has failed to demonstrate that genuine issues of material fact
preclude summary judgment.

18

IV. Levingston’s Alleged Breach of Contract
Techcrane’s final defense to Kennedy Marr’s principal demand is that Levingston failed
to satisfy its obligations to Techcrane under the assumption agreement. See La. Civ. Code art.
1822 (“The assuming obligor may raise any defense based on the contract by which the
assumption was made.”).

Techcrane contends that Levingston breached its “relationship-

management duty” and its duty to discharge its obligations in good faith by failing to act as an
intermediary to resolve Techcrane’s issues with the Buyers and by allowing the Buyers to use
Levingston’s patent to build Vessels 5&6 with equipment based on Techcrane’s designs.
The Louisiana Civil Code recognizes an implied obligation of good faith in all contracts.
See La. Civ. Code arts. 1759 and 1983. However, the Fifth Circuit has recognized that “[a]
breach of the duty of good faith and fair dealing requires a breach of a contract.” Schaumburg v.
State Farm Mut. Auto. Ins. Co. 421 F. App’x 434, 439 (5th Cir. 2011) (citing Barbe v. A.A.
Harmon & Co., 705 So. 2d 1210, 1220 (La. Ct. App. 4th Cir. 1998) and Fertel v. Brooks, 832
So. 2d 297, 306 n. 12 (La. Ct. App. 4th Cir. 2002)).
It is undisputed that Techcrane has been paid $16,645,626 for the equipment it provided
in connection with the sale of Vessels 3&4. As Kennedy Marr notes, Techcrane has not come
forward with evidence of any specific terms of its agreement with Levingston or how such terms
were breached. Shad’s statements that he “sensed very strongly” that Levingston breached an
amorphous “relationship-management duty” are nothing more than “conclusory allegations” and
“unsubstantiated assertions” that fail to raise a genuine issue of material fact. See Little v. Liquid
Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994); Clark v. America's Favorite Chicken Co., 110
F.3d 295, 297 (5th Cir. 1997) (“Unsupported allegations or affidavit or deposition testimony
setting forth ultimate or conclusory facts and conclusions of law are insufficient to defeat a

19

motion for summary judgment.”). Additionally, the fact that Levingston may have allowed the
Buyers to use a patent it rightfully owned for the construction of Vessels 5&6 does not
demonstrate a breach of contract or a lack of good faith with respect to the sale of Vessels 3&4.
Accordingly, Techcrane has not established that genuine issues of material fact with respect to
Levingston’s performance preclude summary judgment.
V. Affirmative Defenses
Techcrane asserted four affirmative defenses in its answer, which generally allege that:
(1) the agreement is void because plaintiff and others failed to act in good faith by
misappropriating Techcrane’s proprietary information; (2) the agreement is illegal and
unenforceable pursuant to law; (3) Techcrane relied upon plaintiff and others to act in good faith,
they did not act in good faith, and they breached their obligations to perform their contractual
obligations; and (4) plaintiff engaged in unfair trade practices, defamation of Techcrane, used
confidential and proprietary information inappropriately, and tortiously interfered with
Techcrane’s contractual arrangements.
Kennedy Marr argues that it is entitled to summary judgment with respect to Techcrane’s
first and third affirmative defenses because there is no evidence that Kennedy Marr failed to act
in good faith by misappropriating Techcrane’s proprietary information. Shad admitted in his
deposition that he has no evidence that Kennedy Marr failed to act in good faith or
misappropriated Techcrane’s proprietary information. see Shad Dep., R. Doc. No. 33-2, at pp.
93-94.

Techcrane has also failed to come forward with any evidence that Levingston

misappropriated Techcrane’s proprietary information. Having determined that the agreement is
also enforceable against Techcrane notwithstanding its unsubstantiated assertions that
Levingston failed to act in good faith, misappropriated Techcrane’s proprietary information,

