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

This dispute arose out of a complicated bankruptcy proceeding. On appeal, Lender challenged the district court's judgment which, in relevant part, disallowed Lender's claim for a contractual prepayment consideration. Applying Colorado law, a lender was not entitled to a prepayment penalty when the lender chooses to accelerate the note. Absent a clear contractual provision to the contrary or evidence of the borrower's bad faith in defaulting to avoid a penalty, a lender's decision to accelerate acts as a waiver of a prepayment penalty. In this instance, the plain language of the contract plainly provided that no Prepayment Consideration was owed unless there was an actual prepayment, whether voluntary or involuntary. Accordingly, the acceleration of the Note due to GCMM's default by nonpayment under Article 4 did not trigger the obligation to pay the Prepayment Consideration under Article 6. View "Bank of New York Mellon v. GC Merchandise Mart, L.L.C., et al." on Justia Law

Plaintiff filed suit against Wells Fargo in state court, raising claims related to Wells Fargo's foreclosure and Freddie Mac's attempts to evict plaintiff. Wells Fargo then removed the case to federal court where the district court dismissed all of plaintiff's claims. At issue on appeal was whether Wells Fargo could move for attorney's fees pursuant to Federal Rules of Civil Procedure 54(d)(2). Here, the deed of trust at issue provided for attorney's fees to compensate Wells Fargo, inter alia, for the prosecution or defense of a claim. The language of the contract and the nature of the claim were the dispositive factors concerning whether the fees were an element of damages or collateral litigation costs. In this instance the court concluded that the motions for attorney's fees provided by contract were permissible under Rule 54(d)(2). Accordingly, the court reversed and remanded. View "Richardson v. Wells Fargo Bank, N.A., et al." on Justia Law

Acting as receiver, the FDIC conveyed substantially all of WaMU's assets and liabilities to JPMorgan Chase, including certain long-term real-estate leases. At issue was whether the owners of the leased tracts could enforce the leases against Chase by virtue of the FDIC's conveyance. The court held that, in the interest of maintaining uniformity in the construction and enforcement of federal contracts, the landlords did not qualify as third-party beneficiaries. The court concluded, however, that the landlords have "standing" to prove the content of the Agreement and that the Agreement, properly construed, was a complete "assignment" sufficient to create privity of estate under Texas law. Accordingly, the court affirmed the judgment of the district court. View "Excel Willowbrook, L.L.C., et al. v. JPMorgan Chase Bank, N.A., et al." on Justia Law

John Johnson Jr. filed suit in state court against defendants, including Weeks Marine and Standard Concrete, for injuries he sustained when he fell from his crane while working on a project. This case concerned the terms of an indemnity agreement between Weeks Marine and Standard Concrete. Weeks Marine, the general contractor on the project, sought a declaration that Standard Concrete, Johnson's employer, was contractually obligated to defend and indemnify it in the underlying state court action. The court concluded that the indemnity agreement did not cover the underlying state court action and Weeks Marine pointed to no facts on appeal that lead the court to conclude otherwise. Accordingly, the court affirmed the district court's judgment in favor of Standard Concrete. View "Weeks Marine, Inc. v. Standard Concrete Products, Inc." on Justia Law

Plaintiff appealed the district court's grant of summary judgment for defendants on plaintiff's claims arising out of the threatened foreclosure on two residential investment properties he owned. The court concluded that the district court correctly determined that Deutsche Bank was a mortgagee and could proceed with the foreclosure action; as a non-party mortgagor, and without any evidence showing plaintiff to be an intended third-party beneficiary, the court concluded that plaintiff lacked the requisite standing to bring suit to enforce the terms of the Pooling & Services Agreement that governed the assignment of the mortgagor's notes; and the requirement in Tex. Prop. Code 51.0001(3) that the current mortgagee provide the notice required the court also to consider defendants' argument that quasi-estoppel under Texas law precluded plaintiff from challenging GMAC's status as mortgage servicer. The court affirmed the judgment of the district court. View "Farkas v. GMAC Mortgage, L.L.C., et al." on Justia Law

