[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
FILED
_____________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
NOVEMBER 4, 2011
No. 10-12530
_____________ JOHN LEY
CLERK
D.C. Docket No. 3:08-cv-00917-HLA-JRK
BKR GLOBAL, LLC,
a Florida Limited Liability Company,
Plaintiff - Appellant,
versus
FOURWINDS CAPITAL MANAGEMENT,
a Cayman Islands Company,
PHAUNOS TIMBER FUND LIMITED,
a Guernsey Company,
Defendants - Appellees.
____________
Appeal from the United States District Court
for the Middle District of Florida
____________
(November 4, 2011)
Before MARCUS, WILSON and HILL, Circuit Judges.
HILL, Circuit Judge:
BKR Global, LLC appeals the entry of summary judgment against it in its
action for breach of contract against defendant FourWinds Capital Management,
tortious interference with a contractual relationship against defendant Phaunos
Timber Fund Limited, deceptive and unfair trade practices and civil conspiracy
against FourWinds and Phaunos, and unjust enrichment against Phaunos. The
district court held that BKR could not prevail on its contract claim and that all the
other claims failed as a result.1
I.
In January of 2007, BKR Global, LLC (“BKR”) entered into a Consulting
Agreement (the “Agreement”) with FourWinds Capital Management
(“FourWinds”) that provided that BKR – an experienced timber investment
consulting firm – would seek to provide FourWinds with “investment
opportunities” in the timber industry. Essentially BKR agreed to act as a broker,
finding and introducing potential investment opportunities for FourWinds. The
Agreement provided that FourWinds would pay BKR $3000 per month to cover
costs and expenses for these services. The Agreement also provided, however,
that BKR would be “included in the investment process either as due diligence
1
BKR did not appeal the dismissal of its claim in Count IV for fraud and this opinion
does not alter that result.
2
agent . . . or as acquisition agent” if FourWinds “pursu[ed] an investment
opportunity that the Consultant introduced.” The parties agreed that BKR would
be compensated separately for such services,2 and that FourWinds would “include
[BKR] in any transaction which it has introduced for a period of two years from
the date of the introduction . . . .”
In late March of 2007, a BKR representative attended a timber conference at
which she learned of a timber company, Nemus, S/A, that was seeking investors in
its teak and eucalyptus plantations in Brazil. BKR discussed investment
opportunities for FourWinds with the Nemus representative who gave her a
confidential prospectus to give to FourWinds. The prospectus provided
background information about Nemus’ business and history and outlined a $25
million dollar investment opportunity in the company.
BKR delivered this prospectus to FourWinds and follow-up emails were
exchanged among the three parties. Almost immediately, however, FourWinds
began to communicate directly with Nemus. Over the next two months,
FourWinds had repeated conversations with Nemus, and even sent a representative
to Brazil to meet with Nemus representatives in June. By late October, serious
2
Although the parties did not specify at what rate BKR would be compensated,
FourWinds concedes that an appropriate commission for acquisition services would be
somewhere between 1.5 and 2 percent of the value of the deal.
3
discussions about a joint venture were taking place. In November, FourWinds
sent a letter to BKR terminating the Consulting Agreement.
On December 14, 2007, FourWinds announced that it was entering into a
joint venture with Nemus through Phaunos Timber Fund Limited (“Phaunos”), a
timberland investment vehicle for which FourWinds acts as investment manager,
and a newly created entity, Eucateca S.A. This joint venture amounted to an
investment of approximately $150,000,000.
BKR demanded its commission under the original Agreement. FourWinds
rejected this demand, stating that BKR was not entitled to a commission because
discussions with Nemus regarding the joint venture began after Nemus “cold
called” FourWinds.3 This action ensued.4
II.
The central issue in this case is whether FourWinds “pursued an investment
opportunity that [BKR] introduced.” If so, FourWinds was obligated to include
BKR “in the investment process either as due diligence agent . . . or as an
acquisition agent” and compensate it separately, which it admittedly did not do.
