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Southwest Refrigerated Warehousing Services Joint Venture v. M.A. & Sons, Inc.

United States District Court, W.D. Texas, El Paso Division

September 21, 2017

SOUTHWEST REFRIGERATED WAREHOUSING SERVICES JOINT VENTURE, Plaintiff,
v.
M.A. & SONS, INC., Defendant.

          MEMORANDUM OPINION AND ORDER

          DAVID C. GUADERRAMA UNITED STATES DISTRICT JUDGE

         Presently before the Court is Plaintiff Southwest Refrigerated Warehousing Services Joint Venture's ("Southwest") "Motion for Summary Judgment on Claim for Breach of Storage Agreement" (ECF No. 14) filed on July 11, 2017. Southwest brought this action against Defendant M.A. & Sons, Inc. ("M.A.") alleging that M.A. breached its storage agreement with Southwest. By its Motion, Southwest asks the Court to enter summary judgment against M.A. on Southwest's breach of contract claim. For the reasons that follow, the Court DENIES Southwest's motion.

         I. BACKGROUND 1

         This lawsuit arises from a dispute between Southwest and M.A. regarding their respective duties under a storage contract. M.A. is a New Mexico company that harvests, processes, and sells chile product.[2] Southwest operates a refrigerated storage facility in El Paso, Texas.[3] In September 2015, M.A. contracted with Southwest to store its chile[4] product in Southwest's facility subject to Southwest's "Standard Contract Terms and Conditions for Merchandise Warehouses" (the "Storage Agreement").[5] In October 2015, M.A. began accruing unpaid charges related to Southwest's storage of its chile product.[6] Unpaid charges continued to accrue until September 11, 2016.[7]

         Nevertheless, in January 2016, M.A. discovered that the packaging holding a significant portion of its chile product had been damaged while being stored with Southwest.[8] The damage to the packaging containing M.A.'s chile product caused the effected chile product to spoil.[9] In order to determine the extent of the damage, M.A. had to withdraw its chile product from storage with Southwest and transport it for inspection and testing.[10] After inspection and testing, M.A. returned the chile product to Southwest for storage while it inspected and tested the next truckload of chile product.[11] All in all, this process continued from the discovery of the damage in January 2016 until June or July 2016.[12]

         According to M.A., on August 24, 2016, Southwest refused to allow it to withdraw any of its remaining undamaged packages of chile product from the facility.[13] Subsequently, on September 5, 2016, Southwest filed suit against M.A. in the El Paso County Court.[14] M.A. removed the case on September 19, 2016, on the basis of diversity jurisdiction.[15] Southwest asserts that M.A. owes it at least $122, 219.02, the outstanding balance of the accrued storage charges from October 2015 to September 2016.[16] M.A. argues that Southwest owes it $355, 810, the direct loss from the 355, 810 pounds of chile product that Southwest allegedly damaged.[17]

         II. STANDARD

         Summary judgment is appropriate when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). "A genuine dispute of fact exists when evidence is sufficient for a reasonable jury to return a verdict for the non-moving party, and a fact is material if it 'might affect the outcome of the suit.'" Willis v. Cleco Corp., 749 F.3d 314, 317 (5th Cir. 2014) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). In deciding whether a genuine dispute as to any material fact exists, a trial court considers all of the evidence in the record and "draw[s] all reasonable inferences in favor of the nonmoving party, " but it "refrain[s] from making credibility determinations or weighing the evidence." Turner v. Baylor Richardson Med. Or., 476 F.3d 337, 343 (5th Cir. 2007) (citation and internal quotation marks omitted).

         Procedurally, the party moving for summary judgment "bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact."[18] EEOC v. LHC Grp., 773 F.3d 688, 694 (5th Cir. 2014) (alterations in original) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). If the moving party succeeds, "the onus shifts to the nonmoving party to go beyond the pleadings and by her own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial." E.E.O.C, 773 F.3d at 694 (internal quotation marks omitted) (citing Celotex Corp., 477 U.S. at 324). However, the nonmoving party "cannot defeat summary judgment with conclusory allegations, unsubstantiated assertions, or only a scintilla of evidence." Davis v. Fort Bend Cty., 765 F.3d 480, 484 (5th Cir. 2014) (citing Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc) (per curiam)).

         In evaluating whether the parties have met their respective burden, "the Court considers only competent summary judgment evidence." Reeves v. Wells Fargo Bank, NA, No. EP-14-CV- 00187-DCG, 2015 WL 11598711, at *1 (W.D. Tex. Sept. 4, 2015) (citing, inter alia, Goodwin v. Johnson, 132 F.3d 162, 186 (5th Cir. 1997)); see also Fed. R. Civ. P. 56(c).

         III. DISCUSSION

         By its Motion, Southwest requests the Court enter summary judgment against M.A. on Southwest's breach of contract claim. Southwest contends that there is no genuine dispute of material fact regarding any of the elements of its breach of contract claim. Pl's Mot. Summ. J. at 4. "In Texas, the elements of a claim for breach of contract are: (1) a valid contract between the plaintiff and the defendant, (2) performance or tender of performance by the plaintiff, (3) breach by the defendant, and (4) damage to the plaintiff as a result of the breach." Garofolo v. Ocwen Loan Servicing, L.L.C., 669 F.App'x 219, 220 (5th Cir. 2016) (per curiam) (internal quotation marks omitted) (quoting Lawyers Title Ins. Corp. v. Doubletree Partners, L.P., 739 F.3d 848, 858 (5th Cir. 2014)). Southwest "bears the initial burden of showing" that there is no genuine dispute of material fact as to any of the elements. York Grp, Inc. v. Horizon Casket Grp, Inc., 459 F.Supp.2d 567, 572 (S.D. Tex. 2006).

         Southwest is correct that there is no dispute regarding the validity of the contract between it and M.A. Def.'s Resp. Pl's Mot. Summ. J. at 3. However, M.A. challenges Southwest's contention that there is no genuine issue of material fact as to any of the other elements. Specifically, it argues that Southwest cannot prove that it tendered satisfactory performance or that M.A. breached the contract. Id. at 3-4. It avers that Southwest damaging M.A.'s chile product was a prior material breach of the contract that excused M.A. from any further performance of the agreement. Id.

         "It is a fundamental principle of contract law that when one party to a contract commits a material breach of that contract, the other party is discharged or excused from further performance." Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195, 196 (Tex. 2004). "A breach of contract occurs when a party fails to perform an act that it has expressly or impliedly promised to perform." Stewart v. Sanmina Texas L.P., 156 S.W.3d 198, 214 (Tex. App.-Dallas 2005, no pet.). However, Southwest argues that M.A. cannot point to a provision in the Storage Agreement that Southwest breached. Pl's Reply Def.'s Resp. Pl's Mot. Summ. J. at 2. Yet, Section 11 of the Storage Agreement provides:

Warehouse shall not be liable for any loss or damage to goods tendered, stored or handled however caused unless such loss or damage resulted from the failure by warehouse to exercise such care in regard to them as a reasonably careful person would exercise under like circumstances and warehouse is not liable for ...

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