20

and/or breached their contractual obligations, Kennedy Marr is entitled to summary judgment
with respect to Techcrane’s first and third affirmative defenses.
Kennedy Marr next argues that it is entitled to summary judgment as to Techcrane’s
second affirmative defense namely, that the agreement is illegal and unenforceable pursuant to
law. Although Kennedy Marr argued that “[w]ithout further facts, it’s impossible to know why
Techcrane thinks any of the underlying agreements are illegal,” Techcrane clarified that this
defense was based on its arguments regarding “the assumption’s vices of form and consent and
other grounds for unenforceability.” Having determined that the assumption is not void for want
of form, lack of consent, or other grounds for unenforceability, the Court agrees that Kennedy
Marr is entitled to summary judgment as to Techcrane’s second affirmative defense.
Finally, Kennedy Marr argues that there is no evidence supporting Techcrane’s fourth
affirmative defense. Techcrane does not oppose summary judgment with respect to its fourth
affirmative defense. The Court agrees that Techcrane has come forward with no evidence to
show that Kennedy Marr engaged in unfair trade practices, defamation, or tortious interference
with Techcrane’s contractual obligations.
VI. Attorney’s Fees
Kennedy Marr argues that it is entitled to attorney’s fees under the Louisiana open
account statute, La. Rev. Stat. Ann. § 9:2781, because Techcrane’s obligation “bears all of the
hallmarks of an open account.” Kennedy Marr contends that its invoice did not include a
specific term for payment and that it was based on an underlying agreement that was tied only to
a commission percentage. Kennedy Marr argues that it complied in full with the procedural
requirements of the statute and, as such, it should be awarded attorney’s fees under the statute.

21

Techcrane responds that the debt is derived from a contract rather than an open account
because it is based on a definite, contractually established commission. Techcrane argues that
the obligation does not bear the typical features of an open account because Kennedy Marr did
not extend a line of credit in return for its services and the obligation was not open to future
modification or ongoing debit and credit entries.
The Louisiana open account statute provides, in relevant part, as follows:
When any person fails to pay an open account within thirty days
after the claimant sends written demand therefor correctly setting
forth the amount owed, that person shall be liable to the claimant
for reasonable attorney fees for the prosecution and collection of
such claim when judgment on the claim is rendered in favor of the
claimant. Citation and service of a petition shall be deemed
written demand for the purpose of this Section.
La. Rev. Stat. Ann. § 9:2781A.
For the purposes of this Section and Code of Civil Procedure
Articles 1702 and 4916, “open account” includes any account for
which a part or all of the balance is past due, whether or not the
account reflects one or more transactions and whether or not at the
time of contracting the parties expected future transactions. “Open
account” shall include debts incurred for professional services,
including but not limited to legal and medical services. For the
purposes of this Section only, attorney fees shall be paid on open
accounts owed to the state.
La. Rev. Stat. Ann. § 9:2781D.
“Louisiana courts have defined an open account alternatively as ‘an account in which a
line of credit is running and is open to future modification because of expectations of prospective
business dealings.’ ” Ormet Primary Aluminum Corp. v. Ballast Technologies, Inc. 436 F.
App’x 297, 301 (5th Cir. 2011) (quoting Tyler v. Haynes, 760 So. 2d 559, 563 (La. Ct. App.
2000)). However, the Louisiana Supreme Court has explained that “[u]nder a plain reading of
that statute, there is no requirement that there must be one or more transactions between the
parties, nor is there any requirement that the parties must anticipate future transactions.” Id.
22

(quoting Frey Plumbing Co. v. Foster, 996 So. 2d 969, 972 (La. 2008)). The statute “must be
construed ‘strictly because the award of attorney fees is exceptional and penal in nature.’ ” Id.
(alteration omitted) (quoting Frank L. Beier Radio, Inc. v. Black Gold Marine, Inc., 449 So. 2d
1014, 1015-16 (La. 1984)).
A claim for breach of contract and a claim under the open account statute are considered
distinct causes of action. Cambridge Toxicology Grp. v. Exnicios, 495 F.3d 169, 174 (5th Cir.
2007) (citing Operational Tech. Corp. v. Envtl. Contractors, Inc., 665 So. 2d 14, 15 (La. Ct.
App. 1st. Cir. 1995)). Louisiana courts have considered several factors when determining
whether a course of dealings qualifies as an open account. As stated in Mid-S. Analytical Labs,
Inc. v. Jones, Odom, Spruill & Davis, LLP, 912 So. 2d 101, 107 (La. Ct. App. 2d Cir. 2005), a
few factors, which are “not wholly determinative, nor exclusive,” include whether “(1) the
services provided are performed over time involving various projects; (2) the total fee for the
services is left open; and (3) billing occurs on a regular basis by the provider of the professional
service by sending regular periodic invoices setting forth the amounts for the services performed,
e.g. monthly statements.” See also Ormet, 436 F. App’x at 301(“A hallmark of an open account
is that ‘[t]he total cost, unlike a contract, is generally left open or undetermined, although the rate
for specific services may be fixed, such as an hourly rate.’ ”). Other courts have balanced the
following four factors: (1) whether there were other business transactions between the parties;
(2) whether a line of credit was extended by one party to the other; (3) whether there are running
or current dealings; and (4) whether there are expectations of other dealings.” Cambridge
Toxicology Grp., 495 F.3d at 174 (citing Paz v. BG Real Estate Servs., Inc., 921 So. 2d 186, 188
(La. Ct. App. 4th Cir. 2005)). In these respects, courts have observed that “[a]n open account is
‘similar to a line of credit.’” Id. (quoting Hayes v. Taylor, 812 So. 2d 874, 878 (La. Ct. App. 3d

