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

This arbitration case stemmed from disputes over Appellee Organizational Strategies, Inc.'s (OSI) captive insurance program, created with Appellants Capstone Insurance Management, Ltd., Capstone Associated Services, and Capstone Associated Services (Wyoming), LP's (collectively, "Capstone") assistance. Appellant PoolRe, managed by Capstone, provided insurance services to OSI's newly created captive insurance companies. Capstone and OSI entered into contracts requiring AAA arbitration, whereas PoolRe and the captive insurance companies entered into contracts requiring ICC arbitration. An arbitrator joined all of the parties for arbitration under AAA rules. Because the arbitrator acted contrary to the express provisions of the PoolRe arbitration agreements, the district court held that arbitrator exceeded his authority and, pursuant to 9 U.S.C. 10, vacated the award. Finding no reversible error, the Fifth Circuit affirmed. View "PoolRe Insurance Corp. v. Organizational Strategies, Inc." on Justia Law

Law firms Campbell Harrison & Dagley, L.L.P. (CHD), and Calloway, Norris, Burdette & Weber, P.L.L.C. (CNBW) (collectively, the firms), challenged the district court’s partial vacatur of most of an arbitration award, rendered pursuant to a fee agreement (combining a high hourly-rate fee and a low-percentage contingency fee), which governed the firms’ representation of Albert G. Hill, III, and his wife, Erin Hill. After arbitrating a dispute over the requested payment to the firms under the fee agreement, the arbitrators awarded them approximately $28 million. Although the district court, inter alia, enforced the hourly-rate fee award, it vacated the contingency-fee award as unconscionable. In rejecting the arbitrators’ determinations regarding the uncertainty of recovery, the reasonableness of the total fee, and unconscionability, the Fifth Circuit concluded the district court “substitute[d] [its] judgment for that of the arbitrators merely because [it] would have reached a different decision”. As a result, it erred in vacating the contingency-fee-portion of the award and related awards (for the arbitration, the firms’ attorney’s fees, other fees, expenses, and arbitrators’ compensation; and pre-judgment interest on the contingency-fee portion). The Fifth Circuit vacated the district court with respect to the unconscionability issue, and remanded the case for further proceedings. The district court was affirmed in all other respects. View "Campbell Harrison & Dagley, et al v. Hill" on Justia Law

Noatex Corp. and Kohn Law Group, Inc. appealed two district court decisions in an interpleader action brought by Auto Parts Manufacturing Mississippi, Inc. (“APMM”) that named Noatex, King Construction of Houston, L.L.C., and Kohn as claimants. Appellants claimed that the district court erred in discharging APMM from the action, enjoining all parties from filing any proceedings relating to the interpleader fund without a court order, and in denying their motion to compel arbitration. After careful consideration of the trial court record, the Fifth circuit found no reversible error and affirmed the discharge of APMM and its accompanying injunction, the denial of appellants' motion to compel arbitration and to stay proceedings pending arbitration. King Construction was dismissed from these appeals, and appellants' alternative motion to vacate the trial court's rulings was denied. View "Auto Parts Mfg MS, Inc. v. King Const of Houston,LLC" on Justia Law

At issue in this appeal was a contract dispute involving a Right-of-Way Easement Option (Agreement) between plaintiff-appellee Angus Chemical Company and defendant-appellant Glendora Plantation, Inc. This appeal stems from the district court’s grant of Angus’s motion for partial summary judgment, denial of Glendora’s motion for partial summary judgment, and denial of Glendora’s motion to compel discovery. Specifically, the issues presented were: (1) whether Angus had authority under the Agreement to abandon the original 12” pipeline in place when it constructed a new 16” pipeline; (2) whether Angus had authority under the Agreement to install fiber optic cables; and (3) whether it was improper for the district court to deny Glendora’s motion to compel discovery. Upon review, the Fifth Circuit concluded: (1) the there was still a material fact issue as to whether the Agreement required removal of the 12" pipeline; (2) the Agreement was sufficiently clear allowing Angus to install fiber optic cables; and (3) because the Fifth Circuit was remanding for consideration of other facts and issues, the Fifth Circuit remanded for the trial court to consider the motion to compel. View "Angus Chemical Company v. Glendora Plantation, Inc" on Justia Law

