NOT RECOMMENDED F OR FUL L -TEXT PUB L I CATI ON File Na me: 12a0268n.06 No. 10-6360 UNI TED STATES COURT OF A PPEAL S FOR THE SI XTH CI RCUI T

MI KE L AI RSEN, Plaintif f-Appellant , v. J I M FI GUERADO, Defendant-

Appellee , and MI KE NEVE S, Defendant

. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ON APPEAL FR OM T HE UNI TED STATES DI STRI CT COURT FOR T HE EASTERN DI STRI CT OF KE NTUCKY

O P I N I O N

BEF ORE: COL E and STRANCH, Circuit J udg es; CARR, Dist rict Judge. * COL E, Circuit J udg e. Plaintiff Mike L airsen broug ht suit ag ainst J im F igue rado and Mike Neve s, alleg ing that he was en t itled to compensa tion for his role in fac ilitating the Def endants’ purcha se of share s in the limit ed-liability company that owned the Grider Hill Marina. The district court g rante d summary judgme nt to the Def endants on all o f L airsen’s claims, holding that the transac tion was a rea l-estate transac tion, and as such L airsen was not entitled to compensa tion

The Honora

ble J ames G. Carr, Senior United States District J udg e for the Norther n District * of Ohio, sitting by

desig nation.No. 10-6360

Lairsen v. Figuerado et al. beca use he was not a li cense d rea l-estate broker u n d er Ke n t u ck y law. We REVERSE the di strict court’s r uling a nd REMAND for

further proce eding s consistent with this opi nion. I . BA CKGROUND The Grider Hill Marina (“the Marina” ) is loca t ed o n L ake Cumberland in Kentucky

. The fac ility consists of 750 wet slips, a ship store, lodging units, park cabins, renta l houseboats, and 311

acr es of land lease d from the Army Corps of Eng ineer s. I n 2006, the Marina was purcha sed by St. Thomas Glen Resorts, L L C (“STG” ), a limit ed-liability co m p an y created for the purpose of fac ilitating the sale. L airsen acte d as the broker of this de al on behalf of the previous owner of the Marina, with “an individual named Guzman” ending as the majority share holder of STG. Guzman, h o we ver, had difficulties servicing the debt he incurre d to purcha se the Marina, and reque s t ed L airsen to se ek out potential buy ers f or his share s. L airsen contac t ed Fi guera do in 2007 about purcha sing the majority interest in STG, and serious discussions beg an in “late J uly or ear ly Aug ust 2008.” I t is undisputed that L airsen provided “due diligenc e information” to Fig uera do reg arding the Marina and STG. Whil e the parties dispute the terms of the proposed transac tion, L airsen alleg es that the plan was for L airsen, Figuera do, and Neve s to enter into a partne rship to buy Guzman’s stake in STG, which was six ty -five perc ent of the total shares. The plan was ne ver r educe d to writing. At some point in October 2008, Fig uera do decide d to proce ed with buy ing Guzman’s share s without L airsen’ s participa tion. On October 15, 2008, Fi g uera do attempted to consumate his purcha se of the share s, appar ently without the involvement of L airsen. The proposed purcha se was

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Lairsen v. Figuerado et al. not consumat ed , an d Fifth Third Ba nk ultimately took possession of Guzman’s share s when he defa ulted on his loan with the bank. F igue rado the n purcha sed the STG shar es fr om Fifth Third. L airsen filed suit in the Fa y ette County , Kentucky , Circuit Court, alleg ing that (1) Fig uera do brea ched an ag ree ment with L airsen in which L airsen would act as a broker /ag ent for the purcha se of the share s of STG; (2) Fig uera do brea ched a partne rship or joint-venture ag ree ment with L airsen to purcha se the share s of STG; and (3) L airsen was entit l ed to compensa tion for the service s he provided to Fig uera do under a theory of quantum meruit

. The matter was re moved to the United States District Court for the Ea stern District of K entucky upon Fig uera do’s motion. The district court g rante d summary judgme nt to Fig uera do on all of L airsen’ s claims. Wit h reg ard to the broke r/ag ent and quantum meruit claims, the di strict court relied on K Y . R E V . S T A T . AN N . § 324.020(2), which provides that “[n] o person s h a ll prac tice rea l-estate broker ag e with respe ct to rea l estate

