Walk Haydel & Assoc v. Coastal Power Prodn

CourtCourt of Appeals for the Fifth Circuit
DecidedFebruary 27, 2008
Docket06-30886
StatusPublished

This text of Walk Haydel & Assoc v. Coastal Power Prodn (Walk Haydel & Assoc v. Coastal Power Prodn) 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
Walk Haydel & Assoc v. Coastal Power Prodn, (5th Cir. 2008).

Opinion

REVISED February 27, 2008

IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT United States Court of Appeals Fifth Circuit

FILED No. 06-30886 February 6, 2008

Charles R. Fulbruge III Clerk WALK HAYDEL & ASSOCIATES INC

Plaintiff v.

COASTAL POWER PRODUCTION COMPANY; ET AL

Defendants

LATIN AMERICAN ENERGY DEVELOPMENT INC, doing business as DELASA

Third-Party Plaintiff - Appellant v.

WINSTON & STRAWN LLP

Third-Party Defendant - Appellee

Appeal from the United States District Court for the Eastern District of Louisiana

Before REAVLEY, STEWART, and OWEN, Circuit Judges. REAVLEY, Circuit Judge: No. 06-30886

Latin American Energy Development, Inc. d/b/a Delasa (“Delasa”), a Louisiana corporation, alleged claims against Winston & Strawn, LLC (“W&S”), a Chicago-based law firm, for fraud, breach of contract, and breach of fiduciary duty.1 The suit arises out of an attempt by Delasa and others to acquire a contract to build a power plant in El Salvador, with W&S allegedly providing legal representation for the joint venturers, including Delasa. Delasa claims that W&S was supposed to be representing its interests, but in fact enabled another of its clients, Tenneco Gas, Inc., to obtain the project and extinguish Delasa’s rights in it. In response to W&S’s motion to dismiss for lack of personal jurisdiction, the district court held a hearing and granted the motion, dismissing Delasa’s case. We reverse and remand because Delasa established a prima facie case for specific personal jurisdiction, and the district court’s evidentiary hearing was inadequate to require more. I. Factual Background In January 1994, co-developers and partners Delasa, La Casa Castro, United Thermal Development Corporation (“UTDC”), and Independent Energy Corporation (“IEC”) submitted a successful bid for the right to develop and operate a power plant in El Salvador. Winning the bid gave the partners the exclusive right to negotiate and execute a power purchase agreement with El Salvador’s national power utility. UTDC’s main role was to provide project funding. It had a 75% interest in the project, while Delasa’s interest was 10%. UTDC agreed to pay the project’s development expenses, including the retention of legal counsel. Jim Abromitis, then-president of UTDC, retained Paul Abramson, a New York-based partner with W&S. Abramson agreed to draft documents related to the project, including the power purchase agreement and a joint-venture agreement among the co-developers. John Wheelock, Delasa’s then president, maintains in his

1 Although other parties were originally part of the suit, Delasa and W&S are the only remaining parties. No. 06-30886

affidavit that Abromitis said that W&S would represent all four parties, including Delasa, in negotiations with third parties. When Trigen Energy Corporation subsequently acquired UTDC, it continued to retain W&S and Abramson in conjunction with the project. In February 1994, Abromitis advised the other partners that Trigen was no longer interested in participating in the project. But he stated that Trigen would honor and fulfill all of its obligations with respect to the bid and negotiations, and that Trigen would help the other partners find a replacement investor for the project. Abromitis says that he contacted several developers, including Tenneco, as potential replacements. At that time, W&S and Abramson represented Tenneco with respect to unrelated projects in Latin America. Abramson had also been helping Tenneco develop a profile of projects for investment in Latin America. Abramson introduced a Tenneco executive to Abromitis because he knew that Abromitis was interested in finding another investor to take over all or part of Trigen’s interests in the project. On March 6, 1994, Floyd Lewis, a former attorney and a consultant to Delasa on the project, faxed a message to Abramson entitled, “Agreement Among Joint Venture Participants.” The first paragraph of the fax states: “We trust that with respect to the subject document, which you have said will be delivered ‘in New Orleans’ . . . your intent is to function as counsel to all of the parties and not just as lawyer for UTC [Trigen] and IEC against the others. If we are in error in this assumption, please make it clear to us so that appropriate legal counsel can be engaged to look after our interests.” The New Orleans reference is to a conference where there was a meeting involving the joint venturers, Tenneco, and Abramson, which is discussed below. Abramson responded via fax the next day: As for your comments on the agreement among the parties, as you know there may be legal conflicts among the positions of the

3 No. 06-30886

four parties, and Winston & Strawn will represent UTC [Trigen] [insofar] as there are any such conflicts. Naturally, Winston & Strawn believes it has been engaged to represent all four parties in their negotiations with others. We trust that one of the principals will advise us if this is in error.

(emphasis added). Wheelock concluded that this fax confirmed that W&S was representing the joint venturers in the negotiations with third parties, including those parties who would be recruited to assume Trigen’s role in funding the project. On March 9, 1994, the joint venturers traveled to New Orleans to attend the 9th Annual Cogeneration and Development Power Conference. In connection with the events in New Orleans, Abramson said he would deliver the Joint Venture Agreement to the partners. The project partners and Abramson were also to meet with potential investors to find a party to replace Trigen or to assist Trigen in funding the project. Delasa was aware that several potential investors would be present at the conference. Wheelock and Lewis state that the parties and W&S understood that the joint venturers would have to disclose proprietary and confidential information about the project, including the “financial performer models,” to potential investors. For this reason, they say that Abramson was instructed to draft and deliver a confidentiality agreement to Tenneco prior to the meeting in New Orleans, which he never did. Delasa met with Tenneco at the conference to discuss its potential involvement in the project. According to Wheelock, prior to the conference Abramson stated that all four parties should meet with Tenneco in New Orleans and indicated that Tenneco had an interest in taking all or part of Trigen’s interest in the project. Delasa representatives met with Tenneco during a golf tournament and lunch hosted by W&S. Based on the March 7 fax, which confirmed W&S’s representation of the project partners vis-à-vis third parties,

4 No. 06-30886

Wheelock and Lewis say that Delasa felt comfortable divulging sensitive and propriety information concerning the project to one of W&S’s contacts, Tenneco. But while Delasa’s representatives knew that W&S had represented Tenneco in the past, they say that they did not know that Abramson was then representing Tenneco in its efforts to develop a profile of projects in Latin America. After the New Orleans meeting with Tenneco, there was correspondence and a series of meetings between the joint venturers and Tenneco, where they discussed the possibility of Tenneco replacing Trigen. Eventually, Tenneco and the joint venturers agreed that Tenneco would be brought into the deal. Delasa worked with W&S from its base in Louisiana during the negotiations with Tenneco. In fact, during the course of W&S’s alleged representation of the parties, there were over a hundred contacts between Delasa and W&S in the form of telephone calls, correspondence, and faxes. These contacts generated over 3,400 pages of documents, many of which were sent from W&S’s offices to Delasa in Louisiana.

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Walk Haydel & Assoc v. Coastal Power Prodn, Counsel Stack Legal Research, https://law.counselstack.com/opinion/walk-haydel-assoc-v-coastal-power-prodn-ca5-2008.