Medical provider North Cypress Medical Center Operating Co., Ltd. and North Cypress Medical Center Operating Co. GP, LLC (collectively, “North Cypress” or “the hospital”) sued Cigna Healthcare, Connecticut General Life Insurance Company, and Cigna Healthcare of Texas, Inc. (collectively, “Cigna”) for breach of healthcare plans administered or insured by Cigna. North Cypress argued that Cigna failed to comply with plan terms and underpaid for covered services. Cigna counter-claimed, arguing that it paid more than was owed; that North Cypress as an out-of-network provider did not charge the patients for coinsurance, but billed Cigna as if it had. The district court dismissed North Cypress’s ERISA claims for want of standing and Cigna’s ERISA claims as time barred. Finally, the district court granted summary judgment against North Cypress’s breach of contract claims, concluding there was no breach. North Cypress appealed and Cigna cross-appealed. The Eleventh Circuit, after review, affirmed in part, reversed in part, and remanded for further proceedings. In holding that North Cypress had standing to bring ERISA claims, the Court removed the grounds for the district court’s preemption ruling. The parties did not brief the issue of whether the "Discount Agreement" claims would survive un-preempted. Accordingly, the Court vacated the grant of summary judgment and remanded so that the district court could consider the question of preemption in light of our ruling on standing. The Court affirmed the remainder of the district court’s judgment. View "North Cypress Medical Center, et al v. Cigna Health" on Justia Law

Appellee Palm Energy Offshore, L.L.C. owned the mineral rights in an area of the Gulf of Mexico called the West Delta 55 block (“WD55”). Palm also served as the court-appointed manager for appellee H.C. Resources, L.L.C. (“HCR”) and its mineral holdings at another Gulf location, the Chandeleur 37 block (“C37”). Acting as HCR’s manager, Palm asked CM to service one of HCR’s wells at C37. CM agreed and chartered a lift boat, the L/B Nicole Eymard from appellee Offshore Marine Contractors, Inc. to perform maintenance work. The ship worked at C37 from July 18 until July 27. On July 27, Palm, now acting on its own behalf, asked CM to send the Nicole Eymard to WD55. CM dispatched the ship to WD55. After completing the job at WD55, the crew of the Nicole Eymard attempted to retract the ship’s legs from the ocean floor. The crew discovered that one of the legs was stuck. The crew worked to free the leg until August 18, when Offshore ordered the crew to sever the leg and return to port ahead of an approaching storm. In port, Offshore completed repairs on the ship on October 10. Offshore then sued CM and Palm for charter fees that accrued from July 15 to August 18, for “downtime charter” from August 19 to October 10, and for the cost of repairs. CM and Palm then filed various counter- and cross-claims against each other and Offshore. CM and Offshore’s claims against each other are governed in part by the terms of an oral charter agreement. CM and Palm’s claims against each other are governed in part by the terms of a Master Service Agreement (“MSA”), and in part by a specific work order. The MSA contained an indemnity agreement (“Indemnity Agreement”). After a bench trial, the district court held that CM owed Offshore for charter fees that accrued from July 15 to July 27 while the Nicole Eymard was at C37, and for charter fees that accrued from July 28 to August 18 while the ship was at WD55. The court held that CM could recover the same fees from Palm. The court held that neither CM nor Palm owed Offshore for downtime charter fees from August 19 to October 10, or for repairs. CM, Offshore, and Palm filed motions to alter or amend the judgment under Fed. R. Civ. P. 59. The court granted these motions to the extent they sought clarification regarding the court’s order on prejudgment interest. The court determined that the Indemnity Agreement barred CM from seeking repayment for those fees. The court denied the parties’ motions in all other respects. CM appealed from the district court’s judgment and its post-trial order. Finding no reversible error in the district court’s judgment and post-trial order, the Fifth Circuit affirmed. View "Offshore Marine Contractors, et al v. Palm Energy" on Justia Law

