MIDAMERICA C2L, INCORPORATED, a Nevada corporation, SECURE ENERGY INC., a Nevada corporation v. SIEMENS ENERGY INCORPORATED, a Delaware corporation
No. 24-10678
United States Court of Appeals For the Eleventh Circuit
July 1, 2025
Non-Argument Calendar
MIDAMERICA C2L, INCORPORATED, a Nevada corporation, Plaintiff Counter Defendant Appellant,
SECURE ENERGY INC., a Nevada corporation, Plaintiff-Appellant,
versus
SIEMENS ENERGY INCORPORATED, a Delaware corporation, Defendant Counter Claimant Appellee.
D.C. Docket No. 6:17-cv-00171-PGB-LHP
Before LAGOA, BRASHER, and ABUDU, Circuit Judges.
PER CURIAM:
This case returns on appeal for a third time. For nearly a decade, Secure Energy, Inc. (“Secure“) contracted with Siemens Energy, Inc. (“Siemens“) to procure gasification equipment and technical support for its coal plant in Illinois. Marred by falling natural gas prices and malfunctioning equipment, Secure‘s plant never became operational. In 2016, Secure—along with its subsidiary, MidAmerica C2L Inc.1—sued Siemens, bringing various fraud- and contract-based claims arising from the failed business venture. Following discovery, the district court granted Siemens summary judgment on each of Secure‘s claims, including four claims
When this case was last on appeal, we reversed the district court‘s entry of summary judgment for Siemens on those four counts, finding the court‘s sole basis for doing so—that Secure was required to, but did not, introduce expert testimony showing a design defect—to be erroneous. MidAmerica C2L Inc. v. Siemens Energy, Inc. (MidAmerica II), 2023 WL 2733512, at *10 (11th Cir. Mar. 31, 2023). Accordingly, we remanded for the district court to consider Siemens‘s alternative arguments for summary judgment in the first instance.
On remand, the district court once again entered summary judgment for Siemens. This appeal follows.
I. BACKGROUND
A. Factual Background
Secure was formed in 20062 to develop and construct a facility in Decatur, Illinois, to convert coal into synthetic natural gas using a process called coal gasification.3 To that end, Secure began
Impressed with these representations, Secure used Siemens for its equipment and technology needs. On July 24, 2007, Secure and Siemens entered into a “Memorandum of Understanding” memorializing the parties’ intention for Secure to buy from Siemens two 500-megawatt gasifiers, associated equipment, engineering services, and a process license.
On December 21, 2007, Secure and Siemens entered into a formal contract (the “2007 Contract“) in which Secure would purchase Siemens‘s products and services for €27,715,000 plus $1,717,000—in total, about $40 million. The 2007 Contract, and every subsequent contract at issue, included a merger clause, which stated that neither “party will be bound by any prior obligations,
Secure and Siemens also entered into a licensing agreement (the “2007 LSA“) in which Secure licensed Siemens‘s technology for about €11.7 million. Secure was to pay the €11.7 million licensing fee pursuant to an agreed upon fee schedule within the 2007 LSA.
The burners—a core component of Siemens‘s gasifiers—were delivered to Secure in Decatur, Illinois, in March 2009. Secure alleges that the pins in the cooling screen of the burners were too short and out of specification, although Siemens disputes this characterization. But Secure only learned of this alleged defect during the litigation—it never opened or put into operation the Siemens gasifiers after it took possession of them.
The price of natural gas plummeted in 2009; as a result, Secure abandoned its original plan of converting coal to natural gas and began planning to build a coal-to-gasoline gasification plant instead. But because the plot of land Secure had acquired in Decatur could not accommodate this change, Secure decided to move its plant to West Paducah, Kentucky.
