Petition For Breach of Contract, Damages, Request For Accounting and Writ of Sequestration

ENERGY MANAGEMENT SERVICES, LLC DOCKET NO.
________________
VERSUS NINTH JUDICIAL DISTRICT COURT
THE CITY OF ALEXANDRIA, LOUISIANA PARISH OF RAPIDES, LOUISIANA
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PETITION FOR BREACH OF CONTRACT, DAMAGES,

REQUEST FOR ACCOUNTING AND WRIT OF SEQUESTRATION
NOW INTO COURT, through undersigned counsel, comes ENERGY MANAGEMENT
SERVICES, LLC (hereinafter referred to as EMS), a Louisiana limited liability company whose
principal place of business is located in Alexandria, Louisiana, who respectfully represents:
1.
Made defendant herein is the following:
THE CITY OF ALEXANDRIA, LOUISIANA (hereinafter referred to as THE CITY), a
Home Rule Charter Municipality of the State of Louisiana as a municipal corporation in Rapides
Parish, Louisiana.
JURISDICTION AND VENUE
2.
Jurisdiction and venue are proper in this Court for this proceeding pursuant to La. R.S.
13:5104(B).
EMS AND ITS CONTRACT WITH THE CITY
3.
EMS is a Louisiana-based auditing firm providing energy and utility auditing services
and expense reduction recovery analysis to, among others, Louisiana municipalities. EMS’s
services include, but are not limited to, the review of charges for the provision of electrical
services by various utilities.
4.
On May 11, 2004, the City and EMS entered into a Review and Recovery Agreement
(hereinafter referred to as the “2004 Contract”). The Scope of Services included the following:
EMS serves as an expense reduction and recovery analyst whose mission is to

examine, analyze, and audit the energy expenses of CLIENT and to make
recommendations to achieve savings and to identify finances owed to CLIENT
and assist with the recovery of said funds owed and/or due CLIENT. CLIENT
agrees that EMS will review all of CLIENT’s energy expenses charged to and
1
owed to CLIENT which was incurred prior to and during the audit, and such
review will include all of CLIENT’s vendors. This will include but not be limited
to all purchases or sales of energy to and by the CLIENT.
5.
The 2004 Contract provided, inter alia, for compensation of 50% “of the recovery of all
funds or credits received by CLIENT.”
6.
By ordinance, the Alexandria City Council authorized the Mayor to enter into the 2004
Contract. The Mayor in fact signed the 2004 Contract on behalf of the City.
7.
EMS provided services to the City in conformity with the 2004 Contract.
8.
On March 16, 2006, the City and EMS entered into a “Review and Recovery Agreement
Amendment” (hereinafter referred to as the “2006 Contract”). The 2006 Contract is attached
hereto as Exhibit 1 and is made a part hereof.
9.
The 2006 Contract was negotiated in good faith on the part of EMS. EMS had no reason
to believe that the City was not negotiating the contract in good faith.
10.
Pursuant to Ordinance No. 88-2006, the Alexandria City Council authorized the Mayor to
enter into the 2006 Contract and acknowledged that EMS had performed its obligations:
“WHEREAS, it is acknowledged herein that Energy Management Services, LLC has performed
under the original May 11, 2004 contract for purposes of meetings its agreements there
under. . . .” Ordinance No. 88-2006 is attached hereto as Exhibit 2 and is made a part hereof.
11.
Whereas the 2006 Contract is captioned as an amendment, all terms were restated in full.
12.
The City acknowledged that EMS was indispensable in developing its claims against
