MKM, L.L.C. v. Rebstock Marine Transportation, Inc.

773 So. 2d 776, 99 La.App. 1 Cir. 0431, 2000 La. App. LEXIS 2154, 2000 WL 1370743
CourtLouisiana Court of Appeal
DecidedSeptember 7, 2000
DocketNo. 99 CA 0431
StatusPublished
Cited by2 cases

This text of 773 So. 2d 776 (MKM, L.L.C. v. Rebstock Marine Transportation, Inc.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
MKM, L.L.C. v. Rebstock Marine Transportation, Inc., 773 So. 2d 776, 99 La.App. 1 Cir. 0431, 2000 La. App. LEXIS 2154, 2000 WL 1370743 (La. Ct. App. 2000).

Opinion

J^PETTIGREW, J.

This is a suit for declaratory judgment filed by plaintiffs who seek to determine their rights pursuant to a marine contract. The trial court determined that the contract was valid, enforceable, and had not been breached by plaintiffs. From this judgment, defendants now appeal. We affirm.

FACTS

In late 1995, the offshore oil industry was experiencing a significant downturn and many supply vessels were not working. Raymond Rebstock (“Mr. Rebstock”) was the president and majority stockholder of two corporations, each of which owned a 110-foot utility vessel. Rebstock Marine Transportation, Inc. (“Rebstock Marine”) was the owner of the MTV ELEANORA, which had not worked since March 1995. Rebco Marine, Inc. (“Reb-co”) was the owner of the MTV BOB R., described as a rusting, inoperable hulk that had been recovered and towed to dry dock after having been partially sunk in [778]*778February 1993. The MTV BOB R. remained idle at dry dock while Rebco litigated with the vessel’s hull insurer that had denied coverage for losses incurred as a result of the sinking.

In December 1995, Mr. Rebstock was approached by Tony Bruce (“Mr. Bruce”) who inquired whether Mr. Rebstock would be interested in leasing or possibly selling the M/V ELEANORA. On December 22, 1995, Mr. Rebstock, appearing on behalf of Rebstock Marine and Rebco, met with Messrs. Wiley Falgout (“Mr.Falgout”), Mr. Bruce and Aldon Wahl (“Mr.Wahl”), partners of MKM, L.L.C. (“MKM”) (collectively referred to as “plaintiffs”), at the office of their then-attorney, Wayne Le-Bouef (“Mr. LeBouef’).2 During the course of the meeting, Mr. Rebstock, unaided by legal counsel, negotiated the terms of an agreement with plaintiffs regarding the M/V ELEANORA and the M/V BOB R. Mr. LeBouef then proceeded to reduce to writing the agreement reached by the parties.

At the December 22, 1995 meeting, Mr. Rebstock (as president of Rebstock Marine and Rebco) and Mr. Falgout (as agent and CEO of MKM) signed a document styled, OPTION AGREEMENT ON PROPOSED “LEASE WITH OPTION TO PURCHASE” ON THE M/V 1 ¿‘ELEANORA” AND OPTION AGREEMENT ON PROPOSED PURCHASE OF THE M/V “BOB R.” Over the next several days, the parties executed a succession of similar agreements culminating in an agreement dated December 28,1995.

The document ultimately signed by Mr. Rebstock and Mr. Falgout on December 28, 1995, was styled, LEASE WITH OPTION TO PURCHASE ON THE M/V “ELEANORA” AND OPTION AGREEMENT ON PROPOSED PURCHASE OF THE M/V “BOB R.” The December 28, 1995 agreement acknowledged receipt of one hundred dollars cash consideration, and provided for the lease by MKM of the M/V ELEANORA (now the M/V COMMANDER) from Rebstock Marine for a period of sixty (60) months, at a charter hire rate of $2,500.00 per month. During the term of the lease, MKM was given the exclusive option to purchase the M/V ELEANORA from Rebstock Marine for $140,000.00, less the charter hire payments made as of that date. The agreement further provided as follows:

