131 So. 3d 224
La. Ct. App.2013Background
- Redman sold exclusive rights to operate video gaming devices to Bouree in Sept 2007; purchase price allocated $1,000,000 to customer list/right to serve customers.
- Bouree borrowed $1,400,000 from First Bank and, with First Bank and Redman, executed an "Agreement Regarding Repurchase of Assets" requiring Redman to repurchase the assets upon Bouree's uncured payment default for the lesser of $1,000,000 or the unpaid note balance; repurchase price payable within 45 days of First Bank's written demand.
- Bouree defaulted; First Bank demanded repurchase twice in 2011, seeking $1,000,000; Redman did not pay and later disputed enforceability, claiming some listed assets were no longer deliverable by Bouree.
- First Bank sued Redman for breach; Redman moved for summary judgment asserting impossibility/unenforceability; First Bank cross-moved. Trial court granted summary judgment for First Bank on liability and later on damages, awarding $1,000,000.
- Redman appealed both liability and damages judgments; First Bank’s separate request to amend an earlier judgment to include damages was rendered moot by the later damages summary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of repurchase agreement | Agreement is clear; Redman obligated to pay $1,000,000 upon Bouree's uncured default and First Bank's demand | Agreement is ambiguous/impossible because Bouree no longer has all listed assets, so repurchase cannot occur | Agreement is unambiguous; Redman breached by failing to pay $1,000,000 upon demand |
| Parol evidence / ambiguity | No parol evidence needed where contract language is clear | Contract ambiguity (no provision for partial delivery) requires parol evidence and precludes summary judgment | Contract terms are clear as written; no ambiguity; summary judgment appropriate |
| Duty to mitigate damages | Mitigation doctrine inapplicable because First Bank did not suffer additional recoverable loss beyond contract remedy | First Bank should have mitigated by pursuing Bouree first to reduce Redman’s liability | No mitigation required — First Bank’s damages were not increased by Redman’s breach and damages were fixed by the agreement |
| Trial-court denial to amend earlier judgment | Plaintiffs: denial moot because later damages summary judgment decided damages | (Defendant not directly on this point) | Moot — subsequently granted damages summary judgment made the motion to amend immaterial |
Key Cases Cited
- Smitko v. Gulf South Shrimp, Inc., 94 So.3d 750 (La. 2012) (summary judgment de novo review and standards)
- Hines v. Garrett, 876 So.2d 764 (La. 2004) (definition of material fact for summary judgment)
- Lomark, Inc. v. Lavigne-Baker Petroleum, L.L.C., 110 So.3d 1107 (La. App. 5 Cir. 2013) (when parol evidence is admissible for ambiguous contracts)
- Campbell v. Melton, 817 So.2d 69 (La. 2002) (courts must not create ambiguity where none exists; enforce clear contract language)
- Lombardo v. Deshotel, 647 So.2d 1086 (La. 1994) (purpose and scope of duty to mitigate damages)