Justia U.S. 5th Circuit Court of Appeals Opinion Summaries

A Mississippi statute empowers boards of supervisors to contract “by the year” for legal counsel. The Hinds County Board of Supervisors hired Plaintiff and his law firm to perform legal work for the County. Plaintiff’s contracts with the County were each for a one-year term. But before the year was up, an election flipped the board’s composition, and the new board terminated both contracts. Plaintiff sued, arguing that the contracts required the County to pay him a fixed sum for the full year—even if the County no longer wanted his legal services. The district court granted the County’s motion to dismiss, reasoning that no statute expressly authorized the old board to bind the new one. On appeal, Plaintiff argued that the statutory phrase “by the year” gave the old board “express authority” to bind the new board.   The Fifth Circuit reversed the district court’s final judgment and remanded. The court held that Section 19-3-47 expressly authorized the board to bind successors. The court explained that the court’s research has revealed no statutes that would satisfy the standard that the district court relied on for express authorization. The court wrote that the Mississippi statute books are rife with laws that apparently would allow individual officers to bind their successors under Cleveland’s test but apparently would not allow officers to bind successors under the district court’s test. The court found that the phrase “by the year” is the kind of express authorization that Cleveland calls for. Any other reading leaves the phrase “by the year” as surplusage. View "Teeuwissen v. Hinds County, MS" on Justia Law

Inmarsat Global Limited and related entities(collectively, “Inmarsat”) operate a satellite network providing communications services to remote locations, including ships at sea. Inmarsat sells the services at retail to end-users and at wholesale to distributors. Speedcast International Limited was a leading Inmarsat distributor, purchasing Inmarsat’s services and providing them to its own customers. Speedcast is the debtor in the bankruptcy. Several contracts governed the business relationship among the parties. Their last contract terminated all of the creditors’ claims against the debtor except for narrowly defined “Permitted Claims.” The creditors sought a reversal of the district and bankruptcy court’s conclusion that a particular claim was not a permitted one.   The Fifth Circuit affirmed, holding that the Termination Agreement’s definitions of Released Claims and Permitted Claims are unambiguous. Consequently, the court wrote that it need not consider any extrinsic evidence. The court found Inmarsat’s pricing argument unpersuasive. The Shortfall Amount is not a payment for services delivered by Inmarsat to Speedcast. The SAA provides that the Shortfall Amount is part of the performance that Speedcast promised “[i]n exchange for” Inmarsat agreeing to grant a 30% discount. The Shortfall Amount, in turn, is not levied on the services that Inmarsat delivered to Speedcast; it is levied due to the customers Speedcast failed to provide. View "Inmarsat Global v. SpeedCast Intl" on Justia Law

Great Lakes Insurance, S.E. insured Hello Dolly VI, a boat owned by Gray Group Investments, L.L.C. The Hello Dolly sank in Pensacola, Florida, during a hurricane. Gray Group filed a claim under the insurance policy, Great Lakes denied coverage, and Great Lakes then sought a declaratory judgment that it properly did so. Specifically, Great Lakes faulted Gray Group for breaching the “hurricane protection plan” (the HPP) that Gray Group had submitted in response to Great Lakes’s “hurricane questionnaire” (the HQ). The issue on appeal is whether the HPP was incorporated by reference into the insurance policy and, if so, whether Gray Group breached the HPP.   The Fifth Circuit affirmed the district court’s ruling granting summary judgment for Great Lakes. The court explained that the HPP expressly identifies its contents, including the information in question, as warranties, providing that the insured “declare[s] that the particulars and answers in this form are correct and complete in every respect” and that “this declaration and warranty shall be incorporated in its entirety into any relevant policy of insurance.” Therefore, under the terms of the policy, as validly augmented by the HPP, Gray Group warranted that the Vessel would be “located” at the Orleans Marina during hurricane season. Gray Group’s breach of that warranty voided the policy ab initio, such that Great Lakes properly denied coverage. View "Great Lakes Ins v. Gray Group Invst" on Justia Law

