Affordable Power, L.P. v. Buckeye Ventures, Inc.
347 S.W.3d 825
Tex. App.2011Background
- Buckeye Ventures contracted with TXU Energy in December 2005 for three-year electricity supply for multiple Texas locations.
- Excess/Under Usage provision allowed TXU to charge for shortfall liquidations if Buckeye’s monthly usage fell below Exhibit A-1 thresholds.
- In March 2006, Lepovitz approached Buckeye about Affordable Power; Buckeye signs new agreements based on his representations.
- Buckeye later was billed by TXU for allegedly terminating the TXU contract; Buckeye stopped paying and TXU sued.
- Buckeye sued Affordable in October 2008 asserting negligent misrepresentation and sought indemnity/contribution; trial court ruled TXU awarded damages and Buckeye could recover against Affordable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Negligent misrepresentation evidence | Affordable supplied false information | Buckeye lacks justifiable reliance | Evidence legally and factually sufficient |
| Justifiable reliance | Buckeye relied on Affordable's misrepresentation of a nonbinding Texas contract | Buckeye should have read contract terms | Justifiable reliance proven; misrepresentation caused damages |
| Causation of damages | Damages proximately caused by Affordable's misrepresentation | Damages stem from Buckeye’s own actions/omissions | Damage causation established; Liquidation fee incurred |
| Affirmative liability based on Lepovitz | Lepovitz acted as Affordable's agent with apparent authority | Lepovitz was an independent contractor outside Affordable's scope | Lepovitz acted with apparent authority; Affordable liable |
| Indemnity/common law and attorney's fees | Buckeye entitled to common law indemnity and fees | No indemnity; Buckeye not prevailing on declaratory relief | Common-law indemnity not available; no attorney's fees awarded |
Key Cases Cited
- Curtis v. Comm'n for Lawyer Discipline, 20 S.W.3d 227 (Tex. App.-Houston [14th Dist.] 2000) (implied findings supported when no findings of fact filed)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (no-evidence and factual-sufficiency standards in review)
- Formosa Plastics Corp. USA v. Presidio Eng'rs & Contractors, Inc., 960 S.W.2d 41 (Tex. 1998) (evidence-based sufficiency; scintilla concept)
- Cain v. Bain, 709 S.W.2d 175 (Tex. 1986) (standards for factual sufficiency review)
- Grant Thornton LLP v. Prospect High Income Fund, 314 S.W.3d 913 (Tex. 2010) (red flags to consider reliability of representations)