Justia U.S. 5th Circuit Court of Appeals Opinion SummariesArticles Posted in Commercial Law
FinServ Casualty Corp. v. Symetra Life Insurance Co.
Symetra appealed a jury verdict in favor of FinServ and A.M.Y. in an action involving structured settlement payments Symetra owed to two individuals. Both payments were subject to security interests held by FinServ and A.M.Y. in all of Rapid and RSL-3B's then-owned and after-acquired property.The Fifth Circuit held that filing a financing statement does not provide actual notice. Without an inquiry duty, the court held that Symetra's failure to find the financing statement was not "actual notice." Because the facts presented did not support the conclusion of actual notice, the court held that the district court should have granted judgment in favor of Symetra as a matter of law, since Symetra did not receive notice that the payments were assigned to FinServ and A.M.Y. until 2012, after its offset rights accrued. Therefore, Symetra's defenses were not subordinated to the security interests held by FinServ and A.M.Y. Accordingly, the court reversed and remanded, rendering judgment as a matter of law to Symetra. View "FinServ Casualty Corp. v. Symetra Life Insurance Co." on Justia Law
Fishback Nursery, Inc. v. PNC Bank
This case involved a lien contest among three creditors of a bankrupt commercial farm. The Fifth Circuit affirmed the district court's grant of summary judgment for PNC and found no error in the district court's ruling that the Nurseries' liens were not senior to PNC's lien on the bankrupt company's assets. The court held that the district court correctly rejected the Nurseries' argument that any choice of law provision in the Fishback-BFN contracts should control the law applicable to the Nurseries' lien dispute with PNC; the Nurseries failed to show that the district court misapplied either the Texas or federal choice-of-law rules; and Fishback failed to comply, substantially or otherwise, with Oregon’s notice requirement via a UCC financing statement. View "Fishback Nursery, Inc. v. PNC Bank" on Justia Law
Posted in: Commercial Law
Coastal Agricultural Supply v. JP Morgan Chase Bank, N.A.
Coastal filed suit against Chase Bank, asserting claims of conversion and negligence under the Texas Uniform Commercial Code (UCC) and money had and received under the common law. At issue on interlocutory appeal was whether section 3.405 of the UCC can serve as an affirmative defense to a common law "money and received" claim and whether settlement credits in Texas reduce the nonsettling defendant's liability rather than the plaintiff's total loss. The court concluded that the money had and received claim as applied in this situation must simply incorporate the affirmative defense provided by section 3.405. Therefore, the district court did not err in its determination that section 3.405 could so be applied. Further, the district court was correct in holding that the settlement credit should be applied to reduce the nonsettling defendant's liability, not the plaintiff's total loss. On remand, however, the district court must give Coastal an opportunity to demonstrate that allocation of the settlement amount is appropriate. Accordingly, the court affirmed and remanded for further proceedings.View "Coastal Agricultural Supply v. JP Morgan Chase Bank, N.A." on Justia Law
Westlake Petrochemicals, LLC v. United Polychem, Inc.
Defendant United Polychem, Inc. (UPC) and Lynne Van Der Wall (collectively, Appellants) and Plaintiff Westlake Petrochemicals, LLC (Westlake) appealed different results of a jury trial. At the core of the trial was an agreement between UPC as buyer and Westlake as seller of ethylene, a petroleum product. The jury found that (1) the parties had formed a binding contract, (2) UPC breached that contract, and, as a result, (3) UPC was liable to Westlake for $6.3 million in actual damages and $633,200 in attorneys fees. The district court also held Van Der Wall jointly and severally liable under the terms of a guaranty agreement. The Fifth Circuit Court of Appeals affirmed in part and reversed and remanded in part, holding (1) a binding contract was established, (2) the district court applied the incorrect measure of damages, and (3) Van Der Wall, as UPC's president, was not jointly and severally liable with UPC for the jury verdict under the terms of the guaranty. The Court vacated the damages award and remanded for the district court to calculate the damages under Tex. Bus. & Com. Code Ann. 2.708(b). View "Westlake Petrochemicals, LLC v. United Polychem, Inc." on Justia Law
Jones, Jr. v. Wells Fargo Bank, N.A.
Court-appointed receiver brought suit against Wells Fargo for conversion and breach of contract with respect to a cashier's check purchased by W Financial Group that Wells Fargo reaccepted for deposit into an account other than that of the named payee, without the proper endorsement. The district court found Wells Fargo liable for conversion. On appeal, Wells Fargo argued that the district court erred in finding that it converted the check and in rejecting certain defenses. The court held that because Wells Fargo made payment on the cashier's check to CA Houston, an entity that was not entitled to enforce the instrument, Wells Fargo was liable for conversion under Tex. Bus. & Comm. Code 3.3420. The court also agreed that Wells Fargo was liable for conversion because it deposited the cashier's check without the necessary indorsement. The court further held that Wells Fargo could not rely upon the condition precedent in its Account Agreement to void liability for conversion of the cashier's check; the district court did not err in denying Wells Fargo's in pari delicto defense; and the court need not address the breach of contract issue. Accordingly, the judgment was affirmed.