Secure‘s new plans in Kentucky required no changes to the Siemens gasification equipment, so the parties continued their business relationship. On March 31, 2010, Secure and Siemens entered into a Completion Agreement (the “2010 Completion Agreement“), which terminated the parties’ previous agreements in the 2007 Contract and 2007 LSA, as well as a new License Agreement (the “2010 LSA“). The 2010 Completion Agreement also stipulated
At around the same time Siemens was working with Secure, Siemens sold five 500-megawatt burners to a client which installed the burners at its coal-to-polypropylene plant in China (“NCPP“). These burners were first used in October 2010. Immediately, there were problems. The burners that Siemens had used were having trouble converting the Chinese coal into synthetic gas. The pilot burner was also “unreliable” and had to be removed twenty-five times on two of the gasifiers at NCPP in the first two months. The cooling screens also had issues, with the flame from the burner hitting them at an awkward angle.
Siemens explains away these problems by explaining that the Chinese client used below-grade coal in the gasifiers at NCPP and loaded the incorrect fuel source into the burners. And Siemens
Internal Siemens documents from this period identified the problems. In October 2012, Rüsseler sent an internal Siemens email in which he explained that the “message” to Secure should be to “scrap the equipment, we‘ll start over again.” On November 13, 2012, Siemens circulated an internal memo discussing the needed improvements to the burners, which estimated that the improvements would take 8,520 engineering hours. At this point, Secure had changed its business plan again, this time planning a coal-to-methanol plant at its Kentucky location.
On July 18, 2012, Secure and Siemens entered into a new Completion Agreement (“2012 Contract“) and License Agreement (“2012 LSA“) (collectively, “2012 Contracts“). The 2012 LSA included a merger clause that terminated all prior agreements. Pursuant to the 2012 LSA, Secure was required to pay Siemens a €12.48 million licensing fee. The 2012 LSA recognized that Secure had paid €300,000 in 2010, meaning that Secure still owed Siemens €12.18 million under the 2012 LSA. Secure was required to pay the remaining €12.18 million as follows: (1) €10.932 million upon
Not much later, Secure sought to obtain a construction and financing contract for its plant from a company called SK Engineering & Construction. Siemens agreed to meet with SK and Secure to help Secure acquire that agreement. During the meeting, Siemens communicated with SK that Siemens would be implementing the improvements it learned at NCPP so long as Secure agreed to pay for them. Siemens estimated that it would take around 8,500 engineering hours to complete. In December 2012, however, Siemens suggested internally that incorporating these changes would “tie up resources at a time when [Siemens] need[ed] them more urgently elsewhere” and that, when offering these changes to Secure, Siemens should make “the price and schedule for this change order... so unattractive that [Secure] cannot draw th[e] option.”
Secure did not make the license fee payment that came due on February 28, 2013. At the time, the Siemens gasifiers Secure purchased had not been opened. And by now, Secure‘s business was crumbling, with internal documents indicating “substantial doubt about [Secure‘s] ability to continue as a going concern.” Indeed, as of December 2012, Secure admitted that “[i]n order to continue the coal gasification project, [it must] obtain grants, debt financing or additional equity investment.”
In May 2014, Secure emailed Siemens asking when Secure could expect an updated BEDP and asking about the viability of its equipment. Internally, Siemens stated that “very little to nothing can be re-used [sic] and we would have to start from scratch.”
By March 2015, Secure stopped making payroll payments to its employees. In July 2015, Secure advised Siemens that there might be “new life for [its] project,” as SK had introduced Secure to a group in Houston that were interested in partnering with it on the Kentucky plant. But Secure was never able to obtain the necessary financing for a coal-to-fertilizer plant at the Kentucky site
At the same time, the market constraints that were squeezing Secure had the same effect on Siemens. By mid-2015, Siemens decided to exit the gasification market. On a February 2, 2016, call between Secure and Siemens, Siemens told them of its decision. Secure interpreted the call as an anticipatory repudiation of the contract—i.e., Secure believed that Siemens was communicating it would not honor the contract.
On February 11, 2016, Secure demanded rescission of the 2007 Contract and the return of all monies paid by Secure to Siemens pursuant to that contract. On February 17, 2016, Siemens informed Secure that Siemens would not violate any contractual obligation even though Siemens was closing its coal gasification business.