McLane filed suit to recover certain debts owed by Table Rock for goods and services provided by McLane. McLane also sought to recover debts from Scot Wederquist, owner of a 40% interest in and treasurer of Table Rock, by virtue of a guaranty agreement. On appeal, McLane challenged the district court's holding that Wederquist was not personally liable under the guarantee agreement. The court concluded that the guaranty only secured credit extended by PFS to its affiliates. Because McLane was not an affiliate of PFS, the Table Rock Debts were not secured by the guaranty. Accordingly, the court affirmed the judgment of the district court. View "McLane Foodservice Inc. v. Table Rock Restaurants, L.L.C., et al" on Justia Law

After South Louisiana Ethanol filed for bankruptcy, CHS filed suit contending that South Louisiana Ethanol's option contract with Plaquemines constituted the assignment of a litigious right under Louisiana law, entitling CHS to redeem the litigious right by reimbursing Plaquemines for the cost of the option contract plus interest. The district court granted Plaquemines's motion to dismiss. The court concluded that the sale fit within the statutory judicial-sale exception to redemption, as described by Bluefields S.S. Co. v. Lala Ferreras Cangelosi S.S. Co. and its predecessors. Accordingly, the court affirmed the judgment of the district court, holding that the law at issue did not apply to judicial sales. View "CHS, Inc. v. Plaquemines Holdings, L.L.C." on Justia Law

Muse, Nelson, and Weiss, and two others formed DGP. The five individuals were DGP’s limited partners; its general partner was MNW LLC, consisting of Muse, Nelson, and Weiss. DGP contracted to buy Gas Solutions and Prospect agreed to lend DGP 95% of the purchase price, subject to due diligence. The agreement prevented DGP from negotiating with other lenders. Prospect’s investigation raised concerns and it informed DGP that it would not make the loan. After DGP threatened to sue, Prospect agreed to pay DGP $3.295 million as reimbursement for DGP’s expenses and DGP agreed to assign Prospect its right to buy Gas Solutions. DGP assigned the purchase contract to DGP’s general partner, MNW, owned by Muse, Nelson and Weiss, who then sold Prospect their individual membership interests, transferring the contract to Prospect. Despite a mutual release, DGP sued Prospect alleging fraud, breach of fiduciary duty, and tortious interference with contract. Prospect counterclaimed alleging breach of the covenant not to sue. The district court granted summary judgment in favor of Prospect and awarded attorneys’ fees in its award. The Fifth Circuit affirmed, rejecting an argument that the covenants did not bind the individuals. Under an interpretation of the agreement giving effect to all its terms, Nelson and Muse breached the agreement by funding DGP’s lawsuits and violated the release and covenant not to sue.View "Dallas Gas Partners, L.P. v. Prospect Energy Corp" on Justia Law

This case stemmed from the Deepwater Horizon drilling platform oil spill. On appeal, BP challenged the district court's decision upholding the Claims Administrator's interpretation of the settlement agreement between it and the class of parties injured in the oil spill and the district court's dismissal of its action for breach of contract against the Administrator and denial of its motion for a preliminary injunction. The court concluded that the balance of equities favored a tailored stay where those who experienced actual injury traceable to loss from the Deepwater Horizon accident continued to receive recovery but those who did not receive their payments until this case was fully heard and decided through the judicial process weighed in favor of BP. Accordingly, the court reversed the denial of the preliminary injunction and instructed the district court to expeditiously craft a narrowly-tailored injunction that allowed the time necessary for deliberate reconsideration of significant issues on remand. The court affirmed the district court's dismissal of BP's suit against the Claim Administrator. View "In Re: Deepwater Horizon" on Justia Law

Plaintiff filed suit against North American after the moving company severely damaged or loss some of plaintiff's items. Because plaintiff's claims arose out of the interstate shipment of her possessions, the Carmack Amendment, 29 U.S.C. 14706 et seq., provided the sole and exclusive remedy. The district court granted summary judgment for North America, determining that her claim for damages did not satisfy regulatory requirements. The court concluded that plaintiff's demand letter unequivocally requested that North American remit payment totaling $182,750.00 and constituted a written communication containing facts sufficient to identify the shipment, asserting liability, and making claims for the payment of a specified amount under 49 C.F.R. 1005.2(b). The plain language of the regulation's minimum filing requirements required nothing more. Accordingly, the court reversed the district court's grant of summary judgment for North America and remanded for further proceedings. View "Williams v. N. Amer. Van Lines of Texas, Inc., et al." on Justia Law