817 F.3d 901 (5th Cir. 2016), 15-10087, Luig v. North Bay Enterprises, Inc.

Docket Nº:15-10087
Citation:817 F.3d 901
Opinion Judge:STEPHEN A. HIGGINSON, Circuit Judge
Party Name:PERRY J. LUIG, Plaintiff - Appellee v. NORTH BAY ENTERPRISES, INCORPORATED, Defendant - Appellant
Attorney:For PERRY J. LUIG, Plaintiff - Appellee: Gant Grimes, Matthew David Anderson, Gibson, Davenport & Anderson, Wichita Falls, TX. For NORTH BAY ENTERPRISES, INCORPORATED, Defendant - Appellant: Thad D. Spalding, Esq., Kirk Louis Pittard, Esq., Kelly, Durham & Pittard, L.L.P., Dallas, TX.
Judge Panel:Before HIGGINBOTHAM, SOUTHWICK, and HIGGINSON, Circuit Judges.
Case Date:March 28, 2016
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
SUMMARY

This appeal stems from a dispute over whether plaintiff breached the contract between the parties by failing to deliver a helicopter that met the specifications of the purchase agreement. The district court sua sponte granted summary judgment for plaintiff and dismissed North Bay's counterclaim for breach of contract. The district court then denied North Bay's motion to alter or amend its... (see full summary)

 
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817 F.3d 901 (5th Cir. 2016)

PERRY J. LUIG, Plaintiff - Appellee

v.

NORTH BAY ENTERPRISES, INCORPORATED, Defendant - Appellant

No. 15-10087

United States Court of Appeals, Fifth Circuit

March 28, 2016

As Revised, March 28, 2016.

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Appeal from the United States District Court for the Northern District of Texas.

For PERRY J. LUIG, Plaintiff - Appellee: Gant Grimes, Matthew David Anderson, Gibson, Davenport & Anderson, Wichita Falls, TX.

For NORTH BAY ENTERPRISES, INCORPORATED, Defendant - Appellant: Thad D. Spalding, Esq., Kirk Louis Pittard, Esq., Kelly, Durham & Pittard, L.L.P., Dallas, TX.

Before HIGGINBOTHAM, SOUTHWICK, and HIGGINSON, Circuit Judges.

OPINION

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STEPHEN A. HIGGINSON, Circuit Judge

North Bay Enterprises entered into a contract to purchase a helicopter from Perry J. Luig. The parties dispute whether Luig breached the contract by failing to deliver a helicopter that met the specifications of the purchase agreement. Below, the district court effectively granted summary judgment in favor of Luig by dismissing North Bay's breach of contract counterclaim with prejudice. The district court then denied North Bay's motion to alter the judgment or to amend its pleadings according to Federal Rules of Civil Procedure 59(e). North Bay timely appealed. Because we find that the district court abused its discretion when denying North Bay's 59(e) motion, we vacate the denial of summary judgment and dismissal of North Bay's counterclaim.

I.

On September 11, 2012, North Bay signed an Aircraft Purchase Agreement to purchase Luig's helicopter for $110,000. According to the Agreement, following a " pre-purchase inspection," Luig would deliver the helicopter " with all systems in an airworthy condition and a current Certificate of Airworthiness," and North Bay would accept the aircraft in an " as is where is" condition. The airworthiness certificate that accompanied the Agreement identified the helicopter as a type " 47 G3B1." North Bay asserts that the aircraft was not a type 47 G3B1 due to removal of the turbo charger and other modifications that occurred prior to the sale. Because the aircraft was to be flown in the United States, it was also subject to Federal Aviation Administration regulations and airworthiness directives, including Airworthiness Directive " 80-04-04." However, as noted by North Bay and the district court, there was no evidence that the aircraft was in compliance with the directive. Compliance with Directive 80-04-04, including the proper recording of compliance, is necessary to be legally airworthy. Following

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the pre-purchase inspection and several repairs, Luig delivered the aircraft to North Bay.

After being alerted to North Bay's concerns that the helicopter was not airworthy, Luig filed a declaratory judgment action in state court. North Bay removed Luig's declaratory judgment action to federal court and asserted a counterclaim for breach of contract. North Bay then filed a motion for summary judgment on its breach of contract counterclaim. In its brief accompanying the motion, North Bay alleged that Luig breached the contract because the airworthiness certificate specified a different type of helicopter and because the helicopter was not airworthy given that it was not in compliance with Directive 80-04-04. North Bay did not brief any of the other elements of the contract counterclaim.

The district court denied North Bay's motion for summary judgment and effectively granted sua sponte summary judgment for Luig by dismissing North Bay's contract counterclaim and addressing Luig's request for declaratory relief. The district court held that North Bay's contract counterclaim failed as a matter of law because North Bay did not reject or revoke the helicopter, and under Texas law, " damages are only permitted under a breach of contract cause of action when the seller has failed to deliver the...

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