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

In a bankruptcy adversary proceeding, Capco brought claims of fraud and various business torts against Ryder, Tana, TRT, and Tristone. The claims arose out of a transaction in which Capco purchased from Tana certain oil and gas reserves located in the Gulf of Mexico (the Properties). The bankruptcy court granted summary judgment in favor of Ryder, Tana, TRT, and Tristone and dismissed the claims. The court held that Capco failed to present evidence to demonstrate a genuine issue of material fact about whether Ryder was contracted to provide an independent reevaluation of the Properties and advice at the meeting regarding Capco's decision to close on the Properties. The court also held that because the purchase and sale agreement contained a clear intent to disclaim reliance, the lower courts correctly held that Capco was unable to claim fraudulent inducement based on the prior representations of Tana, TRT, and Tristone. Accordingly, the judgment was affirmed.

In 2005, during plaintiff's employment, defendant issued an employee handbook, including a provision that all employment-related disputes, whether initiated by an employee or by defendant, would be "resolved only by an arbitrator through final and binding arbitration," that disputes under the Fair Labor Standards Act were among those subject to the arbitration policy, that disputes cannot be brought as class actions or in representative capacities, and that the Federal Arbitration Act was its governing authority. Plaintiff signed a receipt that reiterated the arbitration policy. After his employment ended, plaintiff filed a class action, alleging violation of the FLSA by failing to adequately compensate him and other similarly-situated employees for overtime work. The district court denied a motion to stay proceedings and compel arbitration, finding that the provision was illusory because the employer retained the right to terminate or modify the provision at any time. The Fifth Circuit affirmed, noting that under the provision the company could make amendments almost instantaneously.

Defendant (principal contractor) sub-contracted with Stevens for work on military personnel housing at the Army base at Fort Polk, Louisiana. Stevens retained plaintiff to perform re-roofing. Plaintiff completed satisfactory work at the instruction of defendant and Stevens, but was not paid in full. Plaintiff originally sued under the Miller Act, 40 U.S.C. 3133, which provides federal question jurisdiction Plaintiff conceded at trial that defendants failed to secure a bond as required under the Miller Act. The federal claim was dismissed. The district court entered judgment in favor of plaintiff on a Louisiana-law breach of contract claims and allowed plaintiff to amend to allege diversity that existed at the time of the original complaint. The court declined to consider defendants' newly submitted evidence concerning diversity. The Fifth Circuit vacated. The district court may not have had proper subject-matter jurisdiction from the instant plaintiff filed; it incorrectly held that it had discretion to exercise supplemental jurisdiction over the state claims, assuming that it had proper subject-matter jurisdiction under the Miller Act. The Miller Act claim was too attenuated to establish proper federal question jurisdiction and could not support supplemental jurisdiction.

This appeal was from the grant of summary judgment in a diversity case in which plaintiff was a limited partner in a partnership that received a loan from defendant. The dispute stemmed from a limited guaranty agreement between the Bank and plaintiffs, who became a guarantor of the loan received by the partnership. At issue was whether the guaranty agreement only required payment from the guarantor once the balance of the outstanding loan was $500,000 or less. The district court ruled that the payment was immediately due regardless of whether the balance of the loan had been reduced to $500,000. Because the court found the language of the guaranty agreement ambiguous, the court held that the district court erred by accepting the Bank's interpretation and granting summary judgment. Therefore, the court vacated the summary judgment and remanded to the district court. Further, the court affirmed the district court's denial of the motion for leave to file a supplemental claim. Finally, the court vacated the order awarding attorney's fees.

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.

Crescent appealed the district court's grant of summary judgment in favor of Volvo where the district court held that the contract between Crescent and Volvo compelled the parties to arbitrate their dispute. The court vacated and remanded to the district court with instructions to dismiss where the district court erred in holding that Volvo's request for a declaratory judgment as to the applicability of 15 U.S.C. 1226 was properly before the court. Because the district court lacked jurisdiction to entertain Volvo's declaratory judgment action, the presence of this action in Volvo's complaint before the district court could not alter the court's holding that there was no subject matter jurisdiction to hear Volvo's petition to compel arbitration.

This insurance coverage case arose out of an underlying personal injury lawsuit brought by Michael Parr against Gilbane Building Company. Gilbane, a general contractor, sought defense and indemnification from Admiral Insurance Company based on an insurance policy held by Empire Steel Erectors, a subcontractor. On cross-motions for summary judgment, the district court determined that Admiral owed a duty to defend and indemnify. As a preliminary matter, the court held that Gilbane qualified as an additional insured. The court held that, pursuant to the strict eight-corners rule, Admiral had no duty to defend where the petition did not affirmatively allege any facts implicating the negligence of either Empire or Parr. Therefore, the district court erred in granting summary judgment in favor of Gilbane on the duty to defend. The court held, however, that the district court did not clearly err in determining that Admiral owed Gilbane a duty to indemnify for the cost of its settlement with Parr and the district court's summary judgment on that matter was affirmed.

Amerisure appealed the district court's summary judgment ruling determining that Louisiana law prohibited the consideration of extrinsic evidence to prove mutual mistake; ranking Amerisure as the primary insurer; and allowing another third-party insurer to bring a cross-claim for defense fees. The court held that because the district court erred in refusing to consider extrinsic evidence to prove the theory of mutual mistake, the court reversed and remanded without considering ranking or standing.

Plaintiff's lawsuit arose from defendant's refusal to pay some or all of plaintiff's claims for reimbursement for medical-device procurement and financing services provided in connection with over 2,000 patients insured under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., plans administered by defendant. Plaintiff subsequently appealed a summary judgment for defendant. At issue was whether plaintiff's state-law claims of promissory estoppel, quantum meruit, unjust enrichment, negligent misrepresentation, and violations of the Texas Insurance Code, 541.051(A) & (B) and 541.061(1) & (2), were preempted by ERISA. The court reversed with respect to plaintiff's promissory estoppel, negligent misrepresentation, and Texas Insurance Code claims because these claims were premised on allegations and evidence that plaintiff provided the services in reliance on defendant's representations that it would pay reasonable charges for plaintiff's services. The court affirmed with respect to plaintiff's quantum meruit and unjust enrichment claims because these claims depended on plaintiff's assertion that without its services the patients' ERISA plans would have obligated defendant to reimburse a different provider for the same services.

This case arose when plaintiff and defendant created a joint venture where plaintiff loaned the joint venture $75,000,000 under a Loan Agreement which contained an arbitration clause. Defendant did not sign the Loan Agreement individually but did sign a third-party guarantee (Limited Guarantee) for the loan on the same day the Loan Agreement was executed. Plaintiff subsequently sued defendant pursuant to the Limited Guarantee and defendant sought arbitration. The district court denied a motion to compel arbitration because defendant was not a party to any Loan Document. Defendant appealed and the district court denied his motion for a stay pending appeal. Defendant appealed the denial of the stay and plaintiff moved for summary affirmance of the denial of the motion to compel. The court held that there was no automatic stay and that under the circumstances of the case, defendant was not entitled to a stay. Therefore, the motion for summary affirmance was carried with the case.