Falcone v. Altarock Energy, Inc.

Filing 30

ORDER denying Defendant's 20 Motion for Summary Judgment, by Judge Richard A Jones. (SWT)

THE HONORABLE RICHARD A. JONES

1
2
3
4
5
6
7

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

8
9
10

DOMENIC J. FALCONE,
NO. 2:16-cv-00622-RAJ
Plaintiff,

11
12
13

vs.

ORDER

ALTAROCK ENERGY, INC.,

14

Defendant.

15
16

This matter comes before the Court upon Defendant AltaRock Energy, Inc.’s

17

Motion for Summary Judgment. Dkt. # 20. Plaintiff Domenic Falcone opposes the

18

motion. Dkt. # 24. For the reasons that follow, the Court DENIES the motion.

19

I.

BACKGROUND

20

Plaintiff entered into a consulting relationship with Defendant for the purpose

21

of providing “business advisory services.” Dkt. # 21-1. According to the parties’

22

Agreement, Defendant agreed to pay Plaintiff both a monthly retainer as well as a

23

success fee. Id. at p. 9. The success fee was to be paid “[u]pon the closing of a

24

transaction where [Plaintiff] has played a significant role in both introducing the party

25

to [Defendant] and in facilitating the negotiations of the transaction.” Id.

26

In November 2013, Plaintiff facilitated a negotiation between Defendant and
Blue Mountain Power, LLC. Dkt. # 21-2. The parties drafted a binding term sheet in
ORDER - 1

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26

which Defendant would purchase a company that indirectly owned a geothermal
power project. Id. The purpose of the transaction was for Defendant to own “all of
the equity interests of the” company. Id. The parties terminated the negotiations, and
in January 2014, Defendant ended its relationship with Plaintiff. Dkt. # 21 (Mandell
Decl.) at ¶¶ 3-4. However, in early 2015, Defendant executed an agreement to
purchase 100% of the equity in the company that owned the geothermal power project.
Id. at ¶¶ 6-7. On May 13, 2015, the deal closed. Id. at ¶ 7. The final agreement
contains many similarities to the unsuccessful term sheet drafted during Plaintiff’s
tenure as Defendant’s consultant. Accordingly, Plaintiff sued Defendant for a success
fee. In its motion for summary judgment, Defendant counters that Plaintiff is barred
from suing for such a fee due to Washington’s Real Estate Brokers and Salesperson
Act, codified at Chapter 18.85 in Title 18 of the Revised Code of Washington.
II.

LEGAL STANDARD

Summary judgment is appropriate if there is no genuine dispute as to any
material fact and the moving party is entitled to judgment as a matter of law. Fed. R.
Civ. P. 56(a). The moving party bears the initial burden of demonstrating the absence
of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
Where the moving party will have the burden of proof at trial, it must affirmatively
demonstrate that no reasonable trier of fact could find other than for the moving party.
Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007). On an issue
where the nonmoving party will bear the burden of proof at trial, the moving party can
prevail merely by pointing out to the district court that there is an absence of evidence
to support the non-moving party’s case. Celotex Corp., 477 U.S. at 325. If the
moving party meets the initial burden, the opposing party must set forth specific facts
showing that there is a genuine issue of fact for trial in order to defeat the motion.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). The court must view the
ORDER - 2

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

evidence in the light most favorable to the nonmoving party and draw all reasonable
inferences in that party’s favor. Reeves v. Sanderson Plumbing Prods., 530 U.S. 133,
150-51 (2000).
However, the court need not, and will not, “scour the record in search of a
genuine issue of triable fact.” Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir. 1996);
see also White v. McDonnell-Douglas Corp., 904 F.2d 456, 458 (8th Cir. 1990) (the
court need not “speculate on which portion of the record the nonmoving party relies,
nor is it obliged to wade through and search the entire record for some specific facts
that might support the nonmoving party’s claim”). The opposing party must present
significant and probative evidence to support its claim or defense. Intel Corp. v.
Hartford Accident & Indem. Co., 952 F.2d 1551, 1558 (9th Cir. 1991).
Uncorroborated allegations and “self-serving testimony” will not create a genuine
issue of material fact. Villiarimo v. Aloha Island Air, Inc., 281 F.3d 1054, 1061 (9th
Cir. 2002); T.W. Elec. Serv. V. Pac Elec. Contractors Ass’n, 809 F. 2d 626, 630 (9th
Cir. 1987).
III.

