Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Nortech, Inc. v. Shawcor Canada Holdings Ltd.

Court of Appeals of Texas, First District

June 29, 2017

NORTECH, INC., Appellant

         On Appeal from the 190th District Court Harris County, Texas Trial Court Case No. 2013-51923

          Panel consists of Justices Keyes, Higley, and Lloyd.


          Russell Lloyd Justice

         Appellant, Nortech, Inc. (Nortech), challenges the trial court's rendition of summary judgment in favor of appellee, ShawCor Canada Holdings Ltd. (Holdings), in Nortech's suit against Holdings for breach of contract. In two issues, Nortech argues that the trial court erred by granting summary judgment in Holdings' favor because the agreement was subject to only one reasonable interpretation-Nortech's interpretation-and, alternatively, that the trial court erred in granting summary judgment because the agreement's disputed provision is ambiguous. We affirm.


         Nortech helps overseas companies obtain goods and services in the U.S. oil and gas industry. In 1997, Nortech and Thermotite, AS, a pipe insulation and coating company, signed a contract in which Thermotite agreed to pay Nortech a commission for certain types of pipe coating work that Thermotite performed on heated pipe.

         In 2001, "Bredero-Shaw Company" (Bredero)[1] acquired Thermotite, and, on January 22, 2002, Bredero and Nortech entered into a new commission agreement (the 2002 Agreement) that covered projects that utilized Thermotite technology or products and replaced all prior agreements between Thermotite and Nortech.[2]

         Section 4 of the 2002 Agreement provided, in relevant part:

Nortech shall receive commissions in accordance with the attached Exhibit B for all projects listed on Exhibit B in the event Bredero is successful winning in such projects . . . .
In addition, Nortech shall receive commissions for any other project where the RFQ or similar is issued to Bredero or an affiliate . . . .
Nortech shall also receive 1/2% commission on any BP projects in the Gulf of Mexico where the RFQ or similar is issued to Bredero or an affiliate . . . .

         A Bredero affiliate was awarded the Crazy Horse/Thunder Horse contract, a BP project in the Gulf of Mexico, which is listed in Exhibit B of the Settlement Agreement. Invoices from Nortech to "Bredero Shaw" from 2004 to 2006 demonstrate that, as of January 2006, "Bredero Shaw" had paid Nortech a commission of approximately $19, 000 for the Crazy Horse/Thunder Horse project.

         Bredero was a wholly owned subsidiary of ShawCor, Ltd. (ShawCor). In 2009, all of ShawCor's U.S. and Canadian pipe coating operations were combined into ShawCor's "Bredero Shaw" Division, which is also referred to as the Bredero Shaw Group.[3]

         In January 2011, three of ShawCor's wholly owned holding companies- ShawCor Canada Holdings Ltd., Bredero, and Shaw Worldwide Services Inc.- merged by means of an "amalgamation" to become Holdings. As part of the amalgamation, all assets and liabilities of the three entities were transferred to Holdings. Although Holdings was not part of the Bredero Shaw Group, some of its assets were, including ShawCor Pipe Protection, LLC (SPP), Bredero Shaw Norway AS, and Bredero Shaw Mexico SA de CV.[4] Among its other interests, Holdings also acquired a 40% interest in Socotherm USA, LLC's (Socotherm) parent company, Fineglade, Ltd. (Fineglade), in November 2010. At the time, Fineglade owned a 95% interest in Socotherm S.p.A., a publicly traded, and independently managed, Italian company. Socotherm S.p.A. owned over 90% of Socotherm Americas, a publicly traded, and independently managed, Argentinian company that owned all of Socotherm USA, LLC. Holdings acquired the other 60% interest in Fineglade in October 2012. Fineglade was not part of the Bredero Shaw Group.

         After a dispute arose regarding commissions Nortech claimed that it was owed under the 2002 Agreement, Nortech and "Bredero Shaw Company" entered into a May 2012 settlement agreement (the Settlement Agreement). John Tikkanen, Holdings' Executive Vice-President, signed the Settlement Agreement as "president" of "Bredero Shaw Company." When the Settlement Agreement was signed, SPP and another ShawCor company, Bredero Shaw, LLC, were the only two companies that operated under the name "Bredero Shaw, " and they were commonly referred to as "Bredero Shaw Company." While SPP "entered into most pipe coating contracts in the United States, " Bredero Shaw, LLC did not enter into contracts in 2011 and 2012.

         The Settlement Agreement contains two different payment obligations. The first payment obligation is set forth in Section 1, and it requires "Bredero" to "pay Nortech the sum of $1, 100, 00.00" within "15 days after receipt by Bredero of this Agreement, fully executed by Nortech."[5] "Bredero" is defined as "Bredero Shaw Company."

         The second payment obligation which is set forth in Section 2 of the Settlement Agreement states:

Should Bredero be successful in winning the Lianzi Project, it will pay a commission to Nortech equal to 1.5% of any amount received by Bredero or its affiliates or partners from the execution of the project. Such commissions shall be payable 15 days after Bredero has received payment from the customer. In case payment is made in progress installments, the commission will be paid pro-rata as Bredero receives each installment payment.

         The Lianzi Project was an oil and gas project off the coast of Africa that was owned by Chevron.

         Two competing bids were submitted for pipe coating work on the project. The first was by "Bredero Shaw." According to Jeff Beard, who managed contracts for multiple entities under ShawCor's Bredero Shaw Group in 2012 and negotiated the Settlement Agreement for "Bredero Shaw, " the Bredero Shaw Group was preparing to bid on the project when the Settlement Agreement was being negotiated and executed. Beard testified that, although Chevron's formal request for bids on the Lianzi Project and Bredero Shaw Group's submission of the formal bid occurred after the Settlement Agreement was signed, there had been initial communications from "Bredero Shaw" to Chevron prior to that time "providing guidance on the systems, the types of systems, how they would react, and the potential coating locations that [Bredero Shaw] would provide a bid from." According to Beard, "Bredero Shaw" knew that they would be submitting a bid on the project for "three different locations; Norway, Beaumont, Mexico, " and "three different entities within the Bredero Shaw organization or ShawCor that are all within the Bredero Shaw coating arm, " and he conveyed that information to Nortech's president when they were negotiating the Settlement Agreement.

         The final "Bredero Shaw" bid which was submitted on August 20, 2012 generally refers to "Bredero Shaw, " prominently references ShawCor, and mentions multiple other entities, such as SPP, all of which are affiliates of Holdings. Tikkanen testified that the "Bredero Shaw" bid was submitted by SPP and that if "Bredero Shaw" had been awarded ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.