                  NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                             File Name: 12a0268n.06

                                           No. 10-6360
                                                                                        FILED
                              UNITED STATES COURT OF APPEALS
                                   FOR THE SIXTH CIRCUIT                           Mar 09, 2012
                                                                             LEONARD GREEN, Clerk

MIKE LAIRSEN,                                            )
                                                         )       ON APPEAL FROM THE
       Plaintiff-Appellant,                              )       UNITED STATES DISTRICT
                                                         )       COURT FOR THE EASTERN
v.                                                       )       DISTRICT OF KENTUCKY
                                                         )
JIM FIGUERADO,                                           )                          OPINION
                                                         )
       Defendant-Appellee,                               )
                                                         )
and                                                      )
                                                         )
MIKE NEVES,                                              )
                                                         )
       Defendant.




BEFORE:        COLE and STRANCH, Circuit Judges; CARR, District Judge.*

       COLE, Circuit Judge. Plaintiff Mike Lairsen brought suit against Jim Figuerado and Mike

Neves, alleging that he was entitled to compensation for his role in facilitating the Defendants’

purchase of shares in the limited-liability company that owned the Grider Hill Marina. The district

court granted summary judgment to the Defendants on all of Lairsen’s claims, holding that the

transaction was a real-estate transaction, and as such Lairsen was not entitled to compensation




       *
         The Honorable James G. Carr, Senior United States District Judge for the Northern District
of Ohio, sitting by designation.
No. 10-6360
Lairsen v. Figuerado et al.

because he was not a licensed real-estate broker under Kentucky law. We REVERSE the district

court’s ruling and REMAND for further proceedings consistent with this opinion.

                                         I. BACKGROUND

        The Grider Hill Marina (“the Marina”) is located on Lake Cumberland in Kentucky. The

facility consists of 750 wet slips, a ship store, lodging units, park cabins, rental houseboats, and 311

acres of land leased from the Army Corps of Engineers. In 2006, the Marina was purchased by St.

Thomas Glen Resorts, LLC (“STG”), a limited-liability company created for the purpose of

facilitating the sale. Lairsen acted as the broker of this deal on behalf of the previous owner of the

Marina, with “an individual named Guzman” ending as the majority shareholder of STG. Guzman,

however, had difficulties servicing the debt he incurred to purchase the Marina, and requested

Lairsen to seek out potential buyers for his shares.

        Lairsen contacted Figuerado in 2007 about purchasing the majority interest in STG, and

serious discussions began in “late July or early August 2008.” It is undisputed that Lairsen provided

“due diligence information” to Figuerado regarding the Marina and STG. While the parties dispute

the terms of the proposed transaction, Lairsen alleges that the plan was for Lairsen, Figuerado, and

Neves to enter into a partnership to buy Guzman’s stake in STG, which was sixty-five percent of the

total shares. The plan was never reduced to writing.

        At some point in October 2008, Figuerado decided to proceed with buying Guzman’s shares

without Lairsen’s participation. On October 15, 2008, Figuerado attempted to consumate his

purchase of the shares, apparently without the involvement of Lairsen. The proposed purchase was



                                                 -2-
No. 10-6360
Lairsen v. Figuerado et al.

not consumated, and Fifth Third Bank ultimately took possession of Guzman’s shares when he

defaulted on his loan with the bank. Figuerado then purchased the STG shares from Fifth Third.

       Lairsen filed suit in the Fayette County, Kentucky, Circuit Court, alleging that (1) Figuerado

breached an agreement with Lairsen in which Lairsen would act as a broker/agent for the purchase

of the shares of STG; (2) Figuerado breached a partnership or joint-venture agreement with Lairsen

to purchase the shares of STG; and (3) Lairsen was entitled to compensation for the services he

provided to Figuerado under a theory of quantum meruit. The matter was removed to the United

States District Court for the Eastern District of Kentucky upon Figuerado’s motion.

