ACADIAN DIAGNOSTIC LABORATORIES, L.L.C., Plaintiff-Appellee / Cross-Appellant, v. QUALITY TOXICOLOGY, L.L.C., Defendant-Appellant / Cross-Appellee.
No. 19-30320
United States Court of Appeals, Fifth Circuit
July 13, 2020
Appeals from the United States District Court for the Middle District of Louisiana
Before KING, GRAVES, and OLDHAM, Circuit Judges.
Acadian Diagnostic Laboratories, L.L.C. (“Acadian“) entered into two contracts with Quality Toxicology, L.L.C. (“QT“) to perform lab testing. Their business relationship soon unraveled, and Acadian filed this lawsuit. The jury awarded damages to Acadian, and both sides appealed. QT says it didn‘t get to present its full case, so we should remand. And Acadian says it didn‘t get enough money, so we should vacate the judgment and replace it. They‘re both wrong. We affirm.
I.
This case involves two agreements between two labs in two States. Acadian operated its lab in Baton Rouge, Louisiana. QT operated its lab in Longview, Texas. Between 2013 and 2015, the labs made two agreements to create a reciprocal testing arrangement. Under the Acadian Referred Specimens Agreement, Acadian referred urine specimens to QT for testing. QT, in turn, agreed to pay Acadian 50% of all amounts collected for those services, after deducting a charge from Medcross, QT‘s billing contractor. Medcross would do all the billing, collect the funds, and deposit them in QT‘s account. Then QT would remit to Acadian its share of the funds. Under a second agreement, the QT Referred Specimens Agreement, the referral role flipped: QT agreed to refer specimens to Acadian for testing. As with the first agreement, Medcross billed and collected the funds. And, as with the first agreement, Medcross deposited the collected funds into QT‘s account. QT agreed to deduct a charge for Medcross‘s services and then remit 65% to Acadian.
QT and Acadian performed thousands of tests under these Agreements. But QT refused to send Acadian most of its agreed-to share of the collected funds. For example, Acadian performed lab services under the QT Referred Specimens Agreement on 2,679 specimens. QT collected at least $1,565,428 in payments for those specimens. But QT sent Acadian only $73,134.34—far less than the 65% it owed under that Agreement.
QT faced other business difficulties during this time too, which culminated in a “business divorce.” Several of QT‘s partners left and new management came in. But the new management still did not remit the funds owed to Acadian. So Acadian sent a demand letter. When QT didn‘t respond, Acadian filed this lawsuit, alleging, among other things, that QT breached both Agreements.1
The district court granted Acadian partial summary judgment on its breach-of-contract claims. Specifically, the district court found that QT was indisputably liable for breaching both Agreements. But Acadian‘s damages were another matter. The district court could not determine the effective date of the Acadian Referred Specimens Agreement, and thus could not determine when Acadian‘s damages began to accrue. The court left that question for the jury. As for the QT Referred Specimens Agreement, the court appears to have found no dispute about the damages for 2,027 specimens for which QT failed to
The district court also granted Acadian‘s motion in limine regarding a joint venture named ToxNet Diagnostic Laboratory Services, L.L.C. QT wanted to present testimony about ToxNet to the jury. But the district court said that evidence would be a “waste of time.” Later, QT attempted to introduce evidence regarding Acadian‘s partner in the ToxNet venture. The district court again excluded it.
The jury awarded Acadian damages for QT‘s breach of both Agreements. For the Acadian Referred Services Agreement, QT owed $635,032.23. And for the QT Referred Services Agreement, QT owed $269,706.50. Notably, the jury instructions and the verdict form said nothing about whether the QT Referred Services Agreement damages were for all specimens or just the 652 specimens on which the district court denied summary judgment.
Shortly after the jury verdict, Judge Brady, who had presided over the case, passed away. The case remained open on the docket for fifteen more months until then-Chief Judge Jackson entered final judgment for Acadian. The final judgment said nothing about Judge Brady‘s earlier summary judgment opinion or his damages calculation. Instead, the judgment only reflected the jury‘s verdict. Acadian‘s counsel filed for his attorney‘s fees but did not file any post-trial motions about this apparent inconsistency. QT filed a motion for a new trial, but it was denied.
