NEW ORLEANS (Louisiana Record) — A federal judge recently tossed out parts of a real estate investment group's multimillion dollar breach of contract lawsuit against a Florida developer for allegedly misrepresenting the profit potential of Margaritaville restaurants in New Orleans and in Minnesota.
In her 47-page order handed down April 18, U.S. District Court Judge Nannette Jolivette Brown, on the bench in Louisiana's Eastern District, granted developer IMCMV Holdings' summary judgment motion on TMJ Group's Unfair Trade Practices Act and U.S. Securities Act of 1933 allegations. "The court will deny the motion in all other respects," Brown said in her order.
The order leaves in place TMJ Group's claims that it can do so under Louisiana's Blue Sky Laws, which the investment firm alleges its venture with IMCMV Holdings qualifies as investment contracts as established under the 1946 U.S. Supreme Court case Securities and Exchange Commission v. W. J. Howey Co.
"As stated above, with respect to TMJ Plaintiffs' investments in both the Minneapolis restaurant and the New Orleans restaurant, TMJ plaintiffs have pointed to evidence that creates a genuine dispute of material fact as to whether the investments constitute securities under Howey," Brown said in her order.
"Therefore, summary judgment is not appropriate with respect to TMJ plaintiffs' Louisiana Blue Sky Law claims, to the extent there is a genuine issue of material fact as to whether the investments in the Minneapolis restaurant and the New Orleans restaurant are securities as defined by state law."
In its $3.4 million breach of contract lawsuit filed in the district court almost a year ago, TMJ Group alleged the Florida restaurant developer IMCMV Holdings' joint venture to open Jimmy-Buffet-Margaritaville-themed restaurants didn't go as projected. TMJ Group alleges IMCMV Holdings negligently misrepresented the potential of the venture to open restaurants in New Orleans and the Mall of America in Bloomington, Minnesota.
TMJ Group wants to cancel the investment, which it claims it can do under Louisiana's Blue Sky Laws and Unfair Trade Practices Act and the U.S. Securities Act of 1933, in addition to seeking damages, reimbursement and attorneys' fees.
In an order issued earlier this month, signed by U.S. Magistrate Judge Janis van Meerveld, the court granted portions of IMCMV Holdings' motions to compel and for depositions past the discovery deadline. IMCMV Holdings' motions to compel were granted in part, "with issues regarding the redacted documents taken under submission," van Meerveld said in the nine-page order issued April 6.
Trial is scheduled to begin May 14 while the deadline to complete discovery passed March 14.
"Of interest to the present discovery motions is TMJ's allegation that it sought and obtained financing for the investment at issue in this lawsuit from First NBC Bank and that IMC altered financial figures in the pro forma financial statements it provided to TMB and FNBC so that FNBC would approve the financing after initially rejecting it," the April 6 order said.
IMCMV Holdings' motions to compel involved redacted communications between TMJ Group and the bank, which the court previously ordered be produced "for in camera review," the order said. "Some issues have arisen regarding the scope of documents at issue, accordingly, this portion of the motions remains under submission."
IMCMV Holdings wanted to compel several depositions, despite the past deadline. The April 9 order allows deposition of bank representatives to proceed, "subject to the scope and restrictions provided herein, including the requirement that the parties obtain an extension of the discovery deadline before any depositions are held."