Equistar Chems., L.P. v. Indeck Power Equip. Co.

• Decision Date: 03 June 2021
• Docket Number: CIVIL ACTION NO. H-19-3757
• Parties: EQUISTAR CHEMICALS, L.P., Plaintiff, v. INDECK POWER EQUIPMENT CO., Defendant.
• Court: U.S. District Court — Southern District of Texas

EQUISTAR CHEMICALS, L.P., Plaintiff, v. INDECK POWER EQUIPMENT CO., Defendant.

CIVIL ACTION NO. H-19-3757

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION

June 3, 2021

MEMORANDUM AND ORDER

Equistar Chemicals, L.P. sued Indeck Power Equipment Company for breach of warranty, breach of contract, and negligence, based on alleged equipment-design and manufacturing defects and negligent service-technician work. (Docket Entry No. 1). Following a six-day bench trial, the court made findings of fact and conclusions of law and entered judgment in favor of Equistar. (Docket Entry Nos. 53, 55). Equistar has moved to recover its attorneys' fees and costs. (Docket Entry Nos. 56, 57). Indeck has moved to amend the court's findings of fact and conclusions of law under Rule 52(b), to amend the judgment under Rule 59(e), and, alternatively, for a new trial under Rule 59(a). (Docket Entry No. 58). The parties have exchanged briefs. (Docket Entry Nos. 59, 60, 61, 62, 63).

I. Indeck's Motion Under Rules 52(b), 59(a), and 59(e)

A. The Legal Standards

For the court to grant Indeck the relief it seeks under Rule 52(b), 59(a), or 59(e), Indeck must show that the court committed a "manifest error of law or fact." See, e.g., Pounds v. Katy Indep. Sch. Dist., 730 F. Supp. 2d 636, 641 (S.D. Tex. 2010) ("[T]o alter or amend the judgment under Rule 59(e), [the moving party] 'must clearly establish either a manifest error of law or fact'" (quoting Rosenzweig v. Azurix Corp., 332 F.3d 854, 863-64 (5th Cir. 2003))); Cooper v. Ocwen Loan Servicing, LLC, No. 3:14-CV-2795-N, 2016 WL 4440485, at *2 (N.D. Tex. July 29, 2016) ("Rule 52(b)'s purpose is, generally, to correct manifest errors of law or fact." (quotation marks omitted)), report and recommendation adopted, No. 3:14-CV-2795-N, 2016 WL 4429248 (N.D. Tex. Aug. 22, 2016); Hicks v. R.H. Lending, Inc., No. 3:18-CV-0586-D, 2020 WL 2065637, at *1 (N.D. Tex. Apr. 29, 2020) ("A motion for a new trial in a nonjury case . . . should be based upon a manifest error of law or mistake of fact, and a judgment should not be set aside except for substantial reasons." (quoting Isystems v. Spark Networks Ltd., 2015 WL 13469855, at *1 (N.D. Tex. Jan. 13, 2015))).

A party may not use a motion under Rule 52(b), 59(a), or 59(e) to repeat previous arguments or raise arguments that could, and should, have been raised at trial. See, e.g., T. B. by & through Bell v. Nw. Indep. Sch. Dist., 980 F.3d 1047, 1051 (5th Cir. 2020) (a Rule 59(e) motion "cannot be used to raise arguments which could, and should, have been made before the judgment issued" (quotation marks omitted)); Templet v. HydroChem Inc., 367 F.3d 473, 478-79 (5th Cir. 2004) (a Rule 59(e) motion "is not the proper vehicle for rehashing evidence, legal theories, or arguments that could have been offered or raised before the entry of judgment"); Cooper, 2016 WL, at *2 (a Rule 52(b) motion "should not be employed . . . to re-litigate old issues, to advance new theories, or to secure a rehearing on the merits").

B. Analysis

Indeck asserts that the court made manifest errors of law when it concluded that:

(1) the Master Contract did not incorporate the terms of the Field Service Rate Sheet;

(2) the Master Contract imposed no duty on Equistar to dispute invoices promptly and in writing;

(3) Indeck was responsible for third-party Vega's charges to Equistar; and(4) Indeck provided inefficient transportation services.

(Docket Entry No. 58 at 2).

Indeck largely repeats the arguments it made and the court rejected at trial. Indeck repeats its arguments that the terms of the Rate Sheet were integrated into the Master Contract, (compare Docket Entry No. 58 at 3 with Docket Entry No. 49 at 15); the Master Contract contained a condition precedent requiring Equistar to dispute invoices promptly in writing, (compare Docket Entry No. 58 at 6-12, with Docket Entry No. 44 at 21, 45, and Docket Entry No. 49 at 8); and Indeck is not liable for damages related to Vega's defective water bridles because Equistar exercised so much control over Vega that Vega stopped being Indeck's subcontractor, (compare Docket Entry No. 58 at 12-15, with Docket Entry No. 44 at 65, and Docket Entry No. 49 at 12, 18, 20). Indeck also presents arguments that could, and should, have been raised at trial, including that the Master Contract distinguished between disputing invoices and disputing work quality and that Equistar "collude[d]" with Vega to disadvantage Indeck. (Docket Entry No. 58 at 15). Those are insufficient bases for the extraordinary relief that Indeck seeks.

Indeck argues that the court misinterpreted Exhibit 75, which is an email from Greg Wassilkowsky, Indeck's director of engineering, to Aaron McKee, Equistar's manager for the Tuscola plant site. (Docket Entry No. 58 at 9-10). In the email, Wassilkowsky stated, in relevant part:

As Lyondell has elected to hold back funds due to the back charge claims above [in McKee's email] ([]in clear conflict with our contract), Indeck will require full payment of the chamber extensions and back up water columns prior to their shipment. Indeck believes the current monetary hold back of $141,000.00 for the claims outlined in Mr. McKee's E-mail is excessive and obviously cannot continue to grow by arbitrarily refusing to pay for past onsite field service work, and again, this is not in accordance with our contract.

. . .

Indeck is requesting Lyondell to prepare a complete accounting of the claims so Indeck and Lyondell can come to a mutually agreeable resolution, before our technician returns to your site to complete your project.

(Id. at 10 (quoting Indeck Exh. 75)). In its Memorandum and Order, the court cited Exhibit 75 as support for the finding that "Wassilkowsky . . . stated that Indeck would not pay for a service technician to continue working at the Tuscola plant unless Equistar paid all the amounts Indeck had invoiced Equistar, including amounts that Equistar disputed." (Docket Entry No. 53 at 13-14). Indeck argues that, properly read, Exhibit 75 shows that Wassilkowsky demanded prepayment for two boiler components before shipping them. (Docket Entry No. 58 at 10).

Indeck's argument does not establish that amendment or a new trial is warranted. Indeck appears to argue that Exhibit 75 supports the conclusion that the Master Contract included a condition precedent that required Equistar to promptly dispute invoices in writing. The court's conclusion that the Master Contract did not contain such a condition precedent was not based on, or affected by, Exhibit 75. (See Docket Entry No. 53 at 25-26). The court concluded that no condition precedent existed based on the language of the Master Contract and Texas law. Even if the court misread Exhibit 75, it was not an error warranting relief under Rule 52(b), 59(a), or 59(e).

Indeck also argues that the court erred in determining that it did not provide efficient transportation services, because the record "contains no evidence as to what is a 'reasonable and usual or customary time' for transportation." (Docket Entry No. 58 at 16). Perry Danniger Smith, Equistar's project manager for the boiler project, and Michael Holt, an Equistar engineer, credibly testified that Indeck delayed providing necessary customs paperwork for the boilers