Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alsd-1_14-cv-00408/USCOURTS-alsd-1_14-cv-00408-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Declaratory Judgement

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IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

UTAH REVERSE EXCHANGE, LLC, )

et al., )

 )

Plaintiffs, )

 )

v. ) CIVIL ACTION 14-0408-WS-B

 )

LINDA DONADO, et al., ) 

 )

Defendants. )

 ORDER

This matter is before the Court on the plaintiffs’ motion for summary 

judgment as to the defendants’ counterclaim. (Doc. 61). The parties have filed 

briefs and evidentiary materials in support of their positions, (Docs. 62-64, 71, 

73), and the motion is ripe for resolution. After careful consideration, the Court 

concludes the motion is due to be denied.

BACKGROUND

The plaintiffs in this declaratory judgment action are five limited liability 

companies (“Utah,” “Range,” “Water,” “Patmos,” and “Florencia”), all formed by 

Charles Breland to facilitate his business of buying and reselling real estate. The 

defendants are two individuals (“Linda” and “William”) who performed services 

for Breland and certain of his LLCs in locating and acquiring various properties. 

The complaint seeks a declaration that the plaintiffs owe nothing to the defendants 

arising out of their rendition of such services. (Doc. 1 at 7).

According to the counterclaim, (Doc. 47), Breland agreed on behalf of the 

plaintiffs to pay the defendants all compensation he or any of his LLCs owed 

them. The counterclaim alleges that the defendants are owed agreed compensation 

for their services with regard to two properties. The counterclaim is asserted 

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against all five plaintiffs as well as a new party (“Osprey”), which is another LLC 

formed by Breland. (Id. at 7-8).

According to the counterclaim, in 2003 the defendants performed services 

in connection with the location and acquisition of certain property in Mexico. The 

property was resold in 2004 and 2005, and the defendants were paid 10% of the 

resale price per an oral agreement. As part of the sale transaction, Breland 

retained an option to re-purchase a portion of the property he had just sold. (Doc. 

47 at 9).

According to the counterclaim, the defendants also performed services in 

connection with Breland’s acquisition of property in Utah. In July 2005, Utah, 

Range and Water closed on this property. (Doc. 71 at 5). Prior to closing, (Doc. 

71-5 at 87), the defendants agreed to Breland’s proposal that they be compensated 

with a 25% ownership interest in the total mineral rights in the Utah property 

rather than with 10% of the resale price, the transfer of such rights to occur at 

some later date. (Doc. 47 at 10). 

In 2009, Breland filed for bankruptcy protection. According to the 

counterclaim, in April 2010 Breland bound all his LLCs to satisfy all indebtedness 

to the defendants. In particular, he promised to use any or all of their assets to 

fully compensate the defendants, in exchange for their assistance in developing a 

comprehensive liquidation plan to terminate his bankruptcy proceedings and for 

refraining from filing a proof of claim in those proceedings. In December 2010, 

Breland reaffirmed his promise. In reliance on Breland’s promise, the defendants 

provided the assistance he requested and refrained from filing a proof of claim. 

(Doc. 47 at 10-11). 

In December 2010, (Doc. 71 at 8), within the bankruptcy proceedings and 

with the defendants’ assistance, Breland sold his options to repurchase the Mexico

property, for $19 million. The defendants seek payment of $1.9 million, or 10% 

of the resale price, as compensation. (Doc. 47 at 11-12).

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In or about May 2011, (Doc. 71 at 8), within the bankruptcy proceedings, 

Utah, Range and Water sold the Utah property. As part of the deal, the purchaser 

acquired all the mineral rights but transferred to Osprey a 33% interest in those 

rights. (Doc. 47 at 12). The defendants demand that Osprey transfer to them a 

25% interest in the mineral rights to the Utah property. (Id. at 12-13). If Osprey 

no longer owns such rights, the defendants demand damages in the value of such 

rights, plus additional damages for fraudulently failing to make the transfer. (Id. at 

13-14). 

On motion for summary judgment, the plaintiffs1 argue that the defendants’ 

claim as to both the Mexico and the Utah properties is barred by their failure to 

file a proof of claim in Breland’s bankruptcy proceedings. As to the Utah 

property, the plaintiffs further argue the defendants’ claim is barred by the statute 

of frauds and the statute of limitations.2 As to the Mexico property, the plaintiffs 

argue they have no connection to that property and that the underlying deal to 

compensate the defendants is barred by Mexico’s statute of frauds.