Central Southwest Texas Development, LLC and Washington Mutual Bank (WaMu) entered into a lease agreement in November 2007: Central was to construct a WaMu bank branch in Austin, and deliver it to WaMu by January 1, 2008, after which WaMu would owe rent to Central for the twenty-year term of the lease. Central did not yet have fee simple ownership of the property, but had contracted to purchase it and had deposited earnest money in escrow. After a number of extensions of the deadline, Central had not yet closed on the property at the time of WaMu’s collapse in September 2008. WaMu was declared insolvent and the FDIC was appointed as its receiver. JPMorgan Chase Bank acquired most of WaMu’s assets and liabilities under a Purchase and Assumption (P&A) Agreement with the FDIC. If Chase declined, the FDIC would have been authorized to repudiate “burdensome” leases if doing so would “promote the orderly administration of [WaMu’s] affairs.” Having determined that Chase was unlikely to accept the lease based on the proximity of Chase branches to the leased property, a Central executive emailed the FDIC and asked to be “release[d] . . . from the Lease obligation in order to pursue other options.” Central was soon notified by Chase of its rejection of the lease and by the FDIC of its repudiation. Central subsequently closed on the property. Having failed to find a replacement tenant, Central sold the property the same day a little more than it paid. Central later concluded that the lease did not qualify as "Bank Premises" under the P&A Agreement because no banking facilities were occupied (or even built) by the time of WaMu’s failure. With this new understanding of the lease’s status, Central filed this lawsuit against Chase for breach. After Central moved for summary judgment, the district court held that the lease was not a Bank Premises lease, and therefore that Chase could not decline assignment under the P&A Agreement. Consistent with the Fifth Circuit's ruling in "Excel Willowbrook, LLC v. JPMorgan Chase Bank, NA (758 F.3d 592 (2014)), the district court also held that this assignment created privity of estate between Central and Chase, and therefore that Central had standing to assert its interpretation of the P&A Agreement. Chase also moved for summary judgment on the ground that the email communications between the parties constituted a mutual termination of the lease. ROA 2048. The case proceeded to a bench trial, and the district court ruled that Chase’s attempted rejection of the lease was an anticipatory breach, entitling Central to contract damages and excusing it from further performance. Chase and the FDIC appealed. After review, the Fifth Circuit found "no reason to disturb the trial court's finding" that no mutual termination occurred. Accordingly, the Court affirmed the district court. View "Central SW Texas Devel, L.L.C. v. JP Morgan Chase" on Justia Law

MRI, on behalf of itself and as successor-in-interest to P&L, filed suit against Alliance for, inter alia, tortious interference with business relations and tortious interference with contract. The district court dismissed Superior's tortious interference claims. The district court concluded that Superior failed to establish that it acquired contractual rights from P&L and that Superior lacked prudential standing to enforce P&L's rights. The court agreed, concluding that Superior submitted no evidence that the contracting hospitals at issue consented to any assignment. Even if P&L did attempt to assign its rights to Superior, the district court did not clearly err in finding that the purported assignment took place before Superior existed as a corporation. Accordingly, Superior failed to prove the existence of prudential standing by a preponderance of the evidence and, therefore, the court affirmed the judgment of the district court. View "Superior MRI Serv. v. Alliance Health Serv." on Justia Law

Pearl Seas filed suit against LRNA under various tort theories regarding LRNA's allegedly inadequate performance in certifying a ship and its alleged misdeeds during arbitration. The district court denied LRNA's motion to dismiss on the ground of forum non conveniens (FNC) without written or oral explanation. LRNA petitions for a writ of mandamus to order the district court to vacate its denial and dismiss for FNC. The court granted the petition because the district court clearly abused its discretion and reached a patently erroneous result where it failed to enforce a valid forum-selection clause, and because LRNA has no effective way to vindicate its rights without a writ of mandamus. View "In Re: Lloyd's Register N.A., Inc." on Justia Law

The Avakians purchased a house with a loan secured by a properly executed deed of trust. The property was their homestead, where they lived together. Citibank refinanced the loan. Unlike the original loan, the refinancing note only listed Norair as the debtor. Citibank required that the Avakians execute another deed of trust. Norair signed the Citibank deed of trust. The next day, Burnette signed an identical deed of trust. The deeds of trust did not mention each other, and did not refer to signature of counterpart documents. Citibank recorded them as separate instruments. The Avakians received a loan modification. Around the time of Norair’s death, Burnette received notice that Citibank was taking steps to foreclose. After Norair’s death, Burnette sought a declaratory judgment. The district court granted summary judgment to Burnette, finding that, because the two were living together when they signed the Citibank deeds of trust, the instruments were invalid. The Fifth Circuit reversed. Under Mississippi law, a deed of trust on a homestead is void if it is not signed by both spouses, but the Mississippi Supreme Court would likely hold that a valid deed of trust is created when husband and wife contemporaneously sign separate, identical instruments. View "Avakian v. Citibank, N.A." on Justia Law