Midcontinent Express Pipeline, LLC v. Man Industries (INDIA), Ltd, Prime Pipe International, Inc., and the Bank of Tokyo-Mitsubishi UFJ, Ltd, 407 S.W.3d 342

Midcontinent sued Man and Prime Pipe along with Bank of Tokyo-Mitsubishi for issues arising from a standby letter of credit securing payments under a Purchase Order for steel pipe.
Man and Prime Pipe were to supply pipe to Midcontinent under a Texas-governed UCC framework; time was of the essence and production schedules were established.
A Letter Agreement in April 2008 modified the Purchase Order, creating a $15 million standby L/C and altering quantities, with Midcontinent contributing funds and Man agreeing to the modification.
Midcontinent drew on the standby L/C to cover production shortfalls; Man failed to timely deliver the reduced quantities, triggering cover damages and other remedies.
The trial court awarded damages to Midcontinent and Prime Pipe, including cover damages, bank fees, and attorneys’ fees; Man and Midcontinent cross-appealed and the case was consolidated for appeal; the court partially affirmed, modified, and remanded for further calculations.
The court addressed choice-of-law issues, determining Texas law governs UDJA fees and certain UCC-related damages despite New York governing substantive issues under the letter of credit

Issue	Plaintiff's Argument	Defendant's Argument	Held
Effect of modification on good faith	Midcontinent argues modification was made in good faith under UCC 2-209; Man contends bad faith invalidates it	Man asserts modification occurred under coercive or fraudulent circumstances per Roth Steel standards	Modification enforced; evidence supports good faith under Texas law
Awards for Bank/fees and litigation costs	Midcontinent entitled to Bank indemnity fees and litigation expenses under UDJA and UCC	Man argues New York law governs fees and costs; seeks reversal	Fees awarded under UDJA; expenses sustained under Texas law; not reversible on NY law grounds
Prime Pipe’s commissions for non-shipped pipe	Prime Pipe seeks commissions on full original order despite reductions	Agency Agreement and Letter Agreement reduce commissions for non-delivered quantities	Commission reduced by $511,073.11; remaining award adjusted to $998,475.10
Midcontinent’s cover damages and timing of payment	Midcontinent properly covered and incurred reasonable damages for non-delivery	Man argues non-delivery was cured or waived; disputes the cover timing	Cover damages affirmed; rejected arguments invalidating coverage; best practice is good-faith, reasonable cover

Roth Steel Prods. v. Sharon Steel Corp., 705 F.2d 134 (6th Cir. 1983) (good-faith modification requires objective and subjective honesty; modification not justified by loss alone)
City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (standards for reviewing legal sufficiency and court’s factual findings; deference to trial court)