Burgers v. Bickford et al

Filing 85

ORDER granting in part and denying in part 78 Motion for Summary Judgment. ORDERED that the Motion for Summary Judgment (Rec. Doc. 78) filed by Defendants GJBF, LLC and GJBFUF, LLC is GRANTED IN PART and DENIED IN PART. The motion is GRANTED insofar as Defendants GJBF, LLC and GJBFUF, LLC are entitled to summary judgment on Plaintiff's unjust enrichment claims. The motion is DENIED in all other respects. Signed by Judge Jay C. Zainey. (jrc)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
WILHELMUS BURGERS

CIVIL ACTION

VERSUS

NO: 12-2009

KENNETH W. BICKFORD, ET AL.

SECTION: "A" (1)

ORDER AND REASONS
Before the Court is a Motion for Summary Judgment (Rec. Doc.
78) filed by Defendants GJBF, LLC and GJBFUF, LLC.
Wilhelmus Burgers opposes the motion.

Plaintiff

The motion, set for hearing

on July 16, 2014, is before the Court on the briefs without oral
argument.1

For the reasons that follow, the motion is GRANTED IN

PART and DENIED IN PART.
I. BACKGROUND
Plaintiff alleges that in 2007, Defendants Kenneth Bickford and
William

Hindman

approached

him

seeking

loans

to

finance

the

construction of a mixed-use residential development project in
Tangipahoa Parish.

Plaintiff alleges that Bickford and Hindman

informed Plaintiff that Bickford and members of Bickford's immediate
family owned the land upon which the project would be constructed
and that Hindman was an experienced real estate developer who would
manage the project.

1

The Court notes Defendants' request for oral argument;
however, the Court has determined that oral argument is not
necessary in light of the issues presented.

In 2009, Plaintiff entered into a formal agreement to fund the
construction of the project. Plaintiff alleges that the contracting
parties agreed that Plaintiff's loan would be divided and separately
allocated

to

three

limited

liability

companies,

controlled

by

Kenneth Bickford and his two brothers, that possessed title to the
21.4 acres of land upon which the project would be constructed.2
Plaintiff claims that these three limited liability companies, in
turn, were to transfer title to the subject land to Defendant
Chappapeela Development Corporation upon execution of Plaintiff's
loans.

Ostensibly, the Chappapeela Development Corporation was

established as a corporate vehicle facilitating development of the
Project.
In conformity with the aforementioned factual allegations,
Plaintiff executed three promissory notes in favor of Defendants
NOKWB, LLC; NOCAB LLC; and NODAB LLC.

Plaintiff states that a

"Master Agreement, Development and Term Loan Agreement" executed by
Plaintiff and Defendants NOKWB, LLC; NOCAB LLC; and NODAB LLC was
incorporated into the promissory notes.
Plaintiff claims that as of November 2010, he had disbursed
$384,000.00 to the project and was repeatedly assured that the
project was progressing as planned. However, Plaintiff alleges that
his

review

of

the

project's

records

2

in

April

2012

revealed

The three limited liability companies named in Plaintiff’s
complaint are: NOKWB, LLC; NOCAB LLC; and NODAB LLC.
2

misappropriation of the project's assets, including the funds he
loaned for the project.

Plaintiff claims that Defendants' actions

therein directly contradicted prior verbal representations made to
him, as well as the formal documents and agreements he had relied
upon in contributing funds to the project.
On August 3, 2012, Plaintiff filed suit against Hindman,
Kenneth Bickford, the three Bickford brothers' LLCs that owned the
21.4 acre plot, as well as various legal entities formed to begin
development of the property. Plaintiff alleges causes of action for
breach

of

contract,

unjust

enrichment,

and

Louisiana Unfair Trade Practices Act ("LUTPA").
this

Court's

jurisdiction

over

all

the

violations

of

the

The sole basis of

claims

is

diversity

jurisdiction.
On June 26, 2013, by amended complaint, Plaintiff joined GJFB,
LLC and GJFBUF, LLC as Defendants, alleging causes of action against
these

parties

for

unjust

enrichment

and

violations

of

LUTPA.

