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Bazarian International Financial Associates, L.L.C v. Desarrollos Aerohotelco

June 22, 2011


The opinion of the court was delivered by: Judge Beryl A. Howell


The parties to this case are two companies that have collaborated as business partners in the development of a proposed luxury resort on the island of Aruba. The plaintiff, a Florida company, alleges that it has helped to procure a lease for the resort property and has attempted to secure financing for the planned resort. The defendant, a Venezuelan company, is directly developing the resort. The parties have a contract that spells out their respective rights and duties in connection with the resort project. The plaintiff brought this lawsuit seeking a declaratory judgment regarding its right to certain investment banking fees under the parties' contract. The defendant has moved to dismiss the lawsuit on the grounds that, among other things, the request for declaratory judgment is premature. For the reasons explained below, the Court grants the motion to dismiss and dismisses the Complaint without prejudice.*fn1


Plaintiff Bazarian International Financial Associates, L.L.C. ("BI") is a Florida company in the business of providing investment banking services. Compl. ¶ 1. In 2003, the Government of Aruba granted BI the option to lease land on Palm Beach, Aruba, in order to establish and develop a luxury resort (the "Palm Beach Option"). Id. ¶ 7. BI approached Ritz Carlton Hotels to manage this contemplated resort. Id. ¶ 8. While BI and Ritz Carlton were negotiating the possible sale of the Palm Beach Option, Ritz Carlton introduced BI to the defendant Desarrollos Aerohotelco, C.A., a Venezuelan company in the business of developing and owning hotels. Id. ¶¶ 2, 9.

After several successful renewals of the option, BI and Ritz Carlton were unable to consummate sale of the Palm Beach Option. Id. ¶ 10. The option expired by its own terms at the end of 2006. Id. The Government of Aruba re-opened bids for the Palm Beach Option and the defendant retained BI to assist with its efforts to obtain the Palm Beach Option and to arrange for funding for the resort development project. Id. ¶¶ 11-12. BI and the defendant entered into an agreement on February 5, 2007, to memorialize their duties and obligations (the "Agreement"). Id. ¶ 12.

The Agreement called for the defendant to pay BI $70,000 upon execution of the Agreement, which the defendant paid. Id. ¶¶ 14, 21. The Agreement also called for the defendant to pay BI $70,000 upon award of the Palm Beach Option. Id. ¶ 15. In early 2008, the Government of Aruba did award the option to the defendant, and the defendant accordingly paid BI the second $70,000 fee. Id. ¶ 26.

In addition to specifying that BI would help the defendant acquire the Palm Beach Option, the Agreement also called for BI to "perform exclusive investment banking services" in connection with the development of a luxury hotel and resort on the Palm Beach Option land (the "Project"). Id. ¶ 13. Specifically, BI was to "conduct negotiations . . . to secure, on a best efforts basis, financing for the Project." Compl. Ex. A, ¶ 1.D. In exchange for these services, the defendant agreed to pay BI a percentage-based investment-banking fee. Id. ¶ 2.C. According to the Complaint, BI is entitled to this fee under the Agreement upon settlement of binding loan or guarantee commitments for the Project obtained directly or indirectly by BI. Compl. ¶ 16. Payment of the fee becomes due "upon the earlier of the first draw-down of funds and/or first infusion of equity capital, provided that financing has been committed to the project as a result of the efforts of BI." Id. ¶ 18. The Agreement further entitles BI to this fee "if the financing for the Project is concluded within thirty-six (36) months following the termination of this Agreement from sources introduced to the Project by [BI]." Compl. Ex. A, ¶ 3. Finally, the Agreement also provides that it is to "become part of the relevant loan documents, management agreements, joint-venture agreements, guaranty agreements, bridge loan facilities and Memorandum of Association for [the] Project amongst and between the equity shareholders and lenders." Id.

In or about December 2006 and January 2007, BI allegedly introduced the defendant to key executives and decision-makers at two banks-AIB Bank and Scotiabank-to begin the process of obtaining financing for the Project. Compl. ¶¶ 23-24. BI also claims that it worked with the defendant to coordinate the financing process with these two banks. Id. ¶ 25.

Ultimately, the defendant chose not to proceed with Scotiabank but continued to pursue financing from AIB Bank. Id. ¶ 26. BI claims that it obtained an Indicative Term Sheet from AIB Bank for the defendant as of March 26, 2007 setting forth a total facility amount of $170 million. Id.

At some point thereafter, however, the relationship between BI and the defendant apparently soured. In around June 2009, the defendant allegedly informed BI in writing that it did not intend to pay the investment banking fees specified in the Agreement for Project financing from AIB Bank. Id. ¶ 28. BI claims that the defendant asserted that BI had no role in facilitating its relationship with AIB Bank. Id.

On September 17, 2009, BI brought this action seeking declaratory judgment as to whether it is entitled to the investment banking fees called for under the Agreement upon the settlement of binding loan or guarantee commitments for the Project from AIB Bank. Id. ¶ 33.

At the time of filing the Complaint on September 17, 2009, BI believed that AIB Bank would provide total project financing to the defendant, and anticipated the financing deal closing within sixty days of filing the Complaint. Id. ¶ 27. In October 2009, about a month after the filing of the instant Complaint, AIB Bank and various other lenders apparently did issue a financing commitment for the Project (the "AIB Financing Commitment"), although it appears that this loan commitment remains subject to various contingencies and the loan has never settled, closed, or been drawn upon. Def.'s Mot. Dismiss Pl.'s Compl. & Incorporated Mem. ("Def.'s Mem.") at 4. The defendant denies that BI had any involvement in obtaining the AIB Financing Commitment. Ex. A to Def.'s Mem., Declaration of Pedro Vera dated January 26, 2011 ("Vera Decl.") ¶ 9.

On January 19, 2011, the defendant filed a motion to dismiss for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted.*fn2 Def.'s Mem ...

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