Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Conservair, Inc. v. Quantem Fbo Group-Houston, LLC

United States District Court, S.D. Texas, Houston Division

June 27, 2017

CONSERVAIR, INC., Plaintiff,
v.
QUANTEM FBO GROUP-HOUSTON, LLC, Defendant.

          MEMORANDUM AND OPINION

          Lee H. Rosenthal Chief United States District Judge

         Conservair, Inc. sued Quantem FBO Group - Houston, LLC, in Texas state court, seeking a declaratory judgment that Quantem was not entitled to the return of a $100, 000 earnest-money deposit. (Docket Entry No. 1-1, Ex. A). After Quantem timely removed to this court, Conservair moved for summary judgment, Quantem responded, and Conservair replied. (Docket Entry No. 21, 24, 25). The court ordered supplemental briefing on an unbriefed issue, and the parties filed supplemental briefs. (Docket Entries No. 27, 28, 31, 32). Conservair filed a motion to strike Quantem's surreply to the request for supplemental briefing, to which Quantem responded. (Docket Entry No. 33, 34). The motion to strike is denied because Conservair was able to, and did, respond. Having considered the motions, responses, replies, and surreplies; the summary judgment record; and the applicable law, the court denies Conservair's motion for summary judgment, for the reasons set out in detail below.

         I. Background

         Conservair, a Texas company, owned and operated a fixed-base operation (FBO) at the Lone Star Executive Airport in Conroe, Texas. Quantem, an Ohio company, sought to purchase the Conroe FBO. The parties entered into an Asset Purchase Agreement on May 11, 2015. (Docket Entry No. 21-1, Ex. A). The Agreement provided that the sale would close on or before May 31, 2015. (M ¶ 3.1). The closing date could be extended by the parties' mutual agreement or by Quantem giving Conservair written notice stating that Quantem needed a reasonable amount of additional time to satisfy the conditions of the Agreement. (Id.).

         The Agreement set out several conditions precedent to Quantem's obligation to close. Quantem could waive the conditions. (Id. at ¶ 8). The conditions included Quantem's right to conduct satisfactory due diligence before closing. (Id. at ¶ 8.1). The APA could be terminated by a party giving written notice that, as of the closing date, "the conditions precedent to the performance of the obligations of the party giving such notice shall not have been fulfilled and shall not have been waived by such party." (Id. ¶ 11). The Agreement stated that it could be modified or amended, "but only in writing, signed by the parties .. . ." (Id. ¶ 14.5).

         On May 29, 2015, Quantem gave written notice, under ¶ 3.1 of the Agreement, that it needed additional time to conduct its due diligence. That notice extended the Agreement's closing date. (Docket Entry No. 24-2, Ex. B at ¶ 3). In June 2015, Quantem and Conservair executed a written amendment to the Agreement, setting a new closing date of September 15, 2015, and requiring Quantem to pay a $100, 000 earnest money deposit to be applied to the purchase price if the sale closed, and to be kept by Conservair if the sale did not close because Quantem materially breached its obligations under the Agreement. (Docket Entry No. 24-3, Ex. C). (Id.). As amended, the Agreement also provided that if the sale did not close because the conditions precedent to Quantem's obligation to close had not been satisfied and were not waived, the deposit would be returned to Quantem. (Id.).

         The sale did not close on or before September 15, 2015. The parties disagree on what happened around the closing date and the legal significance of those occurrences. Conservair argues that Quantem "did not seek a second extension of the Agreement prior to the Closing Date, and failed to terminate the agreement in the timeframe provided by the Agreement." (Docket Entry No. 21 at 4). Instead, Conservair says that Quantem waited until February 2016 and then purported to give notice of its intent to terminate the Agreement under ¶ 11. (Id.). Conservair asserts that as a result, Quantem is not entitled to a refund of its $100, 000 earnest money deposit.

         Quantem has a different account. According to Quantem, the parties orally agreed to extend the closing date in a September 10, 2015 conference call, and they continued to cooperatively work toward an agreement over the next several months. (Docket Entry No. 24 at 5). Quantem presented several pieces of summary judgment evidence. In their affidavits. Ken Allison, Quantem's CEO, (Docket Entry No. 24-5, Ex. E), and Blake Fish, Quantem's president (Docket Entry No. 24-4, Ex. D), both stated that during this conference call, the parties orally agreed to extend the closing date and continue cooperating on due diligence. (Docket Entries Nos. 24-5, Ex. E and 24-4, Ex. D). Quantem also presented the affidavit of Frank Pisano, Quantem's CFO. (Docket Entry No. 24-2, Ex. B). Pisano testified that in October, November, and December of 2015, he continued to communicate with Conservair about due diligence issues, and Conservair continued to provide requested due diligence information. (Id.). Quantem also attached copies of some of this correspondence. (Docket Entries No. 24-6 through 24-16, Exs. F-P).

         Fish and Allison both stated in their affidavits that in December 2015 and January 2016, based on the information uncovered through Quantem's due diligence, Quantem sent Conservair two new proposals for transaction terms that, in their view, more fairly distributed the risks. (Docket Entries No. 24-4 and 24-5; Ex. D at ¶¶ 4-9, Ex. E at ¶¶ 5-6). Both Fish and Allison stated that their discussions included the fact that the parties were still operating under the original Agreement with the modified closing date. (Id.). The affidavits both stated after these efforts to reach an agreement on the proposed sale, Quantem remained dissatisfied with the outcome of its due diligence and exercised its right to terminate the Agreement under ¶ 11 in February of 2016. (Id.). That led to Quantem's demand for the return of its $100, 000 earnest money deposit.

         This summary judgment dispute presents a narrow issue: whether Quantem has demonstrated a genuine factual dispute material to deciding whether the parties extended the closing date beyond September 15, 2015. Quantem argues that the parties' oral agreement to extend and subsequent course of dealing, including continued cooperation on due diligence work, give rise to a triable factual dispute on whether the Agreement was extended. Conservair argues that the summary judgment evidence would not permit a reasonable jury to find that the parties agreed to extend the closing date because the Agreement required legally effective modifications to be made in writing.

         II. The Applicable Legal Standards

         A. Summary Judgment

         "Summary judgment is required when 'the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.'" Trent v. Wade, 776 F.3d 368, 376 (5th Cir. 2015) (quoting Fed.R.Civ.P. 56(a)). "A genuine dispute of material fact exists when the 'evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Nola Spice Designs, LLC v. Hay del Enters., Inc., 783 F.3d 527, 536 (5th Cir. 2015) (quoting Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986)). "The moving party 'bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact.'" Id. (quoting EEOC v. LHC Grp., Inc., 773 F.3d 688, 694 (5th Cir. 2014)); see also Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

         "Where the non-movant bears the burden of proof at trial, the movant may merely point to the absence of evidence and thereby shift to the non-movant the burden of demonstrating by competent summary judgment proof that there is an issue of material fact warranting trial." Id. (quotation marks omitted); see also Celotex, 477 U.S. at 325. Although the party moving for summary judgment must demonstrate the absence of a genuine issue of material fact, it does not need to negate the elements of the nonmovant's case. Boudreaux v. Swift Transp. Co., 402 F.3d 536, 540 (5th Cir. 2005). "A fact is 'material' if its resolution in favor of one party might affect the outcome of the lawsuit under governing law." Sossamon v. Lone Star State of Texas, 560 F.3d 316, 326 (5th Cir. 2009) (quotation omitted). "If the moving party fails to meet [its] initial burden, the motion [for summary judgment] must be denied, ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.