Plaintiff also brought a revocatory action seeking rescission of the
cancellation of options to purchase certain land adjacent to the
21.4 acre plot.

Furthermore, Plaintiff filed a Notice of Pendency

of Action in Tangipahoa Parish covering certain land adjacent to the
21.4 acre plot.

This notice was the subject of the counterclaim

brought by GJFB, LLC and GJFBUF, LLC.
Defendants GJBF, LLC and GJBFUF, LLC are limited liability
companies whose membership is solely comprised of Jane Bickford, the

3

mother of Kenneth Bickford and the other Bickford brothers.

GJBF,

LLC owns a one-half undivided interest in the roughly 700 acres of
land adjacent to the 21.4 acre plot.

GJBFUF, LLC possesses a

usufruct over the one-half interest in the 700 acres, over which the
three

Bickford

brothers'

LLCs

each

have

one-sixth

undivided

interests.
In the instant motion, Defendants GJBF, LLC and GJBFUF, LLC
move

for

Summary

Judgment

on

all

of

Plaintiff's

claims

for

affirmative relief against them, as well as for Partial Summary
Judgment on their counterclaim, ordering Plaintiff to withdraw the
Notice of Lis Pendens filed against their property.
II. APPLICABLE LAW
Summary

judgment

is

appropriate

only

if,

"the

pleadings,

depositions, answers to interrogatories, and admissions on file,
together with affidavits, if any," when viewed in the light most
favorable to the non-movant, "show that there is no genuine issue as
to any material fact."3 A dispute about a material fact is "genuine"
if the evidence is such that a reasonable jury could return a
verdict for the non-moving party.4

Once the moving party has

initially shown "that there is an absence of evidence to support the

3

TIG Ins. Co. v. Sedgwick James, 276 F.3d 754, 759 (5th Cir.
2002) (citing Anderson v. Liberty Lobby, Inc., 447 U.S. 242,
249-50 (1986)).
4

Id. (citing Anderson, 477 U.S. at 255).
4

non-moving party's cause,"5 the non-movant must come forward with
"specific

facts"

Conclusional

showing

allegations

a
and

genuine

factual

denials,

issue

trial.6

for

speculation,

improbable

inferences, unsubstantiated assertions, and legalistic argumentation
do not adequately substitute for specific facts showing a genuine
issue for trial.7
III. DISCUSSION
a. Standing to Bring Claim under LUTPA
Defendants GJBF, LLC and GJBFUF, LLC seek summary judgment on
Plaintiff's LUTPA claims.

Defendants cite Fifth Circuit case law8

in which the Court held that LUTPA only provides protection to
consumers and business competitors.
Plaintiff

is

neither

an

individual

Defendants argue that since
consumer

nor

a

business

competitor, he lacks standing to bring LUTPA claims. In opposition,
Plaintiff argues that Defendants' standing argument is based on
outdated law, citing Cheramie Services, Inc. v. Shell Deepwater
Production, Inc., 35 So. 3d 1053 (La. 2010).
In Cheramie, three justices held that LUTPA standing is not
limited to direct consumers and competitors.

This decision, which

5

Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986).

6

Id. (citing Fed. R. Civ. P 56(e); Matsushita Elec. Indus.
Co. v. Zenith Radio, 475 U.S. 574, 587 (1986)).
7

Id. (citing SEC v. Recile, 10 F.3d 1093, 1097 (1993)).

8

See, e.g., Tubos de Acero de Mexico, S.A. v. Am. Int'l
Invest. Corp., 292 F.3d 471 (5th Cir. 2002).
5

would clearly give Plaintiff standing to sue under LUTPA, was a
plurality opinion but courts have followed it.9
Defendants argue that Cheramie is not binding because it did
not command a majority.

The Court does not agree with Defendants'

suggestion that this Court must simply ignore Cheramie in light of
its plurality status and default to older Fifth Circuit law on the
issue.