Cleco Corporation: “WHEREAS, it is acknowledged herein that ENERGY MANAGEMENT
SERVIECS, L.L.C. has therefore performed under the original May 11, 2004 contract for
purposes of meeting its agreements thereunder.”
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THE CITY V. CLECO SUIT AND SETTLEMENT OF SAME
13.
On or about June 22, 2005, the City filed a “Petition for Damages” in this Court against
Cleco Corporation, Cleco Power, L.L.C., Cleco Marketing and Trading, L.L.C. Cleco Generation
Services, L.L.C., Cleco Midstream Resources, L.L.C., and Cleco Midstream (referred to
collectively herein as “Cleco”). On June 24, 2005, Cleco removed that matter to the United
States District Court, Western District of Louisiana under Docket No. 05-CV-1121-A.
14.
On February 24, 2010, the federal court entered a Judgment of Dismissal dismissing with
prejudice the City’s claims against Cleco. Via Resolution 8760-2010, adopted on February 23,
2010, the Alexandria City Council confirmed the continuation of authority under Ordinance No.
390-2008 to the Mayor to execute all contracts and documents to accomplish a resolution and
settlement of the City’s claims against Cleco.
15.
All evidence in the federal court suit was sealed by order of the federal court. On
information and belief, the City’s settlement with Cleco included cash consideration and other
non-cash consideration including, but not limited to, utility rebates.
COUNT 1—BREACH OF CONTRACT FOR FAILURE TO COMPENSATE
16.
Under the 2006 Contract, the City agreed to compensate EMS for its services:
For purposes of the matter involving litigation with Cleco Corporation existing at
the time of this Agreement, and since suit was filed and the CLIENT required to
hire attorneys to advise the interests of CLIENT, EMS shall reduce its recovery as
contained in the original Agreement to twenty percent (20%), which is multiplied
against the gross amount applicable to any recovery, awarded damages, or any
other credits or offsets received by CLIENT, subject to the terms of this
Agreement Addendum. This recovery shall be taken as a percentage of all gross
proceeds or credits received by CLIENT resulting from the material action of
EMS, including without limitation any form of damages and recovery from any
litigation, settlement, or determination. The fee due EMS shall be assessed
against the gross amount of all sums recovered to which the CLIENT may be
entitled as a result of CLIENT’s injuries claimed to result from losses. This fee
shall be calculated before the deduction of costs not paid by CLIENT; however,
notwithstanding any definition of damages to the contrary, in no event shall
CLIENT be required to share attorney fees with EMS.
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17.
As a result of the settlement of its claims with Cleco, the City has received or will receive
both cash and non-cash compensation from Cleco.
18.
EMS’s role as mandatary for the City was never revoked prior to the settlement by the
City with Cleco.
19.
Pursuant to the clear and express terms of the 2006 Contract, EMS is due and owed 20%
of any recovery received by the City.
20.
The City has failed to compensate EMS for the services it provided to it and for which
the City has expressly acknowledged were indispensable to the success of its claims against
Cleco.
21.
The City’s failure to compensate EMS under the 2006 Contract constitutes a breach of
said contract by the City.
COUNT 2—BREACH OF CONTRACT FOR FAILURE TO PROVIDE