DISCUSSION

Summary judgment should be granted only if “there is no genuine dispute 

as to any material fact and the movant is entitled to judgment as a matter of law.” 

Fed. R. Civ. P. 56(a). The party seeking summary judgment bears “the initial 

burden to show the district court, by reference to materials on file, that there are no 

genuine issues of material fact that should be decided at trial.” Clark v. Coats & 

Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). The moving party may meet its 

 1 Although Osprey is a movant but not a plaintiff, the Court uses this terminology 

for convenience.

2 The plaintiffs expend considerable effort questioning the defendants’ evidence 

regarding the existence of an oral agreement for a 25% mineral interest in the Utah 

property. (Doc. 64 at 14-18). They do not, however, argue that there is no genuine issue 

of material fact as to whether such an agreement existed, and their own presentation 

would in any event fail to establish the absence of such an issue. 

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burden in either of two ways: (1) by “negating an element of the non-moving 

party’s claim”; or (2) by “point[ing] to materials on file that demonstrate that the 

party bearing the burden of proof at trial will not be able to meet that burden.” Id. 

“Even after Celotex it is never enough simply to state that the non-moving party 

cannot meet its burden at trial.” Id.; accord Mullins v. Crowell, 228 F.3d 1305, 

1313 (11th Cir. 2000); Sammons v. Taylor, 967 F.2d 1533, 1538 (11th Cir. 1992). 

“If the party moving for summary judgment fails to discharge the initial 

burden, then the motion must be denied and the court need not consider what, if 

any, showing the non-movant has made.” Fitzpatrick v. City of Atlanta, 2 F.3d 

1112, 1116 (11th Cir. 1993); accord Mullins, 228 F.3d at 1313; Clark, 929 F.2d at 

608. 

“If, however, the movant carries the initial summary judgment burden ..., 

the responsibility then devolves upon the non-movant to show the existence of a 

genuine issue of material fact.” Fitzpatrick, 2 F.3d at 1116. “If the nonmoving 

party fails to make ‘a sufficient showing on an essential element of her case with 

respect to which she has the burden of proof,’ the moving party is entitled to 

summary judgment.” Clark, 929 F.2d at 608 (quoting Celotex Corp. v. Catrett, 

477 U.S. 317 (1986)) (footnote omitted); see also Fed. R. Civ. P. 56(e)(2) (“If a 

party fails to properly support an assertion of fact or fails to properly address 

another party’s assertion of fact as required by Rule 56(c), the court may ... 

consider the fact undisputed for purposes of the motion ....”).

In deciding a motion for summary judgment, “[t]he evidence, and all 

reasonable inferences, must be viewed in the light most favorable to the 

nonmovant ....” McCormick v. City of Fort Lauderdale, 333 F.3d 1234, 1243 

(11th Cir. 2003).

There is no burden on the Court to identify unreferenced evidence 

supporting a party’s position.3 Accordingly, the Court limits its review to the 

 3 Fed. R. Civ. P. 56(c)(3) (“The court need consider only the cited materials, but it 

may consider other materials in the record.”); accord Adler v. Wal-Mart Stores, Inc., 144 

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exhibits, and to the specific portions of the exhibits, to which the parties have 

expressly cited.4 Likewise, “[t]here is no burden upon the district court to distill 

every potential argument that could be made based upon the materials before it on 

summary judgment,” Resolution Trust Corp. v. Dunmar Corp., 43 F.3d 587, 599 

(11th Cir. 1995), and the Court accordingly limits its review to those arguments the 

parties have expressly advanced.

I. Discharge in Bankruptcy.

Breland apparently received a discharge of his debts. The plaintiffs argue 

that, because the defendants failed to file any proofs of claim in the bankruptcy 

proceedings despite actual knowledge of the proceedings and of the deadline for 

doing so, they are barred by Breland’s discharge from pursuing any claim against 

not just Breland but the plaintiffs as well. (Doc. 64 at 5-14). 

