## Facts

- Caillouet leased waterfront land in Lafourche Parish, Louisiana, to a lessee whose interest was assigned to Fourchon.
- With the owner’s consent, Fourchon subleased part of the tract to Milchem for a drilling-fluids business.
- The sublease barred Milchem from assigning or subleasing without prior written consent of Fourchon and Caillouet, and stated such consent would not be withheld unreasonably.
- On February 15, 1986, Milchem subleased to Chromalloy without prior notice or consent.
- Soon after, Chromalloy cancelled a separate adjacent lease it held with Fourchon.
- Fourchon learned of the unauthorized sublease on March 3, 1986, gave written notice of breach, and demanded cure within ten days under the sublease.
- On May 12, 1986, Milchem and Chromalloy sought Fourchon’s written consent; Fourchon refused based on business concerns, including Chromalloy’s cancelled adjacent lease and uncertainty about Chromalloy’s proposed operations and commitment.
- Fourchon sued for a declaration that the Milchem–Chromalloy sublease was void and sought accelerated rent (about $1,080,000); it obtained a writ of sequestration over movables on the premises to enforce a lessor’s privilege.
- Milchem counterclaimed that the sequestration interfered with access to its property.
- The district court found breach, awarded accelerated rent, limited attorney-fee recovery to a reasonable amount, and rejected Milchem’s sequestration-based damages claim.

## Issues

1. Whether Milchem breached the sublease by executing a sublease to Chromalloy without prior written consent from Fourchon and the owner.
2. Whether Fourchon unreasonably withheld consent within the meaning of the consent clause.
3. Whether Milchem’s later attempt to obtain consent constituted a timely and effective contractual cure.
4. Whether Fourchon could enforce the rent-acceleration clause based on the unauthorized sublease and/or Milchem’s nonpayment of rent.
5. Whether the writ of sequestration wrongfully denied Milchem access to the premises or its property, entitling Milchem to damages.
6. Whether the court could reduce contractually specified attorney fees to a reasonable amount.

## Decision

- The Fifth Circuit largely affirmed the judgment.
- Milchem breached the sublease by subleasing without the required prior written consents.
- Fourchon’s refusal to consent was not unreasonable because it rested on legitimate business reasons.
- Milchem did not timely cure; the effort to obtain consent came well after the contract’s ten-day cure period and did not undo the completed breach.
- Rent acceleration was enforceable; Milchem’s nonpayment of rent provided an independent basis for acceleration.
- Milchem failed to prove compensable damages from sequestration because the record did not show actual denial of access or unreasonable interference.
- The district court properly reduced attorney fees to a reasonable amount notwithstanding the contract’s percentage formula.

## Legal Principles

- A lease clause requiring prior written consent to assign or sublease is enforceable; a transfer made without the required consent constitutes a breach.
- When consent may not be unreasonably withheld, the lessor may refuse consent for legitimate business reasons; the tenant bears the burden to show the refusal was arbitrary.
- Contractual cure periods are enforced as written; an untimely request for consent does not constitute an effective cure of an unauthorized sublease.
- A clear rent-acceleration clause may be enforced upon default, including where nonpayment of rent is an independent breach supporting acceleration.
- A party seeking damages for alleged wrongful sequestration must prove actual, unreasonable interference and resulting loss; speculative or unproven access denial is insufficient.
- Under Louisiana law, courts may review and reduce contractual attorney-fee provisions to a reasonable amount if the contractual figure is excessive.

## Conclusion

The court held that Milchem’s unauthorized sublease breached an express consent condition, that Fourchon reasonably withheld consent and could enforce rent acceleration (including for nonpayment), that Milchem failed to prove sequestration-related damages, and that attorney fees could be limited to a reasonable amount despite the contract’s stated formula.


Fourchon Docks, Inc. v. Milchem Inc., 849 F.2d 1561 (5th Cir. 1988)