Articles Posted in US Court of Appeals for the Fifth Circuit

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IAS filed suit against defendant and his company, alleging claims of fraud, fraudulent inducement, fraud by nondisclosure, and breach of contract. Defendant filed a counter suit for breach of his employment contract with IAS. The Fifth Circuit reversed the dismissal of IAS's fraudulent inducement claim where the district court's assessment that there was no fraud did not appear to have been based on any assessment of the evidence presented at trial. The court affirmed the judgment in favor of defendants on IAS's breach of contract claim where the district court's finding that IAS did not suffer any damages as a result of any breach of the asset purchase agreement was plausible in light of the record as a whole. Finally, the court vacated the severance pay award in favor of defendant because, even assuming that defendant was terminated for reasons other than cause, he failed to satisfy the second condition precedent to his receipt of severance pay: execution of the required release and waiver. The panel remanded for further proceedings. View "IAS Service Group, LLC v. Jim Buckley & Assoc." on Justia Law

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This appeal stemmed from the parties' dispute over Lone Star's proposed adjustments to a Revenue Calculation that provided payment to Sunbelt. The arbitrator agreed with Lone Star's upward judgment to the revenue attributable to its former customers, but reformed the contract after concluding that the parties had made a mutual mistake when their agreement listed the revenue target for the former Lone Star clients. The court affirmed and remanded for reconsideration of the mutual mistake claim. The court held that, because the parties did not agree in either the asset purchase agreement or the engagement letter to have the arbitrator decide reformation, the court must decide the issue. View "Hebbronville Lone Star Rentals, LLC v. Sunbelt Rentals Industrial Services, LLC" on Justia Law

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A general construction contractor, S&P, filed suit against its secondary insurance provider, US Fire, after US Fire refused to cover damages S&P incurred when a courthouse construction project went awry. The Fifth Circuit affirmed the district court's grant of summary judgment to US Fire, holding that US Fire's policy allowed it to count the arbitration agreements as "Other Insurance." The court explained that an indemnity agreement fell under the plain language of the "Other Insurance" provision of US Fire's policy because it was a mechanism by which an insured arranged for funding of legal liabilities for which US Fire's policy also provided coverage. Under the reasoning of RSR Corp. v. International Insurance Co., 612 F.3d 851 (5th Cir. 2010), settlement proceeds resulting from an indemnity agreement also counted as "Other Insurance." The court also held that S&P failed to meet its burden to show allocation of the settlement proceeds between covered and noncovered damages. View "Satterfield and Pontikes Construction v. US Fire Insurance Co." on Justia Law

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A Himalaya Clause that protects downstream carriers from suit by a cargo owner does not, in and of itself, limit the cargo owner's ability to receive the recovery to which it is entitled. After Royal SMIT's transformers were damaged during shipment from the Netherlands to Louisiana, Royal SMIT and its insurers filed suit against the carriers with whom the intermediary had contracted. The Fifth Circuit affirmed the district court's grant of summary judgment for the carriers, holding that the through bill of lading’s Himalaya Clause protected downstream carriers from being sued by Royal. The court rejected Royal's claims that there was a material issue of fact as to whether the parties agreed to be bound by the Himalaya Clause and held that Royal failed to articulate a basis for overriding the clear terms of the through bill of lading. View "Royal SMIT Transformers BV v. Onego Shipping & Chartering, BV" on Justia Law

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The Fifth Circuit affirmed the district court's grant of summary judgment for an insurer, in an action seeking a declaratory judgment that the insurer owed no coverage under a commercial property insurance policy. The insured then counterclaimed for declaratory judgment, breach of the insurance contract, and violations of the Texas Insurance Code. The court held that the insured failed to meet its burden to offer evidence that would allow a trier of fact to segregate covered losses from non-covered losses. Therefore, because the insured failed to meet its burden to show what portion, if any, of the claimed damage occurred during the coverage period, the insurer was entitled to summary judgment on its claim seeking declaratory judgment. The insured's counterclaims failed for the same reason. View "Certain Underwriters at Lloyd's of London v. Lowen Valley View, LLC" on Justia Law

