Tendeka, Inc. v. Nine Energy Service LLC
14-18-00018-CV
Tex. App.Dec 17, 2019Background
- Tendeka and Nine Energy entered an October 25, 2013 written agreement: Tendeka would sell "standard Bakken packers" at $3,000 each in exchange for Nine Energy's commitment to purchase at least 3,000 units within one year; parties operated on a consignment model.
- After the October agreement, Tendeka (via salesperson Crooks) sold some packers to Nine Energy at $2,800; that price change was acknowledged by both sides.
- On June 9, 2014 Tendeka (Miller) sent a letter saying Nine Energy had effectively chosen other vendors, requested return of unused packers, announced ending the consignment arrangement, and stated future packers would be invoiced on delivery at $3,000 — Nine Energy treated the letter as an unconditional refusal to perform.
- Nine Energy instructed Tendeka to pick up its packers; Tendeka did so. On July 10, 2014 Tendeka sent a follow-up letter citing the 3,000 minimum and warning prices would revert to $3,700 if the guaranteed volume was not met.
- Tendeka sued for breach and related claims; Nine Energy pleaded repudiation as an affirmative defense. The bench trial court found a valid contract, found Tendeka repudiated the agreement on or about June 9, 2014, awarded Tendeka $36,400 for damaged returned packers, and concluded the repudiation relieved Nine Energy of the purchase obligation for the remainder of the term.
- On appeal Tendeka argued (1) the court erred in finding repudiation, and (2) alternatively, any repudiation was either excused or retracted; the Fourteenth Court of Appeals affirmed.
Issues
| Issue | Plaintiff's Argument (Tendeka) | Defendant's Argument (Nine Energy) | Held |
|---|---|---|---|
| Whether Tendeka repudiated the contract on June 9, 2014 | June letter only ended consignment and sought return of goods; it did not constitute an unconditional refusal to perform | June letter changed price, consignment, and payment terms and reasonably indicated rejection of ongoing obligations — a repudiation | Court: Sufficient evidence supports finding Tendeka repudiated the agreement on June 9, 2014; finding affirmed |
| Whether Tendeka's repudiation was excused because Nine Energy earlier failed the volume commitment | Nine Energy's alleged shortfall amounted to an earlier repudiation that excused Tendeka | Nine Energy continued to purchase (1,923 units) and did not repudiated; Tendeka accepted continued performance (e.g., $2,800 sales) | Court: Evidence does not conclusively show Nine Energy repudiated; excusal not established; trial court correct |
| Whether Tendeka retracted its repudiation (July 10 letter) | July 10 letter operated as a retraction and notice of intent to perform | Nine Energy treated the June letter as final and materially changed position in reliance, so retraction ineffective | Court: No retraction — Nine Energy materially changed position; trial court correct |
Key Cases Cited
- Catalina v. Blasdel, 881 S.W.2d 295 (Tex. 1994) (bench-trial sufficiency-review standard)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (standards for reviewing legal and factual sufficiency of evidence)
- El Paso Prod. Co. v. Valence Operating Co., 112 S.W.3d 616 (Tex. App.—Houston [1st Dist.] 2003) (repudiation requires unconditional and complete refusal to perform)
- Ingersoll–Rand Co. v. Valero Energy Corp., 997 S.W.2d 203 (Tex. 1999) (non‑repudiating party may treat repudiation as breach or await performance)
- Dow Chem. Co. v. Francis, 46 S.W.3d 237 (Tex. 2001) (burden when challenging sufficiency on issue on which appellant bore proof)
- Mar. Overseas Corp. v. Ellis, 971 S.W.2d 402 (Tex. 1998) (factual‑sufficiency review principles)