DOCUMENTATION
22.
The allegations of Paragraphs 1 through 21 are adopted herein by reference.
23.
Under the 2006 Contract, the City was obligated to provide EMS with documentation
such that a present value of any non-cash component of the settlement with Cleco could be
computed: “To determine the rights hereunder, all settlement documents with regard to
disbursements and/or credits (recovery) by CLIENT shall be reviewable by EMS.”
24.
To date, the City has failed to provide any settlement documents to EMS in order to
determine the present value of the non-cash component of the settlement.
25.
The City’s failure to comply with its obligation to provide such documentation to EMS
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constitutes a breach of the 2006 Contract.
COUNT 3—REQUEST FOR ACCOUNTING
26.
The allegations of Paragraphs 1 through 25 are incorporated herein by reference.
27.
In the 2006 Contract, the City acknowledged that EMS had satisfactorily performed its
services: “For purposes of its litigation with Cleco Corporation, CLIENT agrees that EMS has
already performed by identifying potential amounts owed with regard to the utility provider
which led to actual litigation.”
28.
The City further agreed to the determination of a present value of any structured
settlement component:
In the event that any or all of that suit between Cleco Corporation and the
CLIENT, or any other litigation of those issues, is settled by way of a structured
settlement, the parties to this Agreement and Addendum may determine a present
value, if the contractual relationship should not be renewed, so that EMS is paid
in full for services rendered based on monies not yet received by CLIENT. To so
determine the rights hereunder, all settlement documents with regard to
disbursements and/or credits (recovery) by CLIENT shall be reviewable by EMS.
EMS acknowledges it has neither rights regarding settlement, nor standing to
object or modify any settlements of the CLIENT.
29.
Pursuant to the clear and express terms of the 2006 Contract, EMS is entitled to a full and
complete accounting by the City in order to calculate the present value of all settlement proceeds
received by the City in its settlement with Cleco.
30.
In furtherance of its right to determine the present value of any structured and/or non-
cash component of the settlement, EMS is entitled to review all settlement documents regarding
disbursement and/or credits received by the City.
31.
The City has failed to provide EMS with any documentation regarding the settlement.
32.
The City has failed to provide EMS with any documentation such that a present value of
any structured and/or non-cash settlement component can be determined.
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COUNT 4—UNCONSTITUTIONAL TAKING OF PROPERTY
33.
34.
Compensation to EMS was subject to the suspensive condition that the matter against
Cleco be settled or otherwise favorably resolved.
35.
As a result of the settlement of the City’s case against Cleco, the condition to EMS’s right
to compensation was fulfilled.
36.
Upon the happening of the suspensive condition, namely, the City’s settlement of its
claims against Cleco, a property right was created in EMS to its contingent fee for the services
performed. The City acknowledged in the 2006 Contract that EMS has already performed its
obligations under the 2004 Contract and 2006 Contract “by identifying potential amounts owed
with regard to the utility provider which led to actual litigation.”
37.
The actions of the City, in failing to satisfy its obligations under the 2006 Contract,
amount to an unconstitutional taking of EMS’s property.
38.
EMS prays for all relief to which is entitled, including reasonable attorneys’ fees and
court costs, as permitted by La. R.S. 13:5111.
COUNT 5—REQUEST FOR WRIT OF SEQUESTRATION
39.
40.
On information and belief, the City’s settlement with Cleco resulted in both cash and
non-cash components.
41.
On information and belief, the cash component of the settlement is still in Cleco’s
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possession.
42.
Pursuant to the clear and express terms of the 2006 Contract, EMS is entitled to and owed
20% of the value of any recovery by the City. The City stipulated and acknowledged in the 2006
Contract that EMS’s contingency fee had been earned. For that reason, EMS is entitled to be
placed in ownership of 20% of the cash component of the settlement to the extent such funds are
still in Cleco’s possession.
43.
EMS contends that it is within the power of the City to conceal, dispose of, or waste
EMS’s contingency fee if such funds are paid by Cleco to the City.
44.
Since the cash proceeds of the settlement are in the possession of Cleco and 20% of same
are the property of EMS, such 20% are not public property protected by La. Const. art. 12, § 10.
45.
Since EMS is claiming ownership of 20% of the settlement proceeds, EMS is entitled to
an order sequestering 20% of Cleco’s payment of the cash component of the settlement under La.
C.C.P. arts. 3501, 3571, and 3573. In addition, EMS prays for an order that Cleco be required to
deposit 20% of the cash component of the settlement into the registry of the Court pursuant to
La. C.C. art. 2949, 2950, and 2951.
46.
EMS requests that this Court set a reasonable amount for security pursuant to La. C.C.P.
art. 3574. EMS submits that any such security should be minimal since Cleco necessarily owes
the funds as a result of the settlement with the City and the City has stipulated and acknowledged
that it owes EMS under the 2006 Contract and that EMS has satisfied all of its obligations
thereunder.
47.
EMS requests and is entitled to a trial by jury.
WHEREFORE, Plaintiff ENERGY MANAGEMENT SERVICES, LLC prays that the
Defendant CITY OF ALEXANDRIA herein be served with a copy of this Petition and be made
to answer the same within the delays provided by law, and that after due proceedings, the Court
7
render a judgment in favor of ENERGY MANAGEMENT SERVICES, LLC and against
Defendant, CITY OF ALEXANDRIA, for all relief requested herein and for all other just and
equitable relief as permitted by law, including damages, attorneys’ fees, and court costs.
ENERGY MANAGEMENT SERVICES, LLC also prays for the issuance of a writ of
sequestration to be issued with reasonable security in an amount as set by the Court.
Respectfully submitted:
JOHNSON, SIEBENEICHER & INGRAM
__________________________________________
MICHAEL T. JOHNSON #14401
S. AARON SIEBENEICHER #23301
2757 Highway 28 East
Pineville, LA 71360
P.O. Box 648
Alexandria, La. 71309
Business Phone: (318) 484-3911
Business Fax: (318) 484-3585
AND
ALLEN & GOOCH