23

Cir. 2002)); see also Construction Testing Labs, Inc. v. Wal-Mart Stores, Inc., No. 08-0569,
2009 WL 2214678, 3 (W.D. La. 2009) (Hicks, J.) (noting that whether credit was extended is a
“key element”).
The Court agrees with Techcrane that its obligation to pay Kennedy Marr’s commission
is a contract as opposed to an agreement subject to the open account statute.

The only factor

indicating that Kennedy Marr’s claim may qualify as an open account is the fact that the ultimate
value of the 2.5% commission was unknown when the agreement was made in February of 2008.
It was not until July of 2010 that the amount of the commission could be determined based on
the ultimate sale price of the equipment. None of the other factors weigh in favor of finding an
open account. Although it attempted to recover the contract price on numerous occasions,
Kennedy Marr did not bill its services to Techcrane over time by sending regular periodic
invoices for installment payments. It also did not extend any credit to Techcrane. Moreover,
once Techcrane had completed the sale of the equipment to the Buyers, Kennedy Marr’s
commission was fixed and it became due as soon as Techcrane received payment from the
Buyers.

On balance, Techcrane’s obligation was not in the nature of an open account.

Accordingly, Kennedy Marr is not entitled to an award of attorney’s fees under La. Rev. Stat.
Ann. § 9:2781.
VII. Interest and Costs
Kennedy Marr argues that it is entitled to prejudgment interest running from July 12,
2011, the date its commission became ascertainable and due based on Techcrane’s receipt of
payment from the Buyers. As explained by the Fifth Circuit,
Louisiana substantive law presumes that interest will be awarded
on judgments, La. Civ. Code art 2000, and “a debt or claim for the
payment of money or damages under a contract is ascertainable
and becomes due on the date an active violation occurred or the
24

obligor was put in default, which can be earlier but never later than
judicial demand, and legal interest runs from that date.” Mini Togs
Products, Inc. v. Wallace, 513 So.2d 867, 873 (La.App.1987)
(citing Alexander v. Burroughs Corp., 359 So.2d 607, 613-14
(La.1978)).
St. Paul's Evangelical Lutheran Church v. Quick Response Restoration, Inc., 381 F. App’x 408,
412 (5th Cir. 2010) (unpublished). Techcrane has not opposed an award of prejudgment interest
and the Court finds that the calculation of interest suggested by Kennedy Marr is supported by
the law.53 The amount owed to Kennedy Marr became ascertainable and due no later than July
12, 2011 when Techcrane had received payment in full by the Buyers. See Shad Dep., R. Doc.
No. 33-2, at pp. 48-49, 51-52, 91. Kennedy Marr will also be allowed costs pursuant to Federal
Rule of Civil Procedure 54.
Conclusion
For the foregoing reasons,
IT IS ORDERED that plaintiff’s motion for summary judgment on its principal demand
plus interest and costs is GRANTED. Plaintiff’s claim for attorney’s fees is DENIED.
IT IS FURTHER ORDERED that plaintiff’s motion for partial summary judgment with
respect to defendant’s affirmative defenses is GRANTED.
IT IS FURTHER ORDERED that the above-captioned matter is DISMISSED WITH
PREJUDICE.
New Orleans, Louisiana, June 27, 2013.

LANCE M. AFRICK
UNITED STATES DISTRICT JUDGE
53

This Court ordered Techcrane to respond to Kennedy Marr’s request for attorney’s fees and prejudgment interest.
See R. Doc. No. 41. Techcrane opposed the request for attorney’s fees, but it did not respond to Kennedy Marr’s
request for prejudgment interest under Louisiana law. See R. Doc. No. 44.

25