Netknowledge Technologies LLC v. Rapid Transmit Technologies , 269 F. App'x 443 ( 2008 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
March 11, 2008
No. 07-10343 Charles R. Fulbruge III
Clerk
NETKNOWLEDGE TECHNOLOGIES LLC doing business as
NK SOFT.COM CORP
Plaintiff
v.
RAPID TRANSMIT TECHNOLOGIES, also known as WaKuL Inc
Third Party Plaintiff - Appellee
v.
ERICSSON INC
Third Party Defendant - Appellant
Appeal from the United States District Court
for the Northern District of Texas
3:02-CV-2406
Before WIENER, BARKSDALE, and DENNIS, Circuit Judges.
PER CURIAM:*
This matter reaches us on appeal following the district court’s review of
the Arbitrator’s award of damages, attorneys’ fees, and costs in favor of Rapid
*
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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.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. 07-10343
Transit Technologies a/k/a WaKuL, Inc. (“WaKuL”) and against Ericsson, Inc.
The district court granted WaKuL’s motion to confirm the Arbitrator’s award
and concurrently denied Ericsson’s motion to vacate the award. After
considering the parties’ written and oral arguments, we AFFIRM for the reasons
assigned by the district court:
1. The Arbitrator did not exceed his authority by awarding damages
to WaKuL in excess of the Master Purchase Agreement (“MPA”)’s
limitation of liability provision because he determined that the
limitation of liability provision was void due to fraudulent
inducement.
2. To succeed on its argument that the Arbitrator manifestly
disregarded Texas law when it determined that the MPA’s merger
clause did not preclude WaKuL’s fraudulent inducement claim,
Ericsson had to show “the existence of a clearly governing principle”
that is “well defined, explicit, and clearly applicable.” See Brabham
v. A.G. Edwards & Sons Inc., 376 F.3d 377, 381-82 (5th Cir. 2004).
It failed to do so. This court has not read Schlumberger Tech. Corp.
v. Swanson, 959 S.W.2d 171 (Tex. 1997), and its progeny as
standing for the principle that, under Texas law, the presence of a
merger clause categorically bars a fraudulent inducement claim
under the contract, as Ericsson contends. See Dunbar Med. Sys.,
Inc. v. Gammex Inc., 216 F.3d 441, 449 & n.11 (5th Cir. 2000); see
also Gen. Retail Servs., Inc. v. Wireless Toyz Franchise, L.L.C., No.
06-20395, 2007 WL 2909565, at *13 (5th Cir. Oct. 5, 2007)
(unpublished). Rather, Schlumberger and its progeny make clear
that the proper inquiry into whether the presence of a merger clause
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No. 07-10343
bars a fraudulent inducement claim is a fact-specific one, precisely
of the kind engaged in by the Arbitrator here. Accordingly, the
Arbitrator did not manifestly disregard Texas law on merger
clauses.
3. The Arbitrator did not exceed his authority by awarding WaKuL
attorneys’ fees pursuant to the MPA’s arbitration provision. The
arbitration provision plainly provided the Arbitrator with the
authority to award attorneys’ fees to the prevailing party. See MPA,
at ¶ 17 (“Arbitration . . . shall include an award of attorneys’ fees
(and the amount of such fees) to the prevailing party.”). Moreover,
both parties requested attorneys’ fees while this matter was before
the Arbitrator, thereby permitting the Arbitrator to award
attorneys’ fees under the Rules of the American Arbitration
Association. See Commercial Arbitration Rule R-43(d)(ii).
AFFIRMED.
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