. . . unless [t ]he person holds a license to prac tice rea l-estate brokerag e.” Be cause prope rt y owned by the Marina included a lease with the Army Corps of Eng ineer s, and beca use lease s are included within Kentucky ’s statutory definition of rea l-estate, the district court rea soned that the sale of STG stock was properly considere d a rea l-estate transac tion. As such, the district court conclude d that the claim fell within the rule announce d by Kentucky courts that a non-license d person may not profit in any way from neg otiating a r eal- estate transac tion, and the claim was barr ed. Simi larly , L airsen’ s claim for brea ch of a partne rship or joint-venture ag ree ment was barr ed beca use the alleg ed ag ree ment to purcha se rea l estate was o ra l , whi ch violates the Kentucky Statute of Fr auds. ( Id. at 11.)

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Lairsen v. Figuerado et al. L airsen filed a motion to alter judgme nt, which the district court d en i ed

. This appea l followed.

I I . ANAL YSI S A g rant of summary judgme nt dismiss ing a claim or claims is revie wed de novo. La Quinta Corp. v. Heartland Props. LLC , 603 F.3d 327, 335 (6th Cir. 2010). At the summary judgme nt stag e, all evidenc e must be construed in the light most favor able to the non-m o v i n g p ar ty , in this case L airsen. La Quinta , 603 F.3d at 335. When viewing the evidenc e in that light, summary judgme nt is ap propriate only when “ther e is no g enuine dispute as to any materia l fac t and the movant is entitled to judgment a s a matter of law.” F ed. R. Civ. Pro. 56(c)(2)

. Be cause this is a diversity case , we are obliga ted to apply the law of Kentucky , the forum state. Mazur v. Y

oung , 507 F.3d 1013, 1016 (6th Cir. 2007). To the extent the issue is not square ly addre ssed by Kentucky courts, “we must attempt t o p redict what the

. . . [S tate] Supreme Court would do if confr onted with the same question.” Himmel v. Ford Motor Co., 342 F.3d 593, 598 (6th Cir. 2003). A. Broke r/Agent and Quantum Me ruit Cl aims The dist rict court conclude d that Fig uera do was entitl ed to summary judgme nt as a matter of law on L airsen’ s first and third claims—that Fig uera do brea ched an ag ree ment for L airsen to act

as his broker or ag ent, and that L airsen was entitled to compensa tion under a quantum meruit theory for the service s he provided to F igue rado to f acilitate the purcha se of STG stock. For both claims, the district c ourt relied on K Y . R E V . S T A T . AN N . § 324.020(2), which states that “[n] o person shall

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Lairsen v. Figuerado et al. prac tice rea l-estate- broker ag e with respe ct to rea l-estate located in this state unless

. . . [t ]he person holds a license to prac tice rea l estate broker ag e.” I t is undisput ed t hat L airsen did not possess a Kentucky rea l-estate license at the time of the transac tion. I t is further undisputed that Kentucky law prohibits an unlicensed party from profiting in any way from a rea l-estate- broker ag e transac tion. See Lockridge v. Hale , 764 S.W .2d 84, 87 (Ky

. Ct. App. 1989) (bar ring rec overy of commissions from unlicensed rea l-estate transac tions); Louisvill e Trust Co. v. Monsky , 444 S.W .2d 120, 121-22 (Ky

. 1969) (b ar ri n g quantum meruit claims from unlicensed rea l-estate transac tions). There fore , the district court conc luded that L airsen’ s claims wer e bar red. Kentucky law def ines rea l-estate br okera g e as: a si ng le, m ultiple, or continui ng act of dealing in time s h ar es o r options, selling or offe ring for sale, buy ing or offe ring to buy , neg otiating the purc h as e, sale or exchang e of rea l estate, eng ag ing in proper ty managem ent, leasing or offe ring to lease , renting or offe ring for rent, or ref err ing or offe ring to r efe r for the purpose of secur ing prospec ts, any rea l estate or improvements there on for others fo r a fee , compensa tion, or other valua ble consider ation . . . . K Y . R E V . S T A T . AN N . § 324.010(1). On its fac e, there is no aspec t of the proposed purcha se of STG share s that would qualify

under this def

inition. I t is true, as t he dis trict court points out, that STG lease s proper

ty from the Army Corps of Eng ineer s. But the proposed transac tion involved a transfe r in the owner ship of shares in STG from Guzman (and later Fifth Third Ba nk) to Fig uera do, not a chang e in the s tatus of t he lease. T h u s , the l ease was not being “exchang ed” during the course of the proposed transac tion—both befor e and a fter the transac tion, the l ease was to rema in in STG’s

name.