DISCUSSION

A. The Court will not add “business opportunities” to RCW 18.85.011(16).
In its motion, Defendant relies on RCW 18.85.331 to argue that Plaintiff may
not collect his success fee. See, generally, Dkt. # 20. In relevant part, RCW 18.85.331
provides that:

21

No suit or action shall be brought for the collection of

22

compensation as a real estate broker, real estate firm,

23

managing broker, or designated broker, without alleging

24

and proving that the plaintiff was a duly licensed real

25

estate broker, managing broker, or real estate firm before

26

the time of offering to perform any real estate transaction
ORDER - 3

1

or procuring any promise or contract for the payment of

2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26

compensation for any contemplated real estate transaction.
Wash. Rev. Code Ann. § 18.85.331 (West). According to the Code, real estate
brokers, real estate firms, managing brokers, and designated brokers perform “real
estate brokerage services.” RCW 18.85.011(2), (10), (14), (17). “Real estate
brokerage services” include a litany of services related to real estate “offered or
rendered directly or indirectly to another, or on behalf of another for compensation or
the promise or expectation of compensation . . . .” RCW 18.85.011(16).
Defendant argues that the Code’s definition of “real estate brokerage services”
previously included the purchase of “business opportunities” as a brokerage service
and therefore the Court should continue to read this into the current version of the
provision. Dkt. # 20 at p. 6. However, the legislature revised this Code section in
2010 such that “business opportunities” is no longer included within the definition of
“real estate brokerage services.” Compare RCW 18.85.010 with RCW 18.85.011.
Defendant relies on outdated case law and secondary sources, as well as two separate
and distinct provisions within Chapter 18.85 to conclude that the legislature did not
intend to remove the “business opportunities” language from section 18.85.011(16).
Id. at pp. 6-8.
The statute that Defendant relies upon—RCW 18.85.331—is not ambiguous;
neither are the defined terms as they appear in RCW 18.85.011. “When a statute is
unambiguous, it is not subject to judicial construction and its meaning must be derived
from the plain language of the statute alone.” State v. Sullivan, 19 P.3d 1012, 1019
(Wash. 2001); see also Barnhart v. Walton, 535 U.S. 212, 217 (2002) (“This Court has
previously said that, if the statute speaks clearly ‘to the precise question at issue,’ we
‘must give effect to the unambiguously expressed intent of Congress.’”) (internal
citations omitted).
ORDER - 4

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26

The plain language of the statute is not at issue here. Indeed, Defendant does
not dispute that the statute is clear, but rather presses the Court to include language
that the legislature deliberately removed. Defendant appears to suggest that the
legislature would not remove “business opportunities” from one provision within
section 18.85.011 without removing it entirely from the Chapter. Dkt. # 20 at p. 6. In
doing so, Defendant ignores that the legislature was aware of “business opportunities”
as it had drafted that term throughout this section and therefore acted deliberately
when it removed “business opportunities” from the definition of “real estate brokerage
services.” Whitfield v. U.S., 543 U.S. 209, 216 (2005) (“As the Government points
out, Congress has included an express overt-act requirement in at least 22 other current
conspiracy statutes, clearly demonstrating that it knows how to impose such a
requirement when it wishes to do so.”). The Court will not accept Defendant’s
invitation to rewrite the statute. Cerrillo v. Esparza, 142 P.3d 155, 158 (Wash. 2006)
(“Courts may not read into a statute matters that are not in it and may not create
legislation under the guise of interpreting a statute”) (internal quotations and citations
omitted); Sullivan, 19 P.3d at 1019 (“We do not add to or subtract from the clear
language of a statute unless that is imperatively required to make the statute
rational.”).
B. Mr. Falcone’s activities do not fall within the scope of RCW 18.85.011(16).
In the alternative, Defendant argues that Plaintiff’s actions fall within the scope
of “any real property interest therein,” which Defendant describes as a “catch-all”
provision. Dkt. # 20 at p. 7. Defendant states, “the Legislature intended the statute to
cover any type of transaction in which an interest of real property s involved.” Id.
(emphasis in original). However, Defendant offers no support for this dramatic
reading of RCW 18.85.011(16). The Court reiterates that this statute is unambiguous;
the statute applies only to actions involving “real estate, or any real property interest
ORDER - 5

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19

therein.” RCW 18.85.011(16). Rather than acting as a catch-all for even those
transactions with attenuated real estate interests, the Court finds that the “real property
interest therein” is merely a catch-all for the immediately preceding term “real estate.”
Jarecki v. G. D. Searle & Co., 367 U.S. 303, 307 (1961) (“The maxim noscitur a
sociis, that a word is known by the company it keeps, while not an inescapable rule, is
often wisely applied where a word is capable of many meanings in order to avoid the
giving of unintended breadth to the Acts of Congress.”).
“Real property interest therein” does not include sales of equity interests. The
Court finds support for this narrower reading of RCW 18.85.011(16) in the cases cited
by Defendant; transactions involving equity interests or sales of capital stocks were
considered “business opportunities,” which are transactions that the legislature
specifically omitted from the scope of this provision. See, e.g., Springer v. Rosauer,
641 P.2d 1216 (Wash. Ct. App. 1982); Schmitt v. Coad, 604 P.2d 507 (Wash. Ct. App.
1979). Here, the transactions at issue involved the sale of equity interests; any real
property interests are too attenuated to fall within the gambit of RCW 18.85.011(16).
See Dkt. # 21 (Mandell Decl.) at ¶¶ 3-8, Exs. 2-5.
IV.

CONCLUSION

For all the foregoing reasons, the Court DENIES Defendant’s motion for
summary judgment. Dkt. # 20.

20
21

Dated this 7th day of April, 2017.

22

24

A

25

The Honorable Richard A. Jones
United States District Judge

23

26

ORDER - 6