HDS Retail North America, L.P. v. PMG International, Ltd.
4:10-cv-03399
S.D. Tex.Sep 27, 2012Background
- HDS Retail North America, L.P. sues PMGI International, Ltd. in SDTX over earnouts under a Stock Purchase Agreement.
- Magistrate Judge recommended partial grant/denial of HDS's motion for partial summary judgment (Dkt. 68).
- San Antonio earnout: recommended denial of HDS's summary judgment; interpretation hinged on SPA §2.4.1(a).
- Austin earnout: recommended grant of HDS's motion; condition to payment not satisfied and PMGI's defense fails as a matter of law.
- Court later adopted the recommendation in part and altered analysis on the Austin earnout to reflect prevention and timing issues.
- Motions to exclude expert testimony on the Austin earnout were denied as moot after resolution.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| San Antonio earnout outcome | HDS argues San Antonio earnout requires win of RFP and inclusion of venues 112/114. | PMGI contends proper interpretation supports denial of HDS's motion. | San Antonio earnout denial affirmed; interpretation adopted against HDS. |
| Austin earnout condition timing | HDS argues conditions were satisfied or excused; PMGI lacked defense. | PMGI argues prevention doctrine or other issues bar payment. | First condition not satisfied by Dec 11, 2009; Austin earnout not payable. |
| Prevention doctrine applicability | Prevention not a meaningful defense under the contract framework. | Prevention is a viable affirmative defense under Texas law. | Prevention doctrine recognized for analysis, but does not create a genuine dispute on the first condition here. |
Key Cases Cited
- Clear Lake City Water Auth. v. Friendswood Dev. Co., Ltd., 344 S.W.3d 514 (Tex. App.—Houston [14th Dist.] 2011) (precondition; failure to complete a condition may excuse performance)
- Mendoza v. COMSAT Corp., 201 F.3d 626 (5th Cir. 2000) (preexisting duty; good faith and fair dealing context)
- Miracle Revival Ctr. Move of God Church v. Kindred, 615 S.W.2d 257 (Tex. Civ. App.—Dallas 1981) (time-based conditions and enforceability concerns)
- Beard Family P’ship v. Commercial Indem. Ins. Co., 116 S.W.3d 839 (Tex. App.—Austin 2003) (strict compliance; time-limited conditions)