In March 2016, Siemens proposed extending the license fee payment deadline and the deadline for completing “performance tests.” Secure rejected the offer, so Siemens revoked it and demanded payment of the approximately €11.5 million termination fee owed pursuant to the 2012 LSA.
B. Procedural History
On July 18, 2016, Secure sued Siemens in Illinois state court. After Siemens removed the case to federal court, the case was
After the close of discovery, both parties moved for summary judgment. The district court entered summary judgment for Siemens on Secure‘s claims for breach of implied warranty, fraudulent misrepresentation, rescission for fraud, and rescission for lack of consideration. According to the district court, because these claims “rely on the premise that the equipment Siemens provided is defective,” Secure was required to introduce expert testimony establishing a design defect. Since Secure did not do so,4 the district court concluded that Secure‘s “failure to offer expert evidence foreclose[d] any claim based on a design defect,” meriting summary judgment for Siemens on Counts II, IV, V, and VI. After
The case proceeded to trial only on Siemens‘s counterclaim for breach of contract, premised on the 2012 LSA. At the end of trial, Secure made a motion for judgment as a matter of law—arguing that the evidence demonstrated that Siemens repudiated the 2012 LSA and that Secure did not breach the agreement. The district court denied the motion. On March 4, 2020, the district court returned its verdict for Siemens, awarding Siemens $13,200,395.50 in damages. Secure renewed its motion for judgment as a matter of law and, in the alternative, moved for a new trial. The district court denied both motions.
Secure timely appealed the district court‘s entry of summary judgment for Siemens, in addition to several pre-trial and trial orders.5 As relevant here, we found that the district court erred in requiring Secure to present expert testimony in support of its claims premised on a design defect. MidAmerica C2L Inc. v. Siemens Energy Inc. (MidAmerica I), 25 F.4th 1312, 1330–31 (11th Cir. 2022), vacated and superseded on reh‘g, MidAmerica II, 2023 WL 2733512. Although the district court considered no other grounds supporting summary judgment on these claims, we nonetheless affirmed
Following MidAmerica I, this Court released its en banc decision in United States v. Campbell, 26 F.4th 860 (11th Cir. 2022) (en banc), which clarified the circumstances under which a court may sua sponte consider issues the parties fail to brief.6 Secure then filed a petition for rehearing, arguing that none of the forfeiture exceptions recognized in Campbell justified our sua sponte application of alternative grounds for affirming summary judgment against Secure on Counts II, IV, V, and VI.
We granted Secure‘s petition as it related to the forfeiture issue, vacated our ruling in MidAmerica I, and substituted a new opinion in its place.7 MidAmerica II, 2023 WL 2733512, at *1. In our revised opinion, we agreed with Secure that none of the Campbell
On remand, Siemens filed a renewed motion for summary judgment, raising its alternative arguments for summary judgment as to Counts II, IV, V, and VI. The district court granted that motion and, once again, entered summary judgment in favor of Siemens on those claims. Secure timely appealed that order.
II. STANDARD OF REVIEW
We review an order granting summary judgment de novo, applying the same legal standards as the district court. Amy v. Carnival Corp., 961 F.3d 1303, 1308 (11th Cir. 2020). In doing so, we view the evidence in the light most favorable to the non-movant and draw all reasonable inferences in his favor. Haves v. City of Miami, 52 F.3d 918, 921 (11th Cir. 1995). “Summary judgment is appropriate if ‘the evidence before the court shows that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.‘” McCullough v. Antolini, 559 F.3d 1201, 1204 (11th Cir. 2009) (quoting Haves, 52 F.3d at 921);
On appeal, Secure contends that the district court erred in granting Siemens summary judgment on Secure‘s claims for breach of implied warranty, fraudulent misrepresentation, rescission for fraud, and rescission for lack of consideration. We consider each claim in turn.