Defendants' position ignores the bedrock principles of Erie

v. Tompkins, 304 U.S. 64 (1938), which require a federal court
sitting in diversity to apply the law of the state as declared by
its legislature or the state's highest court.

Thus, for a federal

court the proper inquiry is not whether Cheramie is controlling
authority in light of its plurality status but rather how the
decision factors into the Erie "guess" that this Court must make
when applying state law.

In the realm of Erie, Cheramie is not

irrelevant even if the state's lower courts would consider it
non-binding.
In light of Cheramie, the Court finds that Plaintiff has
standing to bring his LUTPA claims.

The Court declines to address

the merits of Plaintiff's LUTPA claims against Defendants, as that
issue was not raised in Defendants' original motion and has not been
fully briefed.

The motion for summary judgment is DENIED as to

Plaintiff's LUTPA claims.
9

See, e.g, Inflatable Zoo, Inc. v. About to Bounce, LLC, No.
12-1709, 2013 WL 1558264 (E.D. La. Apr. 11, 2013) (Feldman, J.);
Harp v. Autrey, 121 So. 3d 1260 (La. App. 2nd Cir. 2013).
6

b. Unjust Enrichment Claims
Defendants GJBF, LLC and GJBFUF, LLC seek summary judgment on
Plaintiff's unjust enrichment claims.

Defendants argue that under

Louisiana law, the mere fact that Plaintiff has asserted causes of
action against them in addition to his unjust enrichment claims
precludes Plaintiff from asserting an unjust enrichment cause of
action.
Louisiana Civil Code Article 2298 provides that an unjust
enrichment claim "is subsidiary and shall not be available if the
law provides another remedy for the impoverishment or declares a
contrary rule."10

An unjust enrichment claim is only applicable to

fill a gap in the law where no express remedy is provided.11
Further, "[t]he mere fact that a plaintiff does not successfully
pursue another available remedy does not give the plaintiff the
right to recover under the theory of unjust enrichment."12
Plaintiff has not alleged that he is without any other remedy
at law, but rather has alleged a cause of action under LUTPA.

Since

Plaintiff is seeking remedies for his loss under other causes of
action,

10

he

is

precluded

from

asserting

claims

for

unjust

La. Civ. Code Ann. art. 2298.

11

Ames v. Ohle, 97 So. 3d 386, 392 (La. App. 4th Cir. 2012)
(citing Dugas v. Thompson, 71 So. 3d 1059, 1068 (La. App. 4th
Cir. 2011)).
12

Walters v. MedSouth Record Mgmt., LLC, 38 So. 3d 241, 242
(La. 2010).
7

enrichment.13

As a result, Defendants' motion is GRANTED as to

Plaintiff's unjust enrichment claims.
c. Revocatory Action
Defendants GJBF, LLC and GJBFUF, LLC seek summary judgment on
Plaintiff's revocatory action.

At the time Plaintiff agreed to

contribute his funds to the project, Defendants presented him with
three separate options to purchase the land adjacent to the 21.4
acre plot on which the development was to take place.

These options

were issued by GJBF, LLC and GJBUF, LLC to the Bickford brothers'
LLCs. Days before Plaintiff filed this lawsuit, Defendants executed
a

partial

cancellation

of

these

options

to

purchase,

which

Plaintiff's revocatory action seeks to rescind.
Plaintiff claims that the options to purchase were presented to
him

as

an

inducement

for

him

to

invest

in

the

residential

development. According to Plaintiff, the options were contributions
to the project by the Bickford family and were absolutely necessary
for the project to expand and become profitable in the long run.
Plaintiff alleges that the cancellation of the options was "in an
effort to avoid or limit payment of an ultimate Judgment in this
case and/or increase the insolvency of the defendants."14
Plaintiff's revocatory action is brought pursuant to Louisiana

13

See Marseilles Homeowners Condo. Ass'n, Inc. v. Broadmoor,
LLC, 111 So. 3d 1099, 1105-06 (La. App. 4th Cir. 2013).
14

Rec. Doc. 31, at ¶ 66(f).
8

Civil Code Article 2036, which provides that in a revocatory action,
the plaintiff must show that the alleged fraudulent act of the
defendant (1) occurred after their agreement was made and (2) that
the action caused or increased the defendant's insolvency.15
Defendants argue that Plaintiff cannot satisfy the second
element, since Defendants are not insolvent.

