Comtide Holdings, LLC v. Booth Creek Management Corp.

554 F. Supp. 2d 821, 2008 U.S. Dist. LEXIS 40786, 2008 WL 2138556
CourtDistrict Court, S.D. Ohio
DecidedMay 22, 2008
DocketCase 07-CV-1190
StatusPublished
Cited by5 cases

This text of 554 F. Supp. 2d 821 (Comtide Holdings, LLC v. Booth Creek Management Corp.) is published on Counsel Stack Legal Research, covering District Court, S.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Comtide Holdings, LLC v. Booth Creek Management Corp., 554 F. Supp. 2d 821, 2008 U.S. Dist. LEXIS 40786, 2008 WL 2138556 (S.D. Ohio 2008).

Opinion

OPINION & ORDER

ALGENON L. MARBLEY, District Judge.

I. INTRODUCTION

This matter is before the Court on Defendant Booth Creek Management’s (“Booth Creek”) Motion to Dismiss Plaintiff Comtide Holdings, LLC’s, (“Comtide”) complaint. Comtide brought a breach-of-contract action for a broker’s fee in Booth Creek’s acquisition of an auto dealership. For the reasons set forth below, the Court GRANTS Booth Creek’s Motion to Dismiss.

II. BACKGROUND

On March 9, 2005, J. Daniel Schmidt contracted with Booth Creek, a holding company for the interests of the Gillett family, to identify auto dealerships for Booth Creek’s acquisition. Booth Creek agreed to pay Schmidt five percent of the purchase price for this service. Schmidt duly introduced Booth Creek to Berlin City, a New England dealership, and protracted negotiations ensued. The contract between Schmidt and Booth Creek expired on March 9, 2006. On August 1, 2007, Booth Creek purchased Berlin City for *824 $86,000,000. Schmidt demanded a broker’s fee of $4,300,000. Booth Creek refused. Schmidt assigned his contractual rights to his limited liability corporation, Comtide, which initiated this action in Ohio state court. Booth Creek removed the case to this Court and now moves to dismiss the complaint.

III. STANDARD OF REVIEW

In adjudicating a Rule 12(b)(6) motion to dismiss, this Court is limited to evaluating whether the complaint sets forth allegations sufficient to make out the elements of a cause of action. Windsor v. The Tennessean, 719 F.2d 155, 158 (6th Cir.1983). The Court must “construe the complaint in the light most favorable to the plaintiff, accept its allegations as true, and draw all reasonable inferences in favor of the plaintiff.” Directv, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir.2007). Although liberal, this standard of review “requires more than labels and conclusions.” Bell Atl. Corp. v. Twombly, — U.S. -, 127 S.Ct. 1955, 1964-65, 167 L.Ed.2d 929 (2007). A “formulaic recitation of the elements of a cause of action will not do.... ” Id. Rather, a plaintiffs factual allegations must “raise a right to relief above the speculative level.” Id. at 1974.

IV. LAW & ANALYSIS

Comtide asserts five claims in its complaint: (1) breach of contract; (2) breach of fiduciary duty; (3) entitlement to equitable relief; (4) fraud; and (5) reformation. Booth Creek moves to dismiss the complaint on the grounds that Schmidt was only entitled to a broker’s fee so long as Booth Creek closed the deal within twelve months of the expiration of the agreement. It did not. Therefore, Booth Creek argues that the contract precludes Comtide’s claims. 1

A. BREACH OF CONTRACT

The interpretation of a clear and fully integrated contract is a matter of law. First Fed. Sav. & Loan Assn. v. Cheton & Rabe, 57 Ohio App.3d 137, 567 N.E.2d 298, 301 (Ohio Ct.App.1989) (citing Inland Refuse Transfer Co. v. Browning-Ferris Ind. of Ohio, 15 Ohio St.3d 321, 474 N.E.2d 271, 272 (Ohio 1984)). The Court must defer to the express terms of an unambiguous instrument and interpret it according to its plain, ordinary, and common meaning. Nationwide Mut. Fire Ins. Co. v. Guman Bros. Farm, 73 Ohio St.3d 107, 652 N.E.2d 684, 685 (Ohio 1995). As a result, the Court must not travel beyond the contract’s four corners to determine the rights and obligations of the parties. Seringetti Constr. Co. v. City of Cincinnati, 51 Ohio App.3d 1, 553 N.E.2d 1371, 1373 (Ohio Ct.App.1988).

The contract at issue is perfectly clear. The “Closing Clause” provides:

CLOSING. Broker shall receive reasonable notice of closing. The BROKER’S fee ... is payable in full to the BROKER only upon closing ... and payment of the consideration to the SELLER, and the BROKER shall be paid his fee when such consideration is paid, if BUYER buys from, invests in, or manages operations for any SELLER during the term of this agreement, or within twelve (12) months after the termination of this agreement....

(Buyer’s Broker Agreement, § 5) (emphasis added). The Closing Clause has two notable conditions. The broker’s fee is payable: (1) only upon closing, (2) so long as Booth Creek closes the deal during the *825 term of the agreement or within twelve months of its expiration. Booth Creek purchased Berlin City in August 2007, seventeen months after the expiration of the contract. By the unambiguous terms of the agreement, Comtide is therefore not entitled to a broker’s fee.

Comtide counters that the contract is ambiguous and thus not subject to interpretation as a matter of law. Specifically, Comtide argues that Schmidt’s right to a commission vests not upon closing but when Booth Creek “buys [a dealership] from ... any SELLER during the term of this agreement, or within twelve (12) months after the termination of this agreement.” (Buyer’s Broker Agreement, § 5) (emphasis added). Comtide contends that “buys from” is subject to various inteipre-tations. For example, Booth Creek could “buy [a dealership] from” Berlin City when the parties agree to a price or when they substantially complete negotiations. Com-tide alleges that Booth Creek and Berlin City agreed upon all material terms of the acquisition, including the price, in 2005, well before the expiration of the agreement. Because the closing of the deal is only one of several ways to interpret “buys from,” Comtide concludes that the ambiguity of the contract precludes judgment as a matter of law.

Despite Comtide’s attempt to muddy the interpretive waters, the agreement could not be clearer. The Closing Clause states in no uncertain terms that “[t]he broker’s fee ... is payable in full to the broker only upon closing,” not after substantial negotiations nor upon an agreement to agree as Comtide suggests. Id. (Emphasis added). Even the title of the clause, “CLOSING,” indicates that Schmidt’s right to a finder’s fee vests upon consummation of the deal and not before. Id. As if to reiterate this condition, the contract provides that the broker fee “shall be paid when such consideration is paid” from buyer to seller. Id.

Consider the following hypothetical.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Berger Enterprises v. Zurich American Insurance
845 F. Supp. 2d 809 (E.D. Michigan, 2012)
Pasqualetti v. Kia Motors America, Inc.
663 F. Supp. 2d 586 (N.D. Ohio, 2009)
MMK GROUP, LLC v. SheShells Co., LLC
591 F. Supp. 2d 944 (N.D. Ohio, 2008)

Cite This Page — Counsel Stack

Bluebook (online)
554 F. Supp. 2d 821, 2008 U.S. Dist. LEXIS 40786, 2008 WL 2138556, Counsel Stack Legal Research, https://law.counselstack.com/opinion/comtide-holdings-llc-v-booth-creek-management-corp-ohsd-2008.