Copart of Connecticut, Inc. (“Copart”) is a subsidiary of Copart, Inc., an online car-auction company that sells used, wholesale, and repairable vehicles. Copart owns several parcels of land in Lexington County, South Carolina, on which it operates “machine salvage junkyard and vehicle wash facilities.” This appeal concerns whether Copart’s insurer must defend or indemnify Copart with respect to a lawsuit filed against it in South Carolina Defendant Copart of Connecticut appealed the district court’s grant of summary judgment in favor of Plaintiffs Liberty Mutual Fire Insurance Company and Liberty Insurance Corporation.   The Fifth Circuit affirmed summary judgment as to Liberty’s duty to defend Copart in the Underlying Suit. The court reversed summary judgment as to Liberty’s duty to indemnify Copart with respect to the Underlying Suit and remanded to the district court for further proceedings to determine Liberty’s indemnity obligation, if any. The court explained that the duty to defend is negated here because the Livingston Plaintiffs only allege damage caused, either in whole or in part, by pollutants. But evidence arising from or related to the Underlying Suit may reveal that non-pollutants caused Plaintiffs’ damage. If, for example, relevant evidence shows that the plaintiffs’ “cloudy water” was caused only by sand and sediment, then the pollution exclusion may not apply. If this were so, Liberty may be obligated to indemnify Copart. View "Liberty Mutual Fire Ins v. Copart of CT" on Justia Law

Plaintiff, on behalf of a putative class of students, sued Southern Methodist University (“SMU”) for refusing to refund tuition and fees after the university switched to remote instruction during the COVID-19 pandemic. The district court dismissed Plaintiff’s complaint for failure to state a claim.   The Fifth Circuit reversed that decision in light of King v. Baylor University, 46 F.4th 344 (5th Cir. 2022), which was issued after the district court’s ruling and which teaches that Hogan adequately pled a breach-of-contract claim. Alternatively, the district court held that Texas’s Pandemic Liability Protection Act (“PLPA”) retroactively bars Plaintiff’s claim for monetary relief and is not unconstitutionally retroactive under the Texas Constitution. That latter ruling raises a determinative-but-unsettled question of state constitutional law, which the court certified to the Texas Supreme Court: Does the application of the Pandemic Liability Protection Act to Plaintiff’s breach-of-contract claim violate the retroactivity clause in article I, section 16 of the Texas Constitution? View "Hogan v. Southern Methodist Univ" on Justia Law

Mingtel, a Texas-based company, ordered two batches of computer tablets from Shenzen Synergy Digital, a Chinese company, hoping to resell them through the Home Shopping Network (“HSN”). The first batch bombed on HSN, with customers complaining about slow speeds and flawed screens. Mingtel then rejected the second batch out of hand. Synergy sued for breach of contract; Mingtel countersued, alleging Synergy provided nonconforming goods. The district court sided with Synergy.   The Fifth Circuit affirmed. The court explained that the district court found Mingtel did not examine the tablets as soon as practicable because it failed to inspect them when they arrived in the United States. Instead of testing those capabilities upon the tablets’ arrival in the United States, Mingtel shipped them directly to HSN’s warehouse and examined them only after they were sold and returned by customers. The court explained that it agreed with the district court that, given those facts, Mingtel did not timely inspect the tablets. It follows that Mingtel did not provide Synergy with a notice of nonconformity within a reasonable time. The court wrote that Mingtel was obligated to pay for the tablets and take delivery of them. Because it failed to do so, the district court properly found Mingtel liable. View "Shenzen Synergy Digital v. Mingtel" on Justia Law

Plaintiff-Appellant Weyerhaeuser NR Company (“NR”) entered into a manufacturing agreement with Simsboro Coating Services, LLC (“Simsboro”). That agreement required Simsboro to acquire commercial general liability insurance, which it obtained from Defendants-Appellees Burlington Insurance Company (“BIC”) and Evanston Insurance Company (“EIC”). It further required that “Weyerhaeuser and its Subsidiaries” be named as additional insureds. However, NR’s parent company, Weyerhaeuser Company (“W. Co.”), was never added to the insurance policies that Simsboro obtained from EIC and BIC. This insurance coverage dispute arose after several personal injury lawsuits were filed against Simsboro and W. Co. in state court. After those lawsuits settled, W. Co. and NR sued BIC and EIC, demanding that they defend and indemnify W. Co. and NR. EIC and BIC then filed Rule 12(b)(6) motions, which were granted by the district court.The Fifth Circuit affirmed the district court’s dismissal of Weyerhaeuser’s breach of contract claims. The court concluded that Defendants had no duty to defend or indemnify W. Co. and NR as additional insureds or as third-party beneficiaries to the CGL Policies or Excess Policy. The court explained that it was satisfied that BIC and EIC had no duty to defend W. Co. and NR as thirdparty beneficiaries. The indemnification inquiry, however, is fact intensive and may incorporate extrinsic evidence. The district court explained that because NR is listed on the CGL Policies as an additional insured and the CGL Policies might cover Simsboro’s indemnification obligation arising from the Agreement, NR might be a third-party beneficiary of the policies with respect to indemnification. View "Weyerhaeuser v. Burlington Insurance" on Justia Law

