Bazarian International Financial Associates, L.L.C. v. Desarrollos Aerohotelco, C.A.
793 F. Supp. 2d 124
D.D.C.2011Background
- BI, a Florida investment banking firm, helped BI and DESA pursue a luxury resort project on Palm Beach, Aruba.
- The Palm Beach Option was initially pursued with Ritz Carlton; option expired in 2006 and Aruba reopened bids.
- BI and DESA entered into a February 5, 2007 Agreement by which DESA paid BI $70,000 on execution and $70,000 upon award of the Option.
- The Agreement also required BI to perform exclusive investment banking services to secure financing for the Project and to be paid a contingent, percentage-based fee.
- BI claimed it helped introduce DESA to banks (AIB and Scotiabank) and that AIB issued a non-binding indicative term sheet for $170 million in March 2007, with a later October 2009 financing commitment; no settlement occurred.
- DESA moved to dismiss on January 19, 2011, arguing lack of subject matter jurisdiction and failure to state a claim; BI opposed, citing an AIB financing commitment and the potential for a drop dead fee.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a declaratory judgment is appropriate here | BI asserts a live controversy based on contractual rights to fees once financing is settled. | DESA contends there is no immediate, concrete controversy; fees are contingent on future events. | Not appropriate; no imminent, justiciable controversy. |
| Whether the court has subject matter jurisdiction under the Declaratory Judgment Act and Article III | BI contends the dispute falls within DJA as an actual controversy. | DESA argues lack of substantial, real controversy because a settlement has not occurred and the AIB financing is uncertain. | Court lacks subject matter jurisdiction. |
| Whether the AIB Financing Commitment creates a justiciable controversy | BI points to the October 2009 AIB Financing Commitment as evidence of a concrete financing path. | Vera Declaration says the commitment is contingent, not settled, and no close date is set. | Even with the commitment, no likely settlement; no justiciable controversy. |
Key Cases Cited
- Federated Department Stores, Inc. v. Moitie, 452 U.S. 394 (U.S. 1981) (standing and jurisdiction principles for declaratory relief)
- Fed. Express Corp. v. Air Line Pilots Ass'n, Int'l, 67 F.3d 961 (D.C. Cir. 1995) (actual controversy standard for DJA)
- Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270 (U.S. 1941) (original standard for declaratory relief and controversy)
- MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (U.S. 2007) (scope of declaratory judgment jurisdiction; prudential considerations)
- Wilton v. Seven Falls Co., 515 U.S. 277 (U.S. 1995) (recognition of discretionary nature of DJA)
- Hanes Corp. v. Millard, 531 F.2d 585 (D.C. Cir. 1976) (considerations guiding declaratory relief analysis)