A Law Corporation
______________________________________
JAMES H. GIBSON #14285
DAVID J. AYO #28868
2000 Kaliste Saloom Rd Suite 400
Lafayette, LA 70508
P. O. Box 81129
Lafayette, LA 70598-1129
Direct Dial 337-291-1300
Direct Fax 337-291-1305
COUNSEL FOR ENERGY MANAGEMENT
SERVICES, L.L.C.
PLEASE SERVE DEFENDANT:
The City of Alexandria, Louisiana

Through its Mayor Jacques Roy
915 Third Street
Alexandria, LA 71301-8342
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ENERGY MANAGEMENT SERVICES, LLC DOCKET NO. ________________

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VERIFICATION
STATE OF LOUISIANA
PARISH OF ___________________
BEFORE ME, the undersigned Notary Public, duly commissioned and qualified in and
for the state and parish aforesaid, personally came and appeared DAVID PUGH, managing
member of ENERGY MANAGEMENT SERVICES, LLC, who was first duly sworn by me and
deposed that he has read the foregoing Petition for Breach of Contract, Damages, Request for
Accounting, and Writ of Sequestration, and that all of the allegations of fact contained in the said
Petition are true and correct.
______________________________
DAVID PUGH
Managing member of ENERGY
MANAGEMENT SERVICES, LLC
SWORN TO AND SUBSCRIBED before me, this ___ day of August, 2010, at
____________, Louisiana.
___________________________
NOTARY PUBLIC
Notary Number ____________
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ORDER OF SEQUESTRATION
CONSIDERING THE FOREGOING PETITION:
IT IS ORDERED that any and all cash settlement proceeds in the possession of Cleco
Corporation, Cleco Power, L.L.C., Cleco Marketing and Trading, L.L.C. Cleco Generation
Services, L.L.C., Cleco Midstream Resources, L.L.C., and/or Cleco Midstream arising out the
settlement of the matter captioned The City of Alexandria v. Cleco Corporation, et al, Civil
Action No. 05-CV-1121-A, United States District Court, Western District of Louisiana, are
sequestered and Cleco Corporation, Cleco Power, L.L.C., Cleco Marketing and Trading, L.L.C.
Cleco Generation Services, L.L.C., Cleco Midstream Resources, L.L.C., and Cleco Midstream
are ordered to deposit with the Rapides Parish Clerk of Court the amount of any and all such
cash settlement proceeds.
IT IS ORDERED that ENERGY MANAGEMENT SERVICES, INC. post security in the
amount of __________________.00 for this sequestration.
Alexandria, Louisiana, this _____ day of ______________, 2010.
______________________________
Judge, 9th Judicial District Court
PLEASE SERVE:
THE CITY OF ALEXANDRIA, LOUISIANA

Through its Mayor Jacques Roy
915 Third Street
Alexandria, LA 71301-8342
CLECO CORPORATION, CLECO POWER, L.L.C., CLECO MARKETING AND

TRADING, L.L.C. CLECO GENERATION SERVICES, L.L.C., CLECO MIDSTREAM
RESOURCES, L.L.C., AND/OR CLECO MIDSTREAM
Through their agent for service of process,
Mark Pearce
2030 Donahue Ferry Road
Pineville, LA 71360
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__________________________________________
Pineville, LA 71360
P.O. Box 648
Business Fax: (318) 484-3585
AND
ALLEN & GOOCH

A Law Corporation
______________________________________
DAVID J. AYO #28868
2000 Kaliste Saloom Rd Suite 400
Lafayette, LA 70508
P. O. Box 81129
Lafayette, LA 70598-1129
Direct Dial 337-291-1300
Direct Fax 337-291-1305
COUNSEL FOR PLAINTIFF,
ENERGY MANAGEMENT SERVICES, L.L.C.
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ORDER
IT IS ORDERED that this matter be heard as a jury trial upon plaintiff, ENERGY
MANAGEMENT SERVICES, L.L.C., posting bond in the amount of
$_______________________ with good and solvent surety.
Alexandria, Louisiana, this _______ day of __________________, 2010.
________________________________________
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JUDGE
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REQUEST FOR NOTICE OF TRIAL DATE, ETC.
PLEASE TAKE NOTICE that MICHAEL T. JOHNSON, S. AARON SIEBENEICHER,
JAMES H. GIBSON and DAVID J. AYO, attorneys for plaintiff, ENERGY MANAGEMENT
SERVICES, L.L.C., do hereby request written notice of the date of trial of the above matter, as
well as notice of all hearings, (whether on merits or otherwise), orders, judgments and
interlocutory decrees, and any and all formal steps taken by the parties herein, the Judge or any
member of the Court or Clerk of Court's office, as provided in Louisiana Code of Civil
Procedure Articles 1572, 1913 and 1914. I hereby certify that a copy of this Notice has this date
been forwarded to all parties by depositing same in the United States Mail, postage pre-paid and
properly addressed.
____________________________________
Pineville, LA 71360
P.O. Box 648
Business Fax: (318) 484-3585
AND
ALLEN & GOOCH

A Law Corporation
__________________________________
DAVID J. AYO, #28868
2000 Kaliste Saloom Road, Suite 400
Post Office Box 81129
Lafayette, Louisiana 70598-1129
Direct Dial: (337) 291-1300
Direct Fax: (337) 291-1305
ATTORNEYS FOR ENERGY MANAGEMENT
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SERVICES, L.L.C.
This _________ day of August, 2010.
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Petition For Breach of Contract, Damages, Request For Accounting and Writ of Sequestration

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ENERGY MANAGEMENT SERVICES, LLC DOCKET NO.

VERSUS NINTH JUDICIAL DISTRICT COURT

THE CITY OF ALEXANDRIA, LOUISIANA PARISH OF RAPIDES, LOUISIANA