       The district court granted summary judgment to Figuerado on all of Lairsen’s claims. With

regard to the broker/agent and quantum meruit claims, the district court relied on KY . REV . STAT .

ANN . § 324.020(2), which provides that “[n]o person shall practice real-estate brokerage with respect

to real estate . . . unless [t]he person holds a license to practice real-estate brokerage.” Because

property owned by the Marina included a lease with the Army Corps of Engineers, and because

leases are included within Kentucky’s statutory definition of real-estate, the district court reasoned

that the sale of STG stock was properly considered a real-estate transaction. As such, the district

court concluded that the claim fell within the rule announced by Kentucky courts that a non-licensed

person may not profit in any way from negotiating a real-estate transaction, and the claim was barred.

Similarly, Lairsen’s claim for breach of a partnership or joint-venture agreement was barred because

the alleged agreement to purchase real estate was oral, which violates the Kentucky Statute of

Frauds. (Id. at 11.)



                                                 -3-
No. 10-6360
Lairsen v. Figuerado et al.

       Lairsen filed a motion to alter judgment, which the district court denied. This appeal

followed.



                                           II. ANALYSIS

       A grant of summary judgment dismissing a claim or claims is reviewed de novo. La Quinta

Corp. v. Heartland Props. LLC, 603 F.3d 327, 335 (6th Cir. 2010). At the summary judgment stage,

all evidence must be construed in the light most favorable to the non-moving party, in this case

Lairsen. La Quinta, 603 F.3d at 335. When viewing the evidence in that light, summary judgment

is appropriate only when “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. Pro. 56(c)(2).

       Because this is a diversity case, we are obligated to apply the law of Kentucky, the forum

state. Mazur v. Young, 507 F.3d 1013, 1016 (6th Cir. 2007). To the extent the issue is not squarely

addressed by Kentucky courts, “we must attempt to predict what the . . . [State] Supreme Court

would do if confronted with the same question.” Himmel v. Ford Motor Co., 342 F.3d 593, 598 (6th

Cir. 2003).

A. Broker/Agent and Quantum Meruit Claims

       The district court concluded that Figuerado was entitled to summary judgment as a matter

of law on Lairsen’s first and third claims—that Figuerado breached an agreement for Lairsen to act

as his broker or agent, and that Lairsen was entitled to compensation under a quantum meruit theory

for the services he provided to Figuerado to facilitate the purchase of STG stock. For both claims,

the district court relied on KY . REV . STAT . ANN . § 324.020(2), which states that “[n]o person shall

                                                 -4-
No. 10-6360
Lairsen v. Figuerado et al.

practice real-estate-brokerage with respect to real-estate located in this state unless . . . [t]he person

holds a license to practice real estate brokerage.” It is undisputed that Lairsen did not possess a

Kentucky real-estate license at the time of the transaction. It is further undisputed that Kentucky law

prohibits an unlicensed party from profiting in any way from a real-estate-brokerage transaction. See

Lockridge v. Hale, 764 S.W.2d 84, 87 (Ky. Ct. App. 1989) (barring recovery of commissions from

unlicensed real-estate transactions); Louisville Trust Co. v. Monsky, 444 S.W.2d 120, 121-22 (Ky.

1969) (barring quantum meruit claims from unlicensed real-estate transactions). Therefore, the

district court concluded that Lairsen’s claims were barred.

        Kentucky law defines real-estate brokerage as:

        a single, multiple, or continuing act of dealing in time shares or options, selling or
        offering for sale, buying or offering to buy, negotiating the purchase, sale or
        exchange of real estate, engaging in property management, leasing or offering to
        lease, renting or offering for rent, or referring or offering to refer for the purpose of
        securing prospects, any real estate or improvements thereon for others for a fee,
        compensation, or other valuable consideration . . . .