Defendants argue that

the Bickford brothers' LLCs have ownership interests in the property
at

issue

which

are

sufficient

to

return

the

$384,000.00

interest should Plaintiff be successful at trial.

plus

However, as

Plaintiff points out, he seeks damages in excess of the dollar value
of his loan, including actual damages of the amounts he would have
earned on the project if completed and treble damages under LUTPA.
A genuine issue of fact exists as to Defendants' solvency.

As

a result, Defendants' motion is DENIED as to Plaintiff's revocatory
action.
d. Lis Pendens
Defendants GJBF, LLC and GJBFUF, LLC seek partial summary
judgment on their counterclaim against Plaintiff.

Plaintiff has

filed a Notice of Pendency of Action in Tangipahoa Parish covering
the 21.4 acre plot, as well as the 704 acres of adjacent land.
Defendants' counterclaim seeks to remove the Lis Pendens filed
against the 704 acres only.

15

La. Civ. Code Ann. art. 2036; Traina v. Whitney Nat. Bank,
109 F.3d 244, 246 (5th Cir. 1997).
9

Louisiana Code of Civil Procedure Article 3751 states the
following:
The pendency of an action or proceeding in any court,
state or federal, in this state affecting the title to,
or asserting a mortgage or privilege on, immovable
property does not constitute notice to a third person not
a party thereto unless a notice of the pendency of the
action or proceeding is made, and filed or recorded, as
required by Article 3752.16
"The purpose of a notice of lis pendens is to give effective
notice to third persons of the pendency of litigation affecting
title to real property."17

"The notice of lis pendens is not

concerned with the merits of the litigation which prompted its
recordation."18
Defendants argue that Plaintiff's filing of the notice of lis
pendens against the 704 acres was improper since Plaintiff has not
been granted any interest in that land.

However, as previously

discussed, Plaintiff's revocatory action seeks to reinstate an
option to purchase the 704 acres, in favor of the Bickford brothers'
LLCs.

Further, Plaintiff has cited to the loan agreement he entered

into with the Bickford brothers' LLCs in which those companies grant
Plaintiff a security interest and lien in all general intangibles of

16

La. Code Civ. Proc. Ann. art. 3751.

17

United States v. Jefferson, 632 F. Supp. 2d 608, 614 (E.D.
La. 2009) (quoting Whitney Nat'l Bank v. McCrossen, 635 So.2d
401, 403 (La. App. 4th Cir. 1994)).
18

Whitney Nat'l Bank, 635 So.2d at 403 (citing Dane v.
Doucet Bros. Const. Co., Inc., 396 So. 2d 418, 420 (La. Ct. App.
1981)).
10

the

project,

including

all

"contract

rights"

of

the

project.

According to Plaintiff, the options to purchase were a key part of
the project, giving the project the ability to expand beyond the
original 21.4 acre plot.
The issue before the Court is whether Plaintiff's suit "affects
title" to the 704 acres within the meaning of Article 3751.
Court finds that it does.

The

As a result, the instant motion is DENIED

as to Defendants' counterclaim.
IV. CONCLUSION
Accordingly, and for the foregoing reasons;
IT IS ORDERED that the Motion for Summary Judgment (Rec. Doc.
78) filed by Defendants GJBF, LLC and GJBFUF, LLC is GRANTED IN PART
and DENIED IN PART.

The motion is GRANTED insofar as Defendants

GJBF, LLC and GJBFUF, LLC are entitled to summary judgment on
Plaintiff's unjust enrichment claims.

The motion is DENIED in all

other respects.
August 22, 2014
JAY C. ZAINEY
UNITED STATES DISTRICT JUDGE

11