T-M Vacuum Products v. TAISC, Inc. , 336 F. App'x 441 ( 2009 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
July 1, 2009
No. 08-20585 Charles R. Fulbruge III
Clerk
T-M VACUUM PRODUCTS
Plaintiff - Appellee
v.
TAISC, INC
Defendant - Appellant
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:07-CV-04108
Before JONES, Chief Judge, and HIGGINBOTHAM and HAYNES, Circuit
Judges.
PER CURIAM:*
TAISC, a financing company, appeals the trial court’s summary judgment
in favor of T-M Vacuum Products, Inc., a furnace manufacturer. We AFFIRM.
This case arises from a three-party transaction to finance the sale and
lease of two commercial furnaces. T-M agreed to deliver two furnaces to Ulba
Metallurgical Plant Joint Stock Company (not a party to this case) by a date
certain. TAISC functioned as the financing arm by way of a lease transaction.
*
Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
No. 08-20585
T-M failed to deliver the furnaces on time. However, Ulba continued to pay
TAISC and ultimately entered into an agreement with T-M, to which TAISC was
not a party, to extend the time for the furnace delivery. That new date was met.
When TAISC refused to pay the remaining amounts due for the furnaces to T-M,
T-M filed this lawsuit. The district court granted summary judgment to T-M for
the remaining balance on the purchase price of the furnaces and refused TAISC’s
claim for return of the payments it had already made (termed “conditional
payments” in the contract) and interest on those payments. TAISC then filed
this appeal.
We review grants of summary judgments de novo. Minter v. Great Am.
Ins. Co. of N.Y., 423 F.3d 460, 464 (5th Cir. 2005). Summary judgment is
appropriate if, after making all inferences in favor of the non-movant, the record
contains no genuine issue of material fact, and the movant is entitled to a
judgment as a matter of law. F ED. R. C IV. P. 56(b); Minter, 423 F.3d at 464-65.
TAISC’s arguments on appeal can be summed up as follows: (1) T-M
defaulted by its late delivery of the furnaces and, therefore, forfeited its right to
payment of the purchase price balance; and (2) TAISC is entitled to interest on
the conditional payments it made to T-M for the time period between the original
delivery date and the actual delivery date. Both parties agree that Texas law
applies to our analysis.
It is unnecessary to decide whether T-M’s original late delivery constitutes
an event of default under the parties’ contract, because we conclude that
TAISC’s continued acceptance of performance under the financing contract
prevented TAISC from using the default as an excuse for its own
nonperformance. See Gupta v. E. Idaho Tumor Inst., Inc., 140 S.W.3d 747, 756
(Tex. App. -- Houston [14th Dist.] 2004, pet. denied).1 As the district court
1
While this arrangement was nominally structured as a sale and lease of goods, the
district court analyzed it as a financing transaction, and that is indeed the essence of the
2
No. 08-20585
correctly explained, T-M’s delay did not excuse TAISC’s performance because
TAISC continued to pay T-M and accept lease payments from Ulba. Texas law
is clear that, “[i]f the non-breaching party elects to treat the contract as
continuing and insists the party in default continue performance, the previous
breach constitutes no excuse for nonperformance on the part of the party not in
default and the contract continues in force for the benefit of both parties.” Id.
Despite its demand letter, TAISC’s actions did not treat T-M as being in
default after the original failure to timely deliver. T-M’s delay in delivery
provided TAISC or Ulba with the opportunity to cancel the contracts by their
own terms. Both declined to do so, instead treating T-M’s obligations to deliver
the furnaces as continuing. TAISC continued to make payments to T-M for
nearly four months after notifying T-M of its “defaults,” T-M manufactured and
delivered the furnaces, Ulba accepted them, and Ulba made the lease payments
to TAISC. After electing to continue contract performance, TAISC cannot now
rely on T-M’s initial delay as an excuse for the failure to make full payment. For
the same reason, we also agree with the district court’s decision regarding
interest on the conditional payments. TAISC also has failed to establish that it
was damaged by any delay.
Accordingly, the district court’s judgment is AFFIRMED.
agreement between TAISC, T-M, and Ulba. Thus, like the parties and the district court, we
analyze it as such.
3