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

Wartburg appealed the district court's grant of summary judgment for Bumbo, a South African seller of plastic baby seats, on counterclaims by Wartburg alleging breach of contract. The court held that Wartburg's retailer limitation claim, regarding Bumbo's insistence that Wartburg supply Wartburg's inventory of Bumbo products solely to Wal-Mart, Toys "R" Us, and Babies "R" Us, arose from the initial, admitted-to contract. As such, this claim fell under one of the exceptions to Texas's statute of frauds. Therefore, the district court erred in granting summary judgment to Bumbo as to this claim on statute of frauds grounds. The court affirmed in part, reversed in part, and remanded for further proceedings. View "Jonibach Mgmt. Trust v. Wartburg Enterprises, Inc." on Justia Law

Hess sought to enforce debtor's guaranty on a contract between Hess and Premier. Debtor was a member in Premier and served as guarantor of the agreement. The agreement stated that Hess would provide certain management services related to the operation of the Fluker Pit. The bankruptcy court held that Premier breached the contract in bad faith, but the court limited the damages award to $375,000. Hess appealed to the district court, which overruled the bankruptcy court and awarded Hess the full value of the contract - $1.5 million. Debtor appealed. The court concluded that a Louisiana court would find that the bad faith damage clause did not enhance the damages owed Hess beyond the time the Fluker Pit closed. Instead, giving full effect to the bad faith damages provision, the court found that Hess was only able to establish as a "direct consequence" of the breach damages up until the November 12th date. Awarding Hess damages beyond that point would not serve the provision's purpose of conferring damages consequentially linked to bad faith breach, but instead would punitively award damages unconnected with the facts surrounding the breach. Further, Louisiana's rule on mitigation makes clear that a non-breaching party must take "reasonable efforts to mitigate the damage caused by the obligor's failure to perform." This demonstrates that damages are not set in stone, and strengthened the court's conclusion that post-breach events may effect the amount of damages award. Accordingly, the court reversed and remanded. View "Hess Mgmt. Firm, L.L.C., et al. v. Bankston, et al." on Justia Law

Plaintiffs filed suit in Mississippi state court against defendants seeking damages and declarative injunctive relief. Plaintiffs asserted two claims: first, common-law trade-secret misappropriate and intentional interference with business relations; and second, violation of state law, which protects a patient's right to use any pharmacy of his choosing. After removing plaintiffs' suit to federal court, defendants moved to compel plaintiffs to arbitrate their claims under the arbitration contracts to which all or most defendants were not signatories under the Federal Arbitration Act (FAA), 9 U.S.C. 3-4. The court concluded that the relevant Arizona law, made controlling by the Provider Agreement's choice-of-law clause, supported the non-signatory defendants' motion to enforce the agreement to arbitrate against plaintiffs based on state-law equitable estoppel doctrine. Accordingly, the court affirmed the district court's judgment compelling arbitration. The court recognized that the court's prior decisions applying federal common law, rather than state contract law, to decide such questions have been modified to conform with the Supreme Court's holding in Arthur Andersen LLP v. Carlisle. View "Crawford Professional Drugs, et al. v. CVS Caremark Corp., et al." on Justia Law

Vista, plaintiff's employer, appealed the district court's denial of Vista's motion to compel arbitration of plaintiff's on-the-job injury claim. The court held that even if the Benefit Plan and the Arbitration Agreement were properly considered as part of a single contract, the termination provision found in the Benefit Plan did not apply to the Arbitration Agreement. Accordingly, the court concluded that the Arbitration Agreement was not illusory under Texas law because Vista's power to terminate the Arbitration Agreement was properly constrained. The court reversed and remanded for the district court to enter an order compelling arbitration. View "Lizalde v. Vista Quality Markets" on Justia Law

This appeal arose from a contracting dispute between MetroplexCore and Parsons, which contracted with the county to design, build, and operate a transit system. The court agreed that the summary judgment evidence did not present any genuine issue of material fact as to MetroplexCore's joint venture and quantum meruit claims, and MetroplexCore did not challenge the dismissal of its fraudulent misrepresentation claim on appeal. However, because the district court impermissibly resolved certain disputed questions of fact at the summary judgment stage, and because those facts, taken in a light most favorable to MetroplexCore would give rise to a claim to relief for promissory estoppel, the court affirmed in part and reversed in part. View "Metroplexcore, L.L.C. v. Perrin" on Justia Law

This case arose from the collapse of a real estate transaction. The ART entities filed suit alleging that Clapper defrauded them by representing that "there was no title problems," and seeking a declaratory judgment that they "properly terminated" the deal. The Clapper entities countersued, alleging that the ART entities breached the agreement by purporting to terminate the deal. In this appeal, the court held that the ART entities' decision not to cross-appeal the jury's fraud findings in the first district proceeding prevented them from raising the same rejected fraud claims in the second district court proceeding. Because the contribution amounts overlap, and because the parties neither identified language in the agreement nor an explanation from the district court supporting this double counting of damages, the court held that the district court's decision to combine the amounts was in error. Accordingly, the court vacated the award of combined contribution amounts and remanded for further proceedings. The court addressed remaining claims and affirmed the district court's judgment in all other respects. View "American Midwest, Inc., et al. v. Clapper, et al." on Justia Law

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