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The Fifth Circuit affirmed the district court's dismissal of Delek's challenge to an arbitrator's award in an action alleging that the company violated a collective bargaining agreement (CBA), which required that employees get first crack at new work unless certain exceptions apply. The court held that the arbitrator's exercise of his discretion did not conflict with the CBA, and that the district court did not abuse its discretion in finding that Delek's challenge was without justification and subject to a fee award. View "Delek Refining, Limited v. Local 202" on Justia Law

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The Fifth Circuit affirmed the district court's judgment in an action arising from a property insurance policy that Lexington issued to LWL to insure construction equipment that LWL leased from Sierra. The court held that the equitable lien doctrine did not apply to Sierra, who was not a party to the insurance policy, and Sierra did not have standing to sue Lexington. In this case, the agreement between Sierra and LWL did not require that LWL obtain insurance with a loss payable clause to Sierra, and the Lexington policy did not contain such a clause. View "Sierra Equipment, Inc. v. Lexington Insurance Co." on Justia Law

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This appeal stems from a long-running dispute between the parties over a contract regarding Akaushi cattle. The court held that sufficient evidence existed for the jury to find that HeartBrand suffered a cognizable injury from Bear Ranch's misrepresentation; the district court did not abuse its discretion when it exercised its "wide latitude in determining the admissibility" of a valuation expert's testimony; the district court did not abuse its discretion when it chose not to modify the injunction in April 2016 as there was no showing of a significant change in circumstances; and the district court did not abuse its discretion in awarding $3.2 million to HeartBrand in attorney's fees. However, the court reversed the district court's award of $1,825,000 in exemplary damages to HeartBrand. Finally, the court held that the district court did not abuse its discretion when it set the Constructive Trust Threshold at $3,796 per head. View "Bear Ranch, LLC v. Heartbrand Beef, Inc." on Justia Law

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GE appealed the district court's partial grant of summary judgment and award of attorneys' fees in favor of its former employee and AmSpec in an action brought by GE against the employee and AmSpec, alleging that the employee concealed her intention to work for a competitor. The court held that the district court correctly held that there was no evidence that the non-solicitation agreement was breached. Therefore, the court affirmed the district court's grant of summary judgment as to that claim. The court also affirmed the district court's grant of summary judgment on the misappropriation of trade secrets claim, as well as the claims for illegal use of confidential information and breach of a common-law duty with respect to confidential information, which tracked the misappropriation claim. Furthermore, summary judgment was proper on the tortious-interference-with-prospective-business-relationships claim. However, the court held that the employer was not entitled to recover attorneys' fees where there was no evidence that when GE executed the non-solicitation agreement with her, GE knew the covenant was unreasonable, and she had not met the requirements of Texas Business and Commerce Code 15.51(c). Accordingly, the court vacated the award of attorneys' fees. View "GE Betz, Inc. v. Moffitt-Johnston" on Justia Law

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The Williams Parties brought suit against Fannie Mae and Wells Fargo, asserting claims against defendants for breach of contract premised on a violation of the notice terms in a Deed of Trust, violations of the Texas Property Code, and wrongful foreclosure. On appeal, the Williams Parties appealed the dismissal of their breach of contract claims against Fannie Mae and the grant of summary judgment in favor of Wells Fargo. The court held that the district court did not err in holding that Wells Fargo was not liable for breach of the Deed of Trust where the competent summary judgment evidence reflected that Wells Fargo was never a party to or an assignee of the Deed of Trust. Therefore, Wells Fargo had no liability and summary judgment for Wells Fargo was appropriate. The district court did not abuse its discretion by granting a motion for reconsideration and, on the merits, Fannie Mae's agreement in the deed of trust to give notice of foreclosure was independent of the Williams Parties' agreement under the note to pay monthly installments to satisfy the debt. Therefore, the court affirmed as to Wells Fargo, reversed as to the claim that Fannie Mae breached the deed of trust by failing to give notice, and remanded the claim against Fannie Mae for further proceedings. View "Williams v. Wells Fargo Bank, N.A." on Justia Law