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Lairsen v. Figuerado et al. The district court conclude d that this is a distinction without a differ ence . We disag ree . Kentucky law makes clea r that share s in a limit ed-liability company are the persona l proper ty of the share holder. K

Y . R E V . S T A T . AN N . § 275.250. Thus, the proposed transac tion fac ially involved the sale of persona l, not rea l, proper ty , and a transac tion of persona l proper ty g ener ally would not require

a rea l-estate broker ’s license. The district court would have those share s, for all prac tical purposes, transfor med from persona l proper ty into rea l proper

ty

. We cannot square this result with the plain 1 text of the statute. The repor

ted case s the district court relied on are distinguishab le. I n Lockridge , the transac tion in question was the purcha se of a horse far m. 764 S.W .2d at 85. Whil e there was some

non-re al proper

ty involved in the t ra n s ac t ion, such as horses and far m equipment, there is no question that the hear

t of the transac tion was a transfe r of rea l pr operty

. See id. at 85 (desc ribing a transac tion wher e the value of the land was $5 milli on, and the other components amounted to less than $1 milli on). I n addition, while it appea rs that the buy ers formed a corpor ation to fac ilitate the purcha se of the rea l proper ty , title to the land was to pass from the orig inal owner to the corpor ation,

cre ating an “exchang e” of rea l proper ty

. This did not occur in the transac tion in this case . Simi larly , Kirkpatrick v. L awrence involved the complete sale of a busi ness from one party to an o t h er, with

The d istrict court cites to “K Y . R E V . S T A T . A

N N . § 275.010(a) ” as support for the 1 proposition that “the formation of [L L C’s] is not, howeve r, intended to provide relief from licensure statute s for those individuals serving as ag ents of those persons seeking to acquir e share s in [an L L C] .” The provision the d i s t ri ct court quotes from is in a subsection dealing with “Profe ssional limit ed liability companies,” and speaks to the reg ulation of those entities. See K Y . R E V . S T A T . A N N . §§ 275.010(3)( a)- (b), 275.015(24) - (25). STG was no t a p ro fe s s ional L L C, and thus was not g overne d by

§ 275.010(3). - 6 -No. 10-6360

Lairsen v. Figuerado et al.

a corr esponding transfe r of the lease to the new owner s. 908 S.W .2d 128, 129 (Ky

. Ct. App. 1995). This makes the tra

nsaction in Kirkpatrick

fundame ntally

differ ent from the tr ansac tion before us. F in a ll y , th e d is tr ict court’s interpre tation of Kentucky ’s rea l-estate- broker ag e law w o u ld le a d to problematic results. Since many businesses have some rea l-proper ty holdings, under the district court’s rea soning many business transa ct i o n s woul d require a licensed rea l-estate broker

. For example, such rea soning would require a stock broker attempting to buy or sell share s of a company that owns rea l proper

ty in Kentucky to possess a Kentucky broker ’s licen s e. T h i s would cre ate a signific ant burden on commerc ial transac tions that involve companies with a prese nce in Kentucky

. There is no authority that this is the intent of the Kentucky leg islature or Kentucky courts, nor does the text of Kentucky

law support such a

n interpre tation. For these rea sons, we conclude that the Kentucky courts would not find that the propo sed sale of STG share s was a r eal- estate tra nsaction re quiring the servic es of a rea l-estate br oker.

B. Statute of Frauds The district cour

t concluded tha t the Kentucky Statute of Fr auds, K Y . R E V . S T A T . AN N . § 371.010, barr ed L airsen’ s claim that Fig uera do brea ched a n implied partnership a g ree ment or joint venture. This holding is pre mised on the conc lusion that the proposed transa ction is a rea lestate tra nsaction. As discussed a

bove, we see no suppor

t for the district cour

t’s conclusion that Kentucky courts would conside r the propose d sale of STG sha res to be a

rea l-estate tr ansac tion. I I I . CONCL USI ON

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Lairsen v. Figuerado et al. We REVERSE t he district cour t’s g rant of summar

y judgme nt on all of L airsen’ s claims and re mand for f

urther pr ocee dings c onsistent with thi s opinion.

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