Newland Resources, LLC v. Branham Corp.

918 N.E.2d 763, 2009 Ind. App. LEXIS 2850, 2009 WL 5173523
CourtIndiana Court of Appeals
DecidedDecember 31, 2009
DocketNo. 06A01-0802-CV-79
StatusPublished
Cited by26 cases

This text of 918 N.E.2d 763 (Newland Resources, LLC v. Branham Corp.) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Newland Resources, LLC v. Branham Corp., 918 N.E.2d 763, 2009 Ind. App. LEXIS 2850, 2009 WL 5173523 (Ind. Ct. App. 2009).

Opinion

OPINION

FRIEDLANDER, Judge.

Newland Resources, LLC (Newland) appeals from the trial court's judgment on the jury's verdiet in favor of The Branham Corporation (Branham) on Branham's breach of contract claim against Newland. Broadly speaking, the following issue is presented for our review: Did the trial court err in its interpretation of the contractual provisions triggering the entitlement to and calculation of a success fee?

We affirm.

[767]*767Newland was organized on October 11, 1994 and originally formed to develop real estate. Sometime in 1992 or 1993, prior to its organization, Newland began to explore a possible development project in Boone County consisting of 270 acres at the intersections of State Road 334 and I-65 now known as Royal Run Subdivision. New-land considered several options for water and sewer utility service to its residential subdivision in the Royal Run area before ultimately forming a wholly-owned utility operating company in April 1996 known as Boone County Utilities, LLC, (BCU). BCU was to provide water and sewer utilities to the Royal Run area.

Newland entered into an agreement with Branham (the Branham Agreement) for assistance in negotiating a contract with the City of Indianapolis for the acceptance of sewage flow from the BCU service area, and in negotiating a contract with the Indianapolis Water Company for selling water to BCU for delivery to the BCU service area. The Branham Agreement contained the following compensation provision:

5. Compensation
Client shall:
(a) pay Branham a monthly, nonrefundable retainer of $3,000.00 ("Monthly Fee") commencing on the Effective Date and terminating when all services necessary to obtain the goals and objectives of this Agreement have been achieved as determined in the sole discretion of the Client; provided however, if this Agreement is executed on a day other than the first day of any month then the Monthly Fee shall be prorated by dividing the Monthly Service Fee by the total number of days in the commencement month and multiplying the resulting quotient by the remaining days in the commencement month;
(b) reimburse Branham reasonable out of pocket expenses upon receipt of Branbham's invoice in accordance with Client's policy for travel, and long distance communications, such expenses to be supported by receipts or other proof of expenditures; and
(e) pay Branham a success fee calculated as follows upon the earlier of:
(i) 8% of the fair market value of the total ownership interest in BCU as may be determined by a qualified appraiser as mutually agreed upon by the Parties in excess of Three Million Five Hundred Thousand Dollars not later than five years from the first receipt of any utility service fee by BCU; provided however, in the event the Parties do not mutually agree upon a qualified appraiser, then each Party shall select its own appraiser who shall perform their own appraisals and who in turn shall select a third appraiser and the fair market value of the total ownership interest in BCU shall be determined by . averaging the three appraisals; or
(i) 8% of the total purchase price of BCU in any sale thereof to a third party in excess of Three Million Five Hundred Thousand Dollars.

Appellant's Appendix at 68.

BCU entered into a purchase agreement with the Town of Whitestown (the Whites-town Purchase Agreement) on February 11, 2004. Article I, 1.8, of the Whitestown Purchase Agreement defined the term "Purchased Assets" as:

(a) the Newland Real Estate and all of the tangible and intangible assets, properties, rights, or interests of every kind and description, whether real, personal, or mixed, that are owned, held, leased, [768]*768licensed, or used by BCU in the operation of the Utilities, including but not limited to contract rights, prepaid insurance, prepaid insurance premiums, any other prepaid assets, goodwill, intellectual property rights, software, vehicles, and customer information, and
(b) all easements, rights-of-way, and rights of ingress or egress, whether now or hereafter in existence, currently utilized, necessary, proper, or desirable, for the installation, operation, construction, and maintenance of the Utilities.

Id. at 724. Article III of the Whitestown Purchase Agreement provided that Whitestown would transfer to BCU $4,200,000 at closing. Id. at 728. Article II, 2.4, of the Whitestown Purchase Agreement further provided in pertinent part:

In addition to the Purchased Assets, on and after the Closing Date, Whitestown shall assume the following:
(i) the obligations of BCU to Valenti Held Real Estate Group, LLP, as set forth on the attached Schedule 2.4), which obligations will be assumed pursuant to a Novation and Substitution Agreement, to be negotiated between Whitestown, BCU, and Valenti Held Real Estate Group, LLP; and
(ii) the obligations of BCU pursuant to those agreements set forth on the attached Schedule 2.4(h); provided, however, that Whitestown shall not assume BCUs obligation to pay any funds pursuant to any recoupment agreements listed on Schedule 24) to the extent BCU received such funds prior to the Closing of this transaction; and no other obligations.

Id. at 727-28.

BCU (debtor) ultimately filed a petition for Chapter 11 bankruptey (the Bankruptcy Matter). Valenti Held Real Estate Group, LLP (Valenti) was a named creditor and interested party in the Bankruptcy Matter. In addition to the Bankruptcy Matter, there was a matter pending before the Indiana Utility Regulatory Commission (IURC) relating to the continued operation of BCU (the IURC Matter). Valenti claimed that the order issued by the IURC in the IURC Matter entitled Valenti to refunds of $1,748,678.38 (Refund Claim) and Valenti claimed and certified in the Bankruptcy Matter that it was entitled to an additional $2,478,496.00 (Certified Claim) in reimbursement for sewer and water facilities previously constructed and dedicated to BCU. Valenti's Refund Claim and Certified Claim totaled $4,222,174.33.

On February 11-12, 2004, Whitestown, BCU, and Valenti entered into a Novation and Substitution Agreement (the Novation Agreement) that provided that Whitestown would pay Valenti a cash amount of $900,000.00 and Whitestown would issue a Series B Junior Bond (Valenti Bond) for $3,822, 175.00. The Novation Agreement was conditioned upon approval by the Bankruptey Court in the Bankruptcy Matter and any other regulatory approval of the Novation Agreement and the Purchase Agreement. Upon such approval, Valenti agreed that the Whitestown obligations under the Novation Agreement operated as a novation and substitution of any and all obligations of BCU under prior agreements.

BCU, Debtor, filed in the Bankruptcy Court a Disclosure Statement Relating To Debtor's Amended Liquidating Plan of Reorganization (Disclosure Statement) and an Amended Liquidating Plan of Reorganization (Amended Plan). The Disclosure Statement and the Amended Plan established that Whitestown would pay $4,200,000.00 to BCU, and would pay $4,222,175.00 to Valenti to resolve BCU's obligations to Valenti. A Motion to Sell was submitted to the Bankruptey Court seeking approval for the sale of BCU to [769]*769Whitestown.

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Cite This Page — Counsel Stack

Bluebook (online)
918 N.E.2d 763, 2009 Ind. App. LEXIS 2850, 2009 WL 5173523, Counsel Stack Legal Research, https://law.counselstack.com/opinion/newland-resources-llc-v-branham-corp-indctapp-2009.