Plaintiff appealed the district court’s summary judgment of his claims against Safeco Insurance Company of Indiana (“Safeco”) for violating Section 541 and Section 542 of the Texas Insurance Code.   The Fifth Circuit explained that in 2017, the Texas legislature amended Section 542, raising an important issue of Texas insurance law as to which there is no controlling Texas Supreme Court authority, and the authority from the intermediate state appellate courts provides insufficient guidance. Thus, the court certified the following question of state law to the Supreme Court of Texas: In an action under Chapter 542A of the Texas Prompt Payment of Claims Act, does an insurer’s payment of the full appraisal award plus any possible statutory interest preclude recovery of attorney’s fees? View "Rodriguez v. Safeco" on Justia Law

A Listeria outbreak led to a shutdown of Blue Bell factories and a nationwide recall of its products. Consequently, Blue Bell suffered a substantial financial loss. A shareholder of Blue Bell Creameries brought a derivative action against Blue Bell’s directors and officers, alleging a breach of fiduciary duties. The shareholder, on behalf of Blue Bell, alleged that Blue Bell’s officers and directors breached their fiduciary duties of care and loyalty by failing “to comply with regulations and establish controls.” The Blue Bell Defendants appealed the district court’s grant of summary judgment in favor of Discover Property & Casualty Insurance Company and the Travelers Indemnity Company of Connecticut.   The Fifth Circuit affirmed. Here, only the duty to defend is at issue because the parties have stipulated that “If the district court finds there is no duty to defend, it may also find there is no duty to indemnify, but otherwise the duty to indemnify will not be a subject of the Parties’ motions.” Accordingly, the court wrote that it is confined by Texas’s “eight-corners rule,” which directs courts to determine an insurer’s duty to defend based on: (1) the pleading against the insured in the underlying litigation and (2) the terms of the insurance policy. The court explained that while it disagrees with the district court’s determination as to whether the directors and officers are “insureds” in relation to the shareholder lawsuit, it agreed with its determination that the complaint in the shareholder lawsuit does not allege any “occurrence” or seek “damages because of bodily injury.” Each issue is independently sufficient for affirmance. View "Discover Property Cslty v. Blue Bell" on Justia Law

Plaintiff was arrested and released on a surety bond provided by Big Bubba’s. Plaintiff was formally charged with the same offense in April 2016, but due to an epileptic seizure, he was hospitalized before receiving notice of the indictment. As a result, he was incapacitated for several months, but according to Plaintiff, his wife stayed in touch with Big Bubba’s on his behalf. Big Bubba’s filed a petition with the trial court, requesting an arrest warrant for Plaintiff on the grounds that he had failed to fulfill his contractual obligations by neglecting to check in and provide contact information. The trial court granted the request, and Plaintiff was arrested pursuant. Plaintiff sued Big Bubba’s, alleging that it violated their agreement and caused him to be wrongfully arrested by presenting misleading information to the court. The district court adopted the magistrate judge’s Memorandum and Recommendation and granted Big Bubba’s motion to dismiss. On appeal, Plaintiff contends that his false imprisonment and contract claims were wrongly dismissed.   The Fifth Circuit affirmed the judgment of the district court as to Plaintiff’s false imprisonment claim, and the court reversed and remanded his contract claim. The court explained that while Plaintiff’s false imprisonment claim was properly dismissed, his contract claim was not. The district court held that principals, such as Plaintiff, who seek to contest a surrender, are “limited to the remedy” set out in Tex. Occ. Code Section 1704.207(b)–(c). Thus the court concluded that Plaintiff is not limited to this remedy and therefore reverse the dismissal of his claim. View "Jeanty v. Big Bubba's" on Justia Law