The plaintiffs recognize that only a debtor (here, Breland) receives a 

discharge in bankruptcy, and they recognize that the defendants’ claim is against 

the plaintiffs, not against Breland. They nevertheless insist that the defendants’ 

claim is barred because the defendants knew that Breland had listed the plaintiffs 

as assets of his estate and that this meant the trustee could exercise control over 

the plaintiffs, selling them and/or their assets to satisfy Breland’s debts. “Under 

such circumstances, ... any claims against [the plaintiffs] were waived by the 

[defendants] and discharged when they failed to file proofs of claim in the Breland 

bankruptcy proceeding.” (Doc. 64 at 13). But the plaintiffs offer no authority for 

 

F.3d 664, 672 (10th Cir. 1998) (“The district court has discretion to go beyond the 

referenced portions of these [summary judgment] materials, but is not required to do 

so.”). “[A]ppellate judges are not like pigs, hunting for truffles buried in briefs,” and 

“[l]ikewise, district court judges are not required to ferret out delectable facts buried in a 

massive record ....” Chavez v. Secretary, Florida Department of Corrections, 647 F.3d 

1057, 1061 (11th Cir. 2011) (internal quotes omitted). 

4 The defendant have submitted the largely irrelevant and uncited entirety of 

several lengthy depositions, even though they are forbidden to do so both by local rule, 

Civil L.R. 5.5(a), and direct order. (Doc. 37 at 5). 

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the dubious proposition that a creditor with a claim against a non-bankrupt entity 

that is owned by a bankrupt individual must pursue its claim against the nonbankrupt entity in the owner’s personal bankruptcy proceedings or lose its claim 

against the non-bankrupt entity. Even after the defendants pointed this out, (Doc. 

71 at 10-13), the plaintiffs in their reply brief simply repeated their conclusion 

without attempting to show by law or legal analysis that claims against an entity 

asset of a debtor are discharged by the debtor’s discharge. (Doc. 73 at 1-5). 

As noted, the Court will not create or support an argument the parties have 

elected not to advance or support on their own. It takes more than a bald ipse dixit 

to establish a legal proposition, especially one as unlikely as that advanced by the 

plaintiffs. Their failure to offer anything remotely supporting their position 

requires its rejection. 

II. Statute of Frauds.

The parties agree that the alleged 2005 agreement to compensate the 

defendants with a 25% mineral interest in the Utah property is subject to Utah’s 

statute of frauds. (Doc. 64 at 19; Doc. 71 at 14). While the plaintiffs rely on four 

different prongs of the statute of frauds, only one of them definitely applies.

5

“Every contract ... for the sale, of any lands, or any interest in lands, shall 

be void unless the contract, or some note or memorandum thereof, is in writing 

subscribed by the party to whom the ... sale is to be made, or by his lawful agent 

thereunto authorized in writing.” Utah Code § 25-5-3. The defendants 

 5 Section 25-5-1 of the Utah Code appears to address only actual conveyances of 

realty, not contracts to transfer realty in the future. Section 25-5-4(a) applies only when 

the contract “by its terms” is not to be performed within a year, and there has been no 

showing that the oral agreement to transfer a 25% mineral interest prevented a transfer 

from occurring within one year. Section 25-5-4(e) applies to contracts “authorizing or 

employing an agent or broker to purchase or sell real estate for compensation.” The 

purpose of the agreement in this case was not to authorize or employ the defendants to 

buy the Utah property on behalf of Breland or his LLCs (something that apparently had 

already occurred) but to alter the defendants’ compensation for their services in 

connection with the acquisition. 

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acknowledge that this provision of the statute of frauds applies, but they argue 

they are exempt from it under a “partial performance exception.” (Doc. 71 at 16). 

It is clear, however, that a verbal agreement to transfer an interest 

in land can be taken out of the statute of frauds, and that one can 

be estopped from challenging the oral agreement if three requirements 

are met: A court must find (1) that there was such an agreement, (2) 

that there had been part or full performance, and (3) that there was 

reliance thereon. 

Orton v. Carter, 970 P.2d 1254, 1259 (Utah 1998). The defendants say they have 

evidence of all three elements. (Doc. 71 at 17-18).

As for the second element, the defendants point to evidence that, after 

closing, they “participated in managing the tract, including supervising drilling 

activities on the tract.” (Doc. 71 at 17). The plaintiffs point out that the 

deposition excerpts on which the defendants rely to establish the existence of the 

oral agreement, (id. at 5 & n.15; id. at 17 & n.46), indicate that it was merely an 

agreement to substitute a 25% mineral interest for the 10% resale price as the 

defendants’ compensation for their services in acquiring the Utah property. (Doc. 

