Rogers v. Brooks

122 F. App'x 729
CourtCourt of Appeals for the Fifth Circuit
DecidedDecember 22, 2004
Docket04-30141
StatusUnpublished
Cited by6 cases

This text of 122 F. App'x 729 (Rogers v. Brooks) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rogers v. Brooks, 122 F. App'x 729 (5th Cir. 2004).

Opinion

PER CURIAM: **

In this case, one party to contract negotiations alleges that those negotiations led to a final agreement for the sale of an oil company. Because the district court correctly concluded that these negotiations never resulted in an enforceable contract and that there are no alternative ways to enforce the alleged promise, we affirm.

Background Facts and Procedural History

Appellees Robert Brooks (“Brooks”), his wife Lynda Brooks, and their son David Brooks own Oracle Oil, L.L.C., a Louisiana oil company. In the fall of 2002, Appellant Courtney Rogers offered $100,000 to buy Oracle’s leases, which Brooks had placed for sale at an auction. Brooks rejected this offer. Later, Rogers offered $150,000 for the leases and some equipment (such as a backhoe and a tractor) that had been excluded from the original auction package. This offer, too, was rejected. Rogers then made a second $150,000 offer for the leases, this time excluding the equipment. 1 Brooks agreed to this price. According to Brooks, Rogers then discovered that transferring the leases would cause him to incur significant regulatory fees. Rogers asked Brooks to consider selling him all the membership interest in the company, instead of the leases, to avoid these fees. Brooks agreed to consider this request. The parties continued to negotiate, but the negotiations fell apart over a dispute concerning December operating expenses. Finally, in December 2002, Rogers offered Brooks $141,000 2 for all the interest in Oracle, minus a tractor and mower. Brooks agreed to this price, and the parties agreed that Rogers’s lawyers would draft written sale documents.

Rogers’s lawyers forwarded the written agreement, called the Unit Purchase Agreement, to Brooks. Brooks found several of the terms unreasonable. In particular, Brooks objected to the warranties 3 *731 contained in the written agreement because the parties had discussed an as-is sale. Claiming that his decision was due to these warranties, Brooks did not sign the Unit Purchase Agreement and refused to negotiate further with Rogers. 4

Following this refusal, Rogers sued Brooks, Lynda Brooks, and David Brooks in the Middle District of Louisiana. The suit included claims for breach of the written Unit Purchase Agreement, along with claims for detrimental reliance, negligent misrepresentation, wrongful conduct, unjust enrichment, and unfair trade practices. Notably, the complaint did not refer to an oral contract. Almost immediately, the Brooks Defendants moved for summary judgment. In his response, Rogers contended for the first time that Brooks had breached an oral agreement to sell the Oracle interest for $141,000.

The district court granted the Brooks Defendants’ motion, ruling that “no valid contract was entered into between the parties in this case.” Further, the court determined that “there is no dispute that a contract was never agreed upon or reduced to writing.” The district court entered judgment, and Rogers timely filed a notice of appeal.

Because the district court decided this case on a motion for summary judgment, we review its decision de novo. Am. Home Assurance Co. v. United Space Alliance, LLC, 378 F.3d 482, 486 (5th Cir. 2004). Summary judgment is appropriate when no genuine issues of material fact remain and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c).

Breach of Contract

Although Rogers originally sued to enforce the Unit Purchase Agreement, he now contends that Brooks breached an oral agreement. Because of this contention, we must first address whether an oral contract would be enforceable. Here, the enforceability of an oral contract depends upon two issues. The first is whether, under Louisiana law, this general type of contract must be in writing. The second issue is whether this particular contract had to be written because the parties intended it to be in writing.

Rogers contends that, although a sale of an oil and gas lease must be in writing, the sale of interest in a limited liability company (“L.L.C.”) does not require a writing. In general, this contention is true — the sale of an oil and gas lease must be in writing, whereas the sale an L.L.C. does not necessarily have to be in writing. 5 All that would normally be required for the sale of membership interests would be an agreement about “[t]he thing, the price, and the consent of the parties.” La. Crv. Code Ann. art. 2439 (West 1996). Essentially conceding this point, Appellees do not contend that, in general, a sale of the interest in an L.L.C. must be in writing.

*732 Instead, Appellees emphasize the second issue and argue that their contract must be in writing because, to the extent that the parties reached any agreement, 6 they anticipated a written contract. Louisiana Civil Code article 1947 states “[wjhen, in the absence of a legal requirement, the parties have contemplated a certain form, it is presumed that they do not intend to be bound until the contract is executed in that form.” Under this article, for example, if parties intend to enter into a written contract, they are presumed not to be bound until the contract is signed.

Several Louisiana courts have applied this rule. For example, in Baldwin v. Bass, the court concluded that a prospective homeowner did not intend to be bound by a contract with a builder when that contract was mailed to her but she intentionally refrained from signing it. Baldwin v. Bass, 685 So.2d 436 (La.Ct.App. 1996). Similarly, in Carter v. Huber & Heard, Inc., an employee could not enforce a two-year employment term when the parties anticipated entering into a written employment contract but never finalized its terms. 7 657 So.2d 409 (La.Ct.App.

1995).

Here, the parties clearly anticipated entering into a written contract. In fact, Rogers asked his own lawyers to draft the agreement. Although Rogers contends that this written contract was merely to “memorialize” the deal, this distinction is not significant. 8 Under article 1947, the contract had to be in writing to be enforceable. For this reason, the district court properly granted summary judgment on Rogers’s breach of contract claims.

Detrimental Reliance

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Cite This Page — Counsel Stack

Bluebook (online)
122 F. App'x 729, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rogers-v-brooks-ca5-2004.