KY . REV . STAT . ANN . § 324.010(1). On its face, there is no aspect of the proposed purchase of STG

shares that would qualify under this definition. It is true, as the district court points out, that STG

leases property from the Army Corps of Engineers. But the proposed transaction involved a transfer

in the ownership of shares in STG from Guzman (and later Fifth Third Bank) to Figuerado, not a

change in the status of the lease. Thus, the lease was not being “exchanged” during the course of

the proposed transaction—both before and after the transaction, the lease was to remain in STG’s

name.




                                                  -5-
No. 10-6360
Lairsen v. Figuerado et al.

        The district court concluded that this is a distinction without a difference. We disagree.

Kentucky law makes clear that shares in a limited-liability company are the personal property of the

shareholder. KY . REV . STAT . ANN . § 275.250. Thus, the proposed transaction facially involved the

sale of personal, not real, property, and a transaction of personal property generally would not require

a real-estate broker’s license. The district court would have those shares, for all practical purposes,

transformed from personal property into real property.1 We cannot square this result with the plain

text of the statute.

        The reported cases the district court relied on are distinguishable. In Lockridge, the

transaction in question was the purchase of a horse farm. 764 S.W.2d at 85. While there was some

non-real property involved in the transaction, such as horses and farm equipment, there is no

question that the heart of the transaction was a transfer of real property. See id. at 85 (describing a

transaction where the value of the land was $5 million, and the other components amounted to less

than $1 million). In addition, while it appears that the buyers formed a corporation to facilitate the

purchase of the real property, title to the land was to pass from the original owner to the corporation,

creating an “exchange” of real property. This did not occur in the transaction in this case. Similarly,

Kirkpatrick v. Lawrence involved the complete sale of a business from one party to another, with



        1
          The district court cites to “KY . REV . STAT . ANN . § 275.010(a)” as support for the
proposition that “the formation of [LLC’s] is not, however, intended to provide relief from licensure
statutes for those individuals serving as agents of those persons seeking to acquire shares in [an
LLC].” The provision the district court quotes from is in a subsection dealing with “Professional
limited liability companies,” and speaks to the regulation of those entities. See KY . REV . STAT . ANN .
§§ 275.010(3)(a)-(b), 275.015(24) - (25). STG was not a professional LLC, and thus was not
governed by § 275.010(3).

                                                  -6-
No. 10-6360
Lairsen v. Figuerado et al.

a corresponding transfer of the lease to the new owners. 908 S.W.2d 128, 129 (Ky. Ct. App. 1995).

This makes the transaction in Kirkpatrick fundamentally different from the transaction before us.

       Finally, the district court’s interpretation of Kentucky’s real-estate-brokerage law would lead

to problematic results. Since many businesses have some real-property holdings, under the district

court’s reasoning many business transactions would require a licensed real-estate broker. For

example, such reasoning would require a stock broker attempting to buy or sell shares of a company

that owns real property in Kentucky to possess a Kentucky broker’s license. This would create a

significant burden on commercial transactions that involve companies with a presence in Kentucky.

There is no authority that this is the intent of the Kentucky legislature or Kentucky courts, nor does

the text of Kentucky law support such an interpretation.

       For these reasons, we conclude that the Kentucky courts would not find that the proposed sale

of STG shares was a real-estate transaction requiring the services of a real-estate broker.



B. Statute of Frauds

       The district court concluded that the Kentucky Statute of Frauds, KY . REV . STAT . ANN . §

371.010, barred Lairsen’s claim that Figuerado breached an implied partnership agreement or

joint venture. This holding is premised on the conclusion that the proposed transaction is a real-

estate transaction. As discussed above, we see no support for the district court’s conclusion that

Kentucky courts would consider the proposed sale of STG shares to be a real-estate transaction.

                                        III. CONCLUSION



                                                -7-
No. 10-6360
Lairsen v. Figuerado et al.

       We REVERSE the district court’s grant of summary judgment on all of Lairsen’s claims

and remand for further proceedings consistent with this opinion.




                                              -8-