73 at 6-9). Williams testified that “the understanding was” that “it was supposed 

to be a 10 percent fee,” but “it morphed into, well, rather than me pay you the 

cash, you know, why don’t you take a percentage of the thing.” (Doc. 71-5 at 87). 

Linda testified that, as “compensation with respect to any efforts expended to 

assist Mr. Breland or his companies in acquiring the Utah Sunnyside property,” 

“instead of the [10% resale] commission we said we would take 25 percent of the 

deal that he made on the property.” (Doc. 71-4 at 47). 

If, as these statements seem to suggest, Breland agreed to pay the 

defendants a 25% mineral interest as compensation simply for their services in 

acquiring the Utah property, it is difficult to see how the defendants’ postacquisition conduct in connection with oil and gas exploration could constitute 

performance under the oral contract for purposes of the Orton exception. But even 

if the quoted testimony renders the defendants unlikely to establish the elements 

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identified in Orton, the plaintiffs have not shown that the defendants cannot do so. 

First, they have not shown that the quoted testimony is irreconcilable with the 

existence of a provision in the oral contract that the defendants perform services in 

connection with oil and gas exploration as a condition to receiving the 25% 

mineral interest. Second, they have not acknowledged William’s testimony, cited 

by the defendants, that he “earned every dime of that 25 percent” by his postclosing mineral development work. (Doc. 71-5 at 116; Doc. 71 at 5 n.16; id. at 17 

n.48). And third, they have not addressed the possibility that the defendants 

performed additional relevant acquisition services after the oral agreement was 

reached but before or at closing.

III. Statute of Limitations.

The alleged oral agreement to transfer to the defendants a 25% mineral 

interest in the Utah property was reached in mid-2005; the defendants’

counterclaim was first filed in February 2015. (Doc. 35). The plaintiffs argue the 

defendants’ claim is barred by either Utah’s four-year statute of limitations 

applicable to oral contracts or Alabama’s six-year limitations period. (Doc. 64 at 

21-23). The defendants oppose this limitations defense on a number of grounds, 

(Doc. 71 at 18-22), but the Court addresses only the third and fifth of these, as

they are adequate to resolve the present motion.

As a threshold matter, the plaintiffs have failed to show that, under 

applicable choice-of-law rules, Utah’s limitations period governs. They argue that 

the law of the place where the contract was formed provides the governing law for 

limitations purposes, and they submit Linda’s testimony that the oral agreement 

for a 25% mineral interest was formed in Daphne, Alabama. (Doc. 64 at 19, 22). 

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By their own argument, therefore, they cannot insist on applying Utah’s 

limitations period.6

“The statute of limitations begins to run when a cause of action on the 

contract accrues, which is to say, when the contract is breached.” Seybold v. 

Magnolia Land Co., 376 So. 2d 1083, 1084 (Ala. 1979); accord AC, Inc. v. Baker, 

622 So. 2d 331, 333 (Ala. 1993). “Where the defendant has agreed under the 

contract to do a particular thing, there is a breach and the right of action is 

complete upon his failure to do the particular thing he agreed to do.” Seybold, 376 

So. 2d at 1084. But the “particular thing” a promisor agrees to do includes the 

time at or by which he agrees to do it. Thus, “[t]he breach occurred ... when the 

time for performance arrived and [the defendant] failed to perform.” Cunningham 

v. Langston, Frazer, Sweet & Freese, P.A., 727 So. 2d 800, 805 (Ala. 1999). At 

least in general (e.g., absent an anticipatory repudiation), a failure to perform 

before performance is due is not a breach. 

The defendants correctly object that the plaintiffs have presented no 

evidence as to when performance (transfer of the mineral interest) was due under 

the terms of the oral agreement. (Doc. 71 at 20). The plaintiffs appear to assume 

that performance was due immediately upon acquisition of the Utah property, 

(Doc. 64 at 22), but they offer no evidence that the agreement contained such a 

term. 

“Where a contract provides no fixed time for performance, the claimant 

must generally make a demand for performance in order to put the other party in 

default; and, if a demand for performance is required, the demand should be made 

within a reasonable time after it lawfully can be made.” Seybold, 376 So. 2d at 

1086; accord id. at 1087. The defendants accurately point out that the plaintiffs 

have presented no evidence of a demand by the defendants so as to put Breland or 

 6 The Court therefore need not reach the defendants’ argument that, under 

Alabama conflict rules, the forum state (Alabama) ordinarily supplies the limitations 

period. (Doc. 71 at 19). 