Both parties timely appealed.
II.
We start with QT. First, QT argues the district court incorrectly granted summary judgment on its liability for breaching the Agreements. Second, QT argues the district court erroneously stopped it from introducing evidence about Acadian‘s business dealings. Neither contention merits a new trial.
A.
We review the district court‘s grant of partial summary judgment de novo. Smith v. Reg‘l Transit Auth., 827 F.3d 412, 417 (5th Cir. 2016). As this case implicates our diversity jurisdiction, we apply Louisiana law to review QT‘s liability for breaching both Agreements. Am. Elec. Power Co. Inc. v. Affiliated FM Ins. Co., 556 F.3d 282, 285 & n.2 (5th Cir. 2009).
QT Referred Specimens Agreement. QT argues that the QT Referred Specimens Agreement does not obligate it to remit any money at all. Although QT, through Medcross, in fact collected funds for these services, QT says the Agreement actually required Acadian to collect its own bills. And hence, QT contends, it did not breach the Agreement by failing to remit Acadian‘s money.
The disputed provision required Acadian to use “its customary billing practices.” To interpret this provision under Louisiana law, we must “determin[e] . . . the common intent of the parties.”
The generally prevailing meaning of “customary” appears to be “[a]greeing with, or established by, custom; established by common usage; habitual.” Customary, WEBSTER‘S NEW INTERNATIONAL DICTIONARY OF THE ENGLISH LANGUAGE (2d ed. 1941); Customary, THE AMERICAN HERITAGE COLLEGE DICTIONARY (4th ed. 2002) (“Commonly practiced, used, or encountered, usual“); accord Fullilove v. U.S. Cas. Co. of N.Y., 125 So. 2d 389, 394 (La. 1960) (defining “usual” as synonymous with “customary“). So, Acadian agreed to use its “habitual” or “usual” billing practices. QT appears to argue that Acadian agreed to use the billing practices that it habitually or usually used with its customers in general. By contrast, Acadian asserts that it agreed to use the billing practices that it habitually or usually used with QT—that is, to use QT and Medcross for all billing and collections. We are thus faced with two seemingly permissible interpretations.
When the meaning of a contract provision is “doubtful,” Louisiana law says that such provisions “must be interpreted in light of the nature of the contract, equity, usages, the conduct of the parties before and after the formation of the contract, and of other contracts of a like nature between the same parties.”
Here, the record is entirely one-sided: It shows that QT, through Medcross, conducted all the billing and collections for these specimens. That‘s the agreement Acadian and QT orally made before reducing the QT Referred Services Agreement to writing. That‘s what QT did under the parties’ other agreement, the Acadian Referred Services Agreement. And that‘s what QT did under this Agreement before failing to remit Acadian‘s share of those funds. This conduct “before and after the formation of the contract,”
QT points to no evidence to dispute any of this. And “a party cannot defeat summary judgment with conclusory allegations, unsubstantiated assertions, or ‘only a scintilla of evidence.‘” Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 343 (5th Cir. 2007) (quoting Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994)). Summary judgment for QT‘s breach of this Agreement was thus proper.
Acadian Referred Specimens Agreement. QT argues it‘s not liable under the Acadian Referred Specimens Agreement because Acadian breached the Agreement first. QT says Acadian did not comply with three provisions requiring Acadian (1) to provide certain forms to QT,
Conditions precedent in a contract—more properly called “suspensive conditions” under the Louisiana Civil Code—are “terms that suspend . . . a party‘s obligation until the occurrence of a condition.” Mumblow v. Monroe Broad., Inc., 401 F.3d 616, 621 (5th Cir. 2005) (citing S. States Masonry, Inc. v. J.A. Jones Constr. Co., 507 So. 2d 198, 204 n.15 (La. 1987)); see also City of New Orleans v. Tex. & Pac. Ry. Co., 171 U.S. 312, 334 (1898) (“The suspensive condition, under the Louisiana Code, is the equivalent of the condition precedent at common law.“). When suspensive conditions are in a contract, a party has no duty to perform its own obligations until those conditions are met. See
QT has not shown that the Acadian Referred Specimens Agreement contained suspensive conditions. For example, QT has not made any argument that “the express contract language compels such construction.” Hampton v. Hampton, Inc., 713 So. 2d 1185, 1190 (La. Ct. App. 1998). Nor has QT provided any evidence about the “reason and sense of the contemplated transaction,” so as to explain why Acadian had to comply with these provisions before receiving payment. City of New Orleans, 171 U.S. at 334. It is not enough for QT to argue that it “was under the impression” that Acadian would fulfill these obligations, Frantz v. Vitenas, 347 So. 2d 284, 285 (La. Ct. App. 1977), or that it would have been “convenient, useful, [and] beneficial” if Acadian had fulfilled them, City of New Orleans, 171 U.S. at 334.
And it‘s unclear why it matters whether the Agreement contained suspensive conditions. Even if it did, QT has the burden of showing that Acadian did not meet the conditions. Sam‘s Style Shop v. Cosmos Broad. Corp., 694 F.2d 998, 1004 (5th Cir. 1982). In this way, the “nonfulfillment” of a suspensive condition is in the “nature of an affirmative defense.” Ibid. And as with any other affirmative defense, QT “bear[s] the burden of proving each element of [the] affirmative defense by a preponderance of the evidence.” Petro Harvester Operating Co., L.L.C. v. Keith, 954 F.3d 686, 697 (5th Cir. 2020); see
B.
QT next argues that the district court erred by prohibiting the introduction of evidence about Acadian‘s third-party business relationships at the damages trial. We review evidentiary decisions by the
QT sought to present evidence about a company called ToxNet, which was a joint venture between Acadian and the old, now-“divorced” members of QT. QT wanted to tell the jury a tale of old QT members who planned to go around the new QT management‘s backs to form this joint venture. QT also wanted to present testimony about a business named Zenith. And it wanted the jury to hear about “a plan [of] subterfuge,” through which Acadian, Zenith, and ToxNet allegedly conspired to hold QT liable for nonpayment. This is an interesting story.
But QT fails to show how it was relevant to the damages trial. A fundamental precept of federal evidence law is that evidence must be “relevant” to be admissible.
III.
Acadian cross-appeals. It argues that the jury‘s $269,706.50 award for the QT Referred Specimens Agreement is too low and “not supported under any view of the evidence at trial.” Therefore, Acadian seeks “amendment of the final judgment to reflect the appropriate [i.e., higher] award” of $1,344,824.71, based on the evidence at trial. In the alternative, Acadian seeks to change the judgment to $1,017,528.20 so that it reflects Judge Brady‘s apparent conclusion in his summary judgment opinion.
A.
As a preliminary matter, we cannot simply amend the jury‘s damages award and increase the damages QT must pay. That‘s true even if we think the evidence would support a higher figure. It has long been established that the Seventh Amendment‘s Re-Examination Clause—that “no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law“—generally prevents increasing jury awards after a verdict.
Our conclusion is reinforced by the fact that the Federal Rules of Civil Procedure provide several ways for a federal litigant to seek a different damages figure than that which the jury awards. And Acadian chose exactly none of them.
First, before the jury decides anything, a litigant can seek judgment as a matter of law under Rule 50(a).
Had Acadian filed a Rule 50(a) motion, Acadian could have renewed that motion once it heard the jury‘s damages award under Rule 50(b).
Even without filing any motion under Rule 50, Acadian still could have filed a Rule 59 motion for a new trial on damages.
By failing to file any of these motions in the district court, Acadian forfeited its ability to seek appellate review of the jury verdict. Ibid.
B.
Acadian nonetheless argues that something must be done about the apparent inconsistency between the summary judgment order and the final judgment issued by the district court. After all, the district court‘s final judgment says nothing about Judge Brady‘s summary judgment opinion, which “f[ound] that QT owes Acadian the balance due on the QT Referred Specimens [Agreement] of $1,017,528.20, less the $73,134.34” that QT already paid.
Here, too, the Federal Rules of Civil Procedure provided avenues for Acadian to clear up this apparent inconsistency. One option was Rule 58. That rule allows a “party [to] request that judgment be set out in a separate document.”
Rule 58 plays a vital role because “[t]he judicial power vested by Article III is the power ‘to render dispositive judgments.‘” United States v. Lavergne, 785 F. App‘x 213, 216 (5th Cir. 2019) (Oldham, J., concurring in part and dissenting in part) (quoting Plaut v. Spendthrift Farm, Inc., 514 U.S. 211, 219 (1995)). And, as an appellate court, we “review[] judgments, not opinions.” Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842 (1984). So Acadian could‘ve used Rule 58(d) to request the entry of a final judgment that reflected both the jury verdict and the summary judgment opinion. Acadian did not do so.2
Once the allegedly incorrect final judgment was entered, the Federal Rules gave Acadian another chance to fix it. Within 28 days, Acadian could have sought “to alter or amend [the] judgment” under Rule 59(e). “Th[at] Rule gives a district court the chance ‘to rectify its own mistakes in the period immediately following’ its decision.” Banister v. Davis, 140 S. Ct. 1698, 1703 (2020) (quoting White v. New Hampshire Dep‘t of Emp. Sec., 455 U.S. 445, 450 (1982)). Rule 59(e) even acts to suspend the ordinary time requirements to file a notice of appeal. This suspension “enable[s] a district court to . . . perfect its judgment before a possible appeal” is taken. Id. at 1708. And should a litigant succeed in correcting a judgment, an appeal may become “altogether unnecessary,” ibid., preventing needless “burdens being placed on the courts of appeals,” United States v. Ibarra, 502 U.S. 1, 5 (1991) (per curiam). But Acadian did not file a Rule 59(e) motion.
Even after the window closed for a Rule 59(e) motion, Acadian could have considered whether to file a Rule 60(b) motion for relief from the allegedly erroneous judgment.
In fact, our circuit has an established procedure (nearly seven decades old) to allow parties to file Rule 60(b) motions during the pendency of appeals. See ibid. Ordinarily:
a perfected appeal deprives the district court of all jurisdiction except for the following: “[T]he district court retains jurisdiction to consider and deny such [post-judgment] motions, . . . [and] if it indicates that it will grant the motion, the appellant should then make a motion in the Court of Appeals for a remand of the case in order that the district court may grant such motion.”
Winchester v. U.S. Att‘y for S. Dist. of Tex., 68 F.3d 947, 949 (5th Cir. 1995) (quoting Ferrell v. Trailmobile, Inc., 223 F.2d 697, 699 (5th Cir. 1955)). We express no view on whether such a Rule 60(b) motion would have been successful. We only note it was available to Acadian—and Acadian has so far ignored it.
C.
The Federal Rules of Civil Procedure provide ample mechanisms for litigants to ensure a district court gets its post-jury-trial judgment right. These are not “idle motion[s].” Johnson v. New York, N.H. & H.R. Co., 344 U.S. 48, 53 (1952). Instead, these motions reflect the “institutional advantages of trial . . . courts” and “the unchallenged superiority of the district court‘s factfinding ability.” Salve Regina Coll. v. Russell, 499 U.S. 225, 233 (1991). And they provide the district court, with the “perspective peculiarly available to [it] alone,” “a last chance to correct [its] own errors without delay, expense, or other hardships of an appeal.” Cone, 330 U.S. at 217. True, some of these motions may “seldom change judicial outcomes.” Banister, 140 S. Ct. at 1708. But by taking advantage of them, litigants “promote[] an economic and effective appellate process, as the reviewing court gets the benefit of the district court‘s plenary findings.” Ibid. (quotation omitted).
It‘s not clear to us the import of Judge Brady‘s summary judgment decision. The Federal Rules specify that it should merge into the final judgment. See
But Acadian never raised this issue with the district court in any way. See Keelan v. Majesco Software, Inc., 407 F.3d 332, 340 (5th Cir. 2005) (“An argument must be raised to such a degree that the district court has an opportunity to rule on it.” (quotation omitted)). Thus, we do not simply lack the district court‘s “plenary findings“; we have no “findings” on the issue at all. And we don‘t have them because Acadian never sought them. Since the issue of the inconsistent judgment was never
* * *
The judgment of the district court is AFFIRMED.
