98 F.4th 161
5th Cir.2024Background
- In 2011, PilePro LLC (now Sheet Pile LLC) and Plymouth Tube Co. entered into an exclusivity agreement: Plymouth would only manufacture certain steel products for PilePro until December 2021.
- In 2014-2015, disputes arose: Plymouth threatened to exit the agreement due to PilePro's alleged non-payment and failure to indemnify Plymouth in litigation, and eventually claimed to terminate the agreement in 2015.
- Plymouth sued PilePro in Illinois in 2015 for non-payment; PilePro counterclaimed for breach of exclusivity but later abandoned those claims.
- In 2016, Plymouth began selling exclusivity products to a third party (Skyline Steel) following a settlement with Skyline.
- After PilePro’s 2019 bankruptcy, Sheet Pile acquired its contractual claims and sued Plymouth in Texas in 2020 for breach of contract and fraud related to the exclusivity agreement.
- The district court granted summary judgment for Plymouth, holding Sheet Pile's claims were barred by the statute of limitations (and, in the alternative, for other reasons).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract timely? | Discovery rule should defer accrual since PilePro didn’t learn of breach until 2017 or 2018 | Claim accrued in 2016 when third-party sales began; discovery rule does not apply | No discovery rule; claim accrued in 2016 and is time-barred |
| Serial breaches create new claims? | Each sale to third parties is a new breach, so claims within 4 years are timely | Any breach in 2016 started the limitations clock; later sales do not restart it | Serial breach argument forfeited and would fail on merits |
| Fraud claim sufficient evidence? | Plymouth’s 2014-15 statements were fraudulent concealment of planned third-party sales | No evidence Plymouth made false statements or acted with fraudulent intent | No actionable fraud: no false statements or concealment in 2014-15 |
| Contract claim defeated by res judicata? | (Not fully briefed) | Prior Illinois suit bars relitigation | Court did not reach this question, as limitations was dispositive |
Key Cases Cited
- Stine v. Stewart, 80 S.W.3d 586 (Tex. 2002) (Texas’s four-year statute of limitations for breach of contract actions)
- Archer v. Tregellas, 566 S.W.3d 281 (Tex. 2018) (Breach of contract accrual occurs at breach)
- KPMG Peat Marwick v. Harrison Cty. Hous. Fin. Corp., 988 S.W.2d 746 (Tex. 1999) (Limitations defense requires proof of accrual and negation of discovery rule)
- Wagner & Brown, Ltd. v. Horwood, 58 S.W.3d 732 (Tex. 2001) (Discovery rule available only in exceptional cases, categorically)
- JP Morgan Chase Bank, N.A. v. Orca Assets G.P., L.L.C., 546 S.W.3d 648 (Tex. 2018) (Elements and reliance requirements for fraud under Texas law)