Joy Pipe, USA, L.P. v. Fremak Industries, Inc.
703 F. App'x 253
| 5th Cir. | 2017Background
- Joy Pipe purchased P-110 steel stock manufactured by ISMT (India), brokered by Fremak, shipped to Texas Couplings for fabrication into couplings sold into oilfield supply chains.
- Some couplings, later placed deep in two producing wells (Vermilion and NuVista), failed; third-party testing (Acuren) found the ISMT steel was a lower grade than represented.
- Joy Pipe incurred mitigation costs: paid $520,058 to Texas Couplings and suffered $1,779,514.38 withheld by Welded Tube; brought suit under Texas law asserting breach of implied warranties (merchantability and fitness) among other claims.
- District court dismissed some claims pretrial; jury found ISMT liable on both implied warranty theories and awarded $2,299,572.38 in damages.
- District court entered judgment but denied prejudgment interest, post-judgment interest, and taxable costs without explanation; Joy Pipe appealed and ISMT cross-appealed on various jury instruction and damages issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Prejudgment interest | Entitled to equitable prejudgment interest as a matter of course | No wrongful detention; plaintiff never out-of-pocket for some items, so exceptional circumstances justify denial | Remanded: district court abused discretion by denying interest without explaining exceptional circumstances; must explain or award interest |
| Post-judgment interest | Statutory post-judgment interest required on money judgments | Opposed? (ISMT did not oppose federal rate) | Reversed/Remanded: district court must award post-judgment interest under 28 U.S.C. §1961(a) |
| Taxable costs under Fed. R. Civ. P. 54(d) | Costs should be awarded to prevailing party | No strong opposing position presented below | Remanded: court must award costs or provide reasons for denial per Rule 54(d) presumption |
| One-satisfaction / double recovery | Recovery for mitigation costs paid to different parties is proper on alternate theories | Single injury; must elect remedy to avoid double recovery | Affirmed: awards corresponded to distinct payments (Texas Couplings and Welded Tube); no double recovery |
| Jury instructions (division by well, causation, new & independent cause) | Trial court instructions adequately tied breach to proximate causation and damages | Instructions should have separated liability/damages by well, required explicit causation for each well, and included new-and-independent-cause instruction | Affirmed: court did not abuse discretion—special interrogatories not mandatory; proximate-cause instruction adequate; new-and-independent-cause instruction not applicable in UCC warranty context |
Key Cases Cited
- Reyes-Mata v. IBP, Inc., 299 F.3d 504 (5th Cir. 2002) (standard of review for prejudgment interest discretion)
- Concorde Limousines, Inc. v. Moloney Coachbuilders, Inc., 835 F.2d 541 (5th Cir. 1987) (equitable prejudgment interest available as a matter of course absent explained exceptional circumstances)
- Meaux Surface Prot., Inc. v. Fogleman, 607 F.3d 161 (5th Cir. 2010) (post-judgment interest under §1961 is mandatory)
- Am. Rice, Inc. v. Producers Rice Mill, Inc., 518 F.3d 321 (5th Cir. 2008) (one-satisfaction rule and election of remedies under Texas law)
- JCW Elecs., Inc. v. Garza, 257 S.W.3d 701 (Tex. 2008) (consequential damages and proximate-cause principles in warranty context)