Contingent Right to Purchase M/V “Bob R.”. Prospective seller Rebco Marine, Inc. acknowledges that Lessee has additionally expressed an interest in the possible purchase of another vessel, specifically the M/V “Bob R.,” Official Number 631077, for the sum of $50,000. Various issues involving said vessel are currently in litigation which has to date been favorable to prospective seller Rebco Marine, Inc., specifically an affirming of a favorable trial court decision by the Louisiana First Circuit Court of Appeal. The defendant insurer has applied to the Louisiana Supreme Court via writ of certiorari. Should said litigation be finally and definitively resolved in favor of prospective seller Reb-co Marine, Inc. and Rebco Marine, Inc. be able to deliver a clear and merchantable title to Lessee, including a release of said vessel from its existing Community Bank of Lafourche mortgage, Lessee shall have sixty (60) days from receipt in writing from Rebco Marine, Inc., via certified mail, of final favorable disposition of the aforementioned litigation and Rebco Marine, Inc.’s providing Lessee with the requisite current U.S. Coast Guard Form CG-1332 (“General Index or Abstract of Title”) to purchase the M/V “Bob R[.]” for the sum of $50,000. Lessir [sic] warrants and represents that Community Bank of La-fourche agrees to release the M/V “Bob R.,” Official Number 631077, from any and all of prospective seller’s then indebtedness with said bank upon the [779]*779bank’s receipt of the aforementioned $50,000 purchase price.

Subsequent to the execution of the December 28, 1995 agreement, the offshore oil industry experienced enormous growth due to an oil boom. As a result, utility vessels such as the M/V ELEANORA and M/V BOB R. were in great demand. Correspondingly, the charter hire rate said vessels could generate increased dramatically. MKM took possession of the M/V ELEANORA and began making monthly lease payments to the bank in accordance with the agreement.

|4In late 1996 or early 1997, plaintiffs met with Mr. Rebstock and advised him that they intended to exercise their option to purchase the M/V BOB R. for $50,000.00. Mr. Rebstock purportedly indicated that he was going to try to avoid the agreement to transfer title of the M/V BOB R. Thereafter, Mr. Rebstock undertook the extensive repairs necessary to refurbish the M/V BOB R., which until this time, had been incurring docking and storage charges at Alied Shipyard in La-rose, Louisiana. On March 13, 1997, MKM received correspondence from Reb-' stock Marine and Rebco alleging that MKM was in default of the agreement for failure to make its lease payments on the M/V ELEANORA by the 10th of the month. Rebstock Marine and Rebco further demanded the return of the M/V ELEANORA and maintained that MKM was precluded from exercising its option to purchase the M/V ELEANORA and the M/V BOB R. due to this alleged breach. Rebstock Marine and Rebco also issued a Notice of Default and Termination of Lease Agreement and Options to Purchase based upon MKM’s purported failure to make its lease payment timely. Later, MKM received correspondence from the bank returning its March 12, 1997 lease check “at the direction of Rebstock.” Nevertheless, MKM continued to forward its monthly payments to the bank; however, these payments were returned each month.

On March 19, 1997, MKM filed a Petition for Declaratory Judgment seeking to enforce the terms and conditions of the December 28,1995 “Lease With Option To Purchase on the M/V ‘ELEANORA’ and Option Agreement on Proposed Purchase of the M/V ‘BOB R’ ” contract between MKM and Rebstock Marine and Rebco.

The insurance litigation relative to the earlier sinking of the M/V BOB R. was ultimately concluded in December 1997. See Rebco Marine, Inc. v. Homestead Insurance Company, 96-1975 (La.App. 1 Cir. 12/29/97), 706 So.2d 508. Nevertheless, neither Mr. Rebstock nor Rebco provided plaintiffs with written notice of the favorable disposition of the insurance litigation.

ACTION OF THE TRIAL COURT

Rebstock Marine and Rebco answered the instant suit and filed a reconventional demand seeking cancellation of the lease agreement, return of the M/V ELEANO-RA and damages as a result of MKM’s default. Thereafter, MKM filed a Motion For Summary | BJudgment or, in the alternative, motion for Temporary Restraining Order and Preliminary Injunction enjoining defendants and their representatives from seizing, repossessing or in any way affecting the operation of the M/V ELEANORA prior to the disposition of this matter.

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Bluebook (online)
773 So. 2d 776, 99 La.App. 1 Cir. 0431, 2000 La. App. LEXIS 2154, 2000 WL 1370743, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mkm-llc-v-rebstock-marine-transportation-inc-lactapp-2000.