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the plaintiffs in breach and no evidence or argument that a reasonable time for 

making such a demand expired more than six years before the counterclaim was 

pleaded. (Doc. 71 at 21-22). The defendants also identify circumstances which, 

they say, rendered it reasonable for them not to demand transfer of the mineral 

interest. (Id. at 22). 

The plaintiffs’ sole response to the defendants’ presentation is to complain 

that requiring them to show when the alleged oral agreement was breached “would 

place an impossible burden on” them. (Doc. 73 at 11). But this is the plaintiffs’ 

motion for summary judgment, so they have the initial burden either to negate the 

timeliness of the defendants’ counterclaim or to direct the Court’s attention to 

materials on file that demonstrate the defendants cannot show timeliness.7 

However difficult that burden may seem to the plaintiffs, it is theirs to bear, and 

they cannot meet it by ignoring the defendants’ arguments.8 

IV. Strangers to Mexico Transaction.

William testified that the agreement to pay the defendants 10% of the resale 

price of the repurchase option on the Mexico property was made with another 

entity controlled by Breland (“Pelican”). (Doc. 71-5 at 131). The plaintiffs argue 

that, since they themselves “had nothing to do with” the Mexico property or the 

transactions concerning it, “no such claim” for the 10% commission can be made 

against them. (Doc. 64 at 25, 28). But the defendants’ claim is that Breland, on 

behalf of the plaintiffs, obligated the plaintiffs to pay all compensation due the

defendants, including that arising from the sale of the repurchase option. The 

 7 The Court need not at this juncture determine which party bears the burden of 

proof at trial as to the statute of limitations.

8 It appears likely the plaintiffs failed to conduct discovery into many of the 

matters relevant to the statute of limitations, such as asking the defendants if they and 

Breland had agreed on when performance was due, or whether and when they made 

demand for performance, or if there were any circumstances that caused them not to 

make such a demand. Without such necessary discovery, it is unsurprising that the 

plaintiffs find it “impossible” to prevail on the limitations issue.

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plaintiffs have made no argument, and have offered no authority supporting an 

argument, that only someone already involved in a transaction can enforceably 

agree to ensure payment, and the law of guaranty would suggest there is no such 

rule. 

V. Mexican Law.

The plaintiffs assert that the agreement between the defendants and Pelican

is unenforceable under Mexican law because it was not reduced to writing. (Doc. 

64 at 29-30). For this proposition they rely on a citation to an obscure treatise or 

handbook and a sentence fragment from a 1993 law review article. The 

defendants deny that Mexican law applies to the agreement but continue that, in 

any event, the plaintiffs have offered inadequate proof of what Mexican law 

requires in the circumstances presented here. (Doc. 71 at 24-25).

Assuming without deciding that Mexican law applies, the Court agrees that 

the plaintiffs’ effort to prove the substance of that law is not up to the task. The 

plaintiffs offer no Mexican cases or statutes, and they do not even favor the Court 

with a copy of the secondary materials on which they rely. Even if the list quoted 

by the plaintiffs is in fact, as they represent, a list of contracts that must be put in 

writing, they have not shown that the agreement at issue falls within any of the 

listed categories within the contemplation of Mexican law. Nor have they shown 

that the penalty for not reducing such an agreement to writing is unenforceability.9

Finally, they have not shown that, whatever Mexican law provided in 1993, it was 

not meaningfully different in 2005.

CONCLUSION

It is somewhat disconcerting to have a case putting over $3 million at stake 

come before the Court at this late stage with the parties apparently still unfamiliar 

 9 Instead, they merely cite the treatise or handbook for this proposition, with no 

supporting quotation from it.

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with the factual and legal issues that will govern its resolution.10 From the Court’s 

perspective, neither side has displayed grounds for feeling confident in its 

position. The immediate task before the Court, however, is only to resolve the 

pending motion. For the reasons set forth above, the plaintiffs’ motion for 

summary judgment is denied.

DONE and ORDERED this 2nd day of December, 2015.

s/ WILLIAM H. STEELE

CHIEF UNITED STATES DISTRICT JUDGE 

 10 This opinion touches on only a few of the many apparent shortcomings in the 

parties’ apprehension of, and preparedness to address, those factual and legal issues. 

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