The district court held that, as a matter of law, FourWinds did not pursue an
3
FourWinds now concedes that BKR introduced it to Nemus.
4
Although originally a defendant, Nemus has been dismissed.
4
investment opportunity that BKR introduced. It held that ultimately the deal
consummated was “materially” different from the “investment opportunity” BKR
introduced, relieving FourWinds of all obligations to BKR under the Agreement.
We disagree.
The evidence presented in this case creates a triable issue of fact as to
whether the investment opportunity FourWinds pursued with Nemus was
materially different from that presented to it by BKR. Such a question of fact
cannot be decided as a matter of law. It is for a jury to decide.
There is not a single case cited by the district court to support its conclusion
that the facts of this case are controlled by law. Nor do the parties cite any cases
holding that this case may be decided as a matter of law. There is a reason for this.
There are no such cases.
The question whether the investment opportunity pursued by FourWinds is
covered by its agreement with BKR is one of fact, to be resolved by a jury. There
are cases to support this conclusion. In a case involving whether an investment
banking firm was entitled to a fee for its services as a broker for the acquiring
corporation in a corporate merger, the First Circuit held that “the appropriate
determination of the connection between the final transaction and the activities of
a broker or finder is a factual, rather than a legal, matter. The jury should have
5
been allowed to find the exact nature of [the brokers’] obligations under . . . the
agreement. . . . After determining the exact nature of the agreement, the jury
could have considered whether [the brokers] had established the requisite
connection between their efforts and the ultimate transaction.” Bushkin Assocs.,
Inc. v. Raytheon Co., 815 F.2d 142, 152 (1st Cir. 1987).5
Furthermore, Florida law clearly provides that whether a broker is the
“procuring cause” of the ultimate transaction between two parties is a question for
a jury. Easton-Babcock & Assoc., Inc. v. Fernandez, 706 So. 2d 916, 919 (Fla. 3d
DCA 1998).6 Even FourWinds agrees that “whether a broker is the ‘procuring
cause’ can be a question of fact for the jury.” FourWinds merely argues that no
reasonable juror could have determined that BKR was the procuring cause of the
ultimate deal in this case. We disagree.
There was evidence in this record from which a jury could have concluded
that BKR produced an investment opportunity in timber for FourWinds as it had
5
The parties agree that either Florida or Massachusetts law controls this dispute, and that
there is no material difference in that law on this issue.
6
Although the common law “procuring cause” doctrine traditionally applies in the context
of commission disputes between real estate brokers and property sellers, we find guidance in its
similar principles of law and equity. Neither party offered any case either approving or
disapproving the application of the doctrine in the circumstances of this case. FourWinds argues
that the doctrine is inapplicable “[b]ecause BKR is not entitled to any additional compensation
under the Consulting Agreement,” but this argument, of course, begs the question whether the
Agreement between BKR and FourWinds limits BKR’s right to compensation under the
circumstances of this case.
6
contracted to do, that BKR introduced FourWinds to Nemus, a willing and able
investment partner, that FourWinds and Nemus continuously discussed investment
opportunities, that FourWinds excluded BKR from such discussions, and that it
terminated its Agreement with BKR shortly before announcing its joint venture
with Nemus. Whether BKR is entitled to compensation under its Agreement with
FourWinds in these circumstances is a classic jury question. See id. See also
Moylan v. Estes, 102 So. 2d 855 (Fla. 3d DCA 1958); Stuart v. Valsom, 143 N.E.
815, 816 (Mass. 1924).
III.
The district court erred in granting summary judgment to FourWinds on
BKR’s contract claim for compensation under its Agreement with FourWinds.
Whether FourWinds pursued an investment opportunity that BKR introduced is a
question of fact for a jury.
Additionally, the district court’s grant of summary judgment to FourWinds
on BKR’s non-contract theories of relief depended on the district court’s
erroneous view that BKR’s contract claim is precluded as a matter of law.
Accordingly, the grant of summary judgment to FourWinds shall be
reversed and the case remanded for further proceedings not inconsistent with this
opinion.
7
REVERSED and REMANDED.
8