A. Count II: Breach of Implied Warranty
Secure first challenges the district court‘s entry of summary judgment for Siemens on Secure‘s claim for breach of the implied warranty of fitness for a particular purpose. The parties agree that this claim is governed by New York law pursuant to the choice-of-law provisions of the relevant contracts.
To establish a breach of the implied warranty of fitness for a particular purpose under New York law, a plaintiff must show that (1) the seller, at the time of contracting, had “reason to know the particular purpose for which the goods are required“; (2) the seller had reason to know that the buyer was “relying on the seller‘s skill or judgment to select or furnish suitable goods” for the specified purpose; and (3) the plaintiff actually relied on the seller‘s skill or judgment in buying the goods. Emerald Painting, Inc. v. PPG Indus., Inc., 472 N.Y.S.2d 485, 487 (N.Y. App. Div. 1984) (quoting
Here, the parties’ contracts included language waiving the implied warranty of fitness for a particular purpose. The 2012 LSA provides that:
THE WARRANTIES AND GUARANTEES PROVIDED ARE IN LIEU OF ALL OTHER WARRANTIES AND GUARANTEES, WHETHER STATUTORY, EXPRESSED OR IMPLIED, INCLUDING ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR PURPOSE, AND ALL WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE OF TRADE.
The 2007 Contract and 2010 LSA also included this disclaimer.
According to Secure, those disclaimers are unconscionable, and therefore, unenforceable. The district court rejected this argument, both because Secure failed to plead unconscionability in its first amended complaint and, in the alternative, because Secure did not substantiate this theory with record evidence at summary judgment. The district court did not commit reversible error in doing so.
We need not determine whether New York law required Secure to affirmatively plead unconscionability in the operative complaint, since no reasonable juror—viewing the record evidence in the light most favorable to Secure—could conclude that the waiver clause was unconscionable. A determination of unconscionability generally requires a showing that the contract was both
Secure offers three reasons for why a reasonable jury could find that the contracting process surrounding the 2012 LSA was procedurally unconscionable. None is persuasive.
To begin, Secure asserts that it “was forced to sign the 2012 contracts to use its equipment.” But none of Secure‘s cited evidence supports that conclusion. First, Secure generally references an affidavit by Keith Clauss, an engineer whose firm, SK Engineering, “worked with Secure... to provide... a guaranteed maximum price contract for the engineering, procurement, and construction [] of Secure‘s process plant.” As the district court correctly observed, “Clauss was not a party to the contract,” and his affidavit provides no insight into how Siemens purportedly forced Secure to sign the agreement. Second, Secure references a single
Unable to show direct coercion, Secure pivots to arguing that it “did not have the option of choosing a new gasification provider” before signing the 2012 LSA because the Siemens equipment was “already paid for and delivered.” But no evidence suggests that Secure was left without an opportunity to negotiate the terms of the waiver provision included in the 2012 LSA or that it was less than “fully informed” of the contractual terms upon entering the agreement. Emigrant Mortg. Co. v. Fitzpatrick, 945 N.Y.S.2d 697, 700 (N.Y. App. Div. 2012). In fact, the undisputed evidence shows that Secure successfully negotiated extensions of payment and performance deadlines both before and after the 2012 LSA took effect.8
Moreover, we can hardly say that the substance of the waiver provision is unconscionable, as New York‘s Uniform Commercial Code expressly contemplates that a seller may “exclude all implied warranties of fitness” in the written contract.
Since Secure cannot show that the waiver provision is unconscionable, we must apply that clause “according to the plain meaning of its terms,” including its exclusion of any implied warranties. Potter v. Grange, 19 N.Y.S.3d 384, 385–86 (N.Y. App. Div. 2015) (quotation omitted). And because Secure “cannot claim nor be given the benefit of a warranty which it expressly waived,” its implied-warranty claim fails as a matter of law. Broderick Haulage, Inc. v. Mack-Int‘l Motor Truck Corp., 153 N.Y.S.2d 127, 128 (N.Y. App. Div. 1956). Thus, we conclude that the district court did not err in granting Siemens summary judgment on Count II.
B. Counts IV & V: Fraudulent Misrepresentation & Rescission for Fraud
Next, Secure challenges the district court‘s entry of summary judgment for Siemens on Secure‘s claims for fraudulent misrepresentation and rescission based on fraud. Both fraud claims are based on Secure‘s allegation that it entered the 2012 LSA in detrimental reliance on Siemens‘s “misrepresentation[s] by omission”
Florida‘s independent tort doctrine provides that “a plaintiff may not recover in tort for a contract dispute unless the tort is independent of any breach of contract.” Un2jc Air 1, LLC v. Whittington, 324 So. 3d 1, 3 (Fla. 4th DCA 2021) (citation omitted).9 A “well established” exception to this rule is that the independent tort doctrine “does not bar tort actions based on fraudulent inducement.” Allen v. Stephan Co., 784 So. 2d 456, 457 (Fla. 4th DCA 2000) (first citing Moransais v. Heathman, 744 So. 2d 973 (Fla. 1999); then citing PK Ventures, Inc. v. Raymond James & Assocs., Inc., 690 So. 2d 1296 (Fla. 1997)). That is, “[i]f the fraud occurs in connection with misrepresentations, statements or omissions which cause the complaining party to enter into a transaction, then such fraud is fraud in the inducement and survives as an independent tort.” Id. “However, where the fraud complained of relates to the performance of the contract, the economic loss doctrine will limit the parties to their contractual remedies.” Id. (citing Greenfield v. Manor Care, Inc., 705 So. 2d 926 (Fla. 4th DCA 1997), rev. denied, 717 So. 2d 534 (Fla. 1998)).
Here, Secure‘s fraud claims cannot be based on any fraudulent misrepresentation or omission that pre-dated the parties’
During that period, Siemens‘s duty to share information with, and deliver conforming products to, Secure arose from the 2007 Contract and 2010 LSA. For example, both agreements required that, “[i]n the event of any defect in any workmanship or materials discovered during the warranty period... Siemens shall, at its option either reperform, repair or replace the defective Work.” To the extent Siemens withheld information about known defects or provided faulty equipment, then, the proscriptions against doing so were “derived from the contract.” J Square Enters. v. Regner, 734 So. 2d 565, 567 (Fla. 5th DCA 1999) (quoting HTP, Ltd. v. Lineas Aereas Costarricenses, S.A., 685 So. 2d 1238, 1239 (Fla. 1996)). Because such “[m]isrepresentations relating to the breaching party‘s performance of a contract do not give rise to an independent cause of action in tort,” Hotels of Key Largo, Inc. v. RHI Hotel, Inc., 694 So. 2d 74, 78 (Fla. 3d DCA 1997), Secure cannot repackage its contract claims under a theory of fraud. Thus, the district court
C. Count VI: Recission for Lack of Consideration
Finally, Secure maintains that the district court erred in applying Florida law, instead of New York law, in evaluating its claim for rescission based on a lack of consideration. Although the parties hotly dispute which state‘s law governs this claim, we need not resolve that issue here, since the district court found that this claim was time-barred under both Florida and New York law. Secure did not challenge that basis for summary judgment in its opening brief and thus abandoned its opportunity to do so. LaCourse v. PAE Worldwide Inc., 980 F.3d 1350, 1360 (11th Cir. 2020); see also United States v. Levy, 379 F.3d 1241, 1244 (11th Cir. 2004) (“[T]his Court... repeatedly has refused to consider issues raised for the first time in an appellant‘s reply brief.” (collecting cases)). Under such circumstances, “it follows that the judgment is due to be affirmed.” Sapuppo v. Allstate Floridian Ins. Co., 739 F.3d 678, 679 (11th Cir. 2014). Therefore, we will not disturb the district court‘s entry of summary judgment for Siemens on Count VI.
IV. CONCLUSION
For the reasons stated, we affirm the district court‘s order entering summary judgment for Siemens on Counts II, IV, V, and VI.
AFFIRMED.