Nunn, Yoest, Prin v. Union Pacific Corp ( 2003 )

United States Court of Appeals
Fifth Circuit
F I L E D
May 23, 2003
In the
Charles R. Fulbruge III
Clerk
United States Court of Appeals
for the Fifth Circuit
_______________
m 02-20818
Summary Calendar
_______________
NUNN, YOEST, PRINCIPALS & ASSOCIATES, INC.,
DOING BUSINESS AS CROSSROAD CARRIERS,
Plaintiff-Appellant,
VERSUS
UNION PACIFIC CORPORATION AND UNION PACIFIC RAILROAD COMPANY
Defendants-Appellees.
_________________________
Appeal from the United States District Court
for the Southern District of Texas
m H-98-CV-3396
_________________________
Before JOLLY, HIGGINBOTHAM, and SMITH, Nunn, Yoest, Principals & Associates, Inc.
Circuit Judges. (“Nunn, Yoest”), appeals a summary judgment
on claims of breach of contract, negligent
PER CURIAM:* misrepresentation, and fraud. We affirm.
*
Pursuant to 5TH CIR. R. 47.5, the court has lished and is not precedent except under the limited
determined that this opinion should not be pub- circumstances set forth in 5TH CIR. R. 47.5.4.
Although the existence of a binding contract
I. is unquestioned, CrossRoad has failed to dem-
Nunn, Yoest is a shipping broker that ar- onstrate that Union Pacific failed to live up to
ranges rail transportation under the business any of its provisions.
name CrossRoad Carriers (“CrossRoad”). It
acts as an intermediary, arranging for the CrossRoad alleges that Union Pacific
shipment of its clients’ cargo on third-party rail breached the agreement by failing timely to
carriers. In August 1997, CrossRoad entered perform its obligations. The principal feature
into an agreement with Union Pacific Railroad of the agreement was the Union Pacific
(“Union Pacific”) that set shipping rates and Revenue Incentive Plan Provision (“incentive
provided for the payment of rebates to Cross- plan”), which obligated UPRR to pay a rebate
Road based on the volume of shipping it to CrossRoad based on the aggregate amount
arranged through UPRR. of business CrossRoad brought to UPRR in
excess of $2.2 million per year. The contract
CrossRoad alleges that as a result of Union does not, however, reference any specific re-
Pacific’s merger with Southern Pacific Rail- quirements or obligations with respect to the
road, there was a deterioration in Union Pa- delivery of CrossRoad’s shipments, but, in-
cific’s service and performance. CrossRoad stead, provides that such shipments are
asserts that its shipments were delayed, mis- governed by the terms of the applicable
handled, and misplaced, and that Union Pacific shipping order and certain external documents,
failed to deliver freight according to the times particularly UP System Exempt Circular 20B.
provided on its schedules. CrossRoad became
so dissatisfied that it elected to ship its cargo Circular 20B provides that “[c]arriers will
on other carriers. transport the shipment in accordance with the
plan of service specified on the shipping order,
In October 1998, CrossRoad sued Union with reasonable dispatch but not on any
Pacific and its parent company, Union Pacific particular train or schedule.” It may be true
Corporation (“UPC”), for breach of contract that this provision imposes on UPRR an obli-
against Union Pacific and for fraud and negli- gation to make reasonably timely delivery of
gent misrepresentation against Union Pacific any particular shipment which it has agreed to
and UPC. Almost three years later, the district deliver. CrossRoad, however, does not claim
court entered summary judgment against damage or delay to particular freight. Instead,
CrossRoad on all claims. We review a sum- it contends that its brokerage business was un-
mary judgment de novo. Bridgmon v. Array dermined by Union Pacific’s generally bad per-
Sys. Corp., 325 F.3d 572, 576 (5th Cir. 2003). formance.
II. According to CrossRoad, Union Pacific’s
To succeed on a claim for breach of con- inefficiency and untimeliness constitutes a
tract, a plaintiff must prove the defendant vio- breach of their agreement, because it prevent-
lated some obligation under the agreement.2 ed CrossRoad from relying on UPRR for its
shipping, and thus precluded it from realizing
2
See Prime Prods., Inc. v. S.S.I. Plastics, Inc.,
97 S.W.3d 631, 636-37 (Tex. App.SSHouston [1st Dist.] 2002, pet. denied).
2
the amounts it had anticipated based on the in- have known, at the time, that it would be
centive plan. As the district court noted, the unable to perform in the manner represented.
parties’ agreement did not render Union Even if we accepted this argument, to support
Pacific a surety of CrossRoad’s business a cause for fraud or misrepresentation a
success. plaintiff must prove that its reliance was
justifiable. See Clardy Mfg. Co. v. Marine
III. Midland Bus. Loans, Inc., 88 F.3d 347, 358,
CrossRoad argues that defendants are liable 360 (5th Cir. 1996). “The justifiableness of
for fraud and negligent misrepresentation in the reliance is judged in light of the plaintiff’s
connection with various statements, including intelligence and experience.” Scottish
projections that Union Pacific’s merger with Heritable Trust, PLC v. Peat Marwick Main &
Southern Pacific Railroad would benefit rail Co., 81 F.3d 606, 615 (5th Cir. 1996).
customers by improving transit times and re- CrossRoad is a sophisticated, long-time
liability of service generally, and additional participant in the freight shipping industry and
representations that the bottlenecking problem cannot demonstrate that its reliance on Union
Union Pacific was experiencing would not Pacific’s optimistic projections was justifiable.5
have a negative impact on CrossRoad’s
shipments. Claims of negligent As here hereinabove explained, and as fur-
misrepresentation, however, must be based on ther explicated by the district court in its co-
past or present facts.3 Consequently, a gent opinion entered June 18, 2002, the
plaintiff may not base such claims on summary judgment is AFFIRMED.
statements regarding future events.4 Likewise,
with some exceptions, an action for fraud
cannot arise from expressions of opinion or
predictions about the future. Bryant v.
Transcon. Gas Pipe Line Co., 821 S.W.2d
187, 190 (Tex. App.SSHouston [14th Dist.]
1991, pet. denied).
CrossRoad contends that the disputed
statements concerning Union Pacific’s
expected performance were expressions of
present facts, because Union Pacific should
3
Allied Vista, Inc. v. Holt, 987 S.W.2d 138,
5
141 (Tex. App.SSHouston [14th Dist.] 1999, pet. See Clardy, 88 F.3d at 358, 360 (stating that
denied); Key v. Pierce, 8 S.W.3d 704, 709 (Tex. sophisticated plaintiffs with industry experience are
App.SSFort Worth 1999, pet. denied). unable, as a matter of law, to prove justifiable
reliance); cf. Presidio Enters., Inc. v. Warner
4
Allied Vista, 987 S.W.2d at 141 (“[T]he sort Bros. Distrib. Corp., 784 F.2d 674, 682 (noting
of ‘false information’ contemplated in a negligent that plaintiffs were experienced executives who
misrepresentation case is a misstatement of existing could not have reasonably relied on
fact, not a promise of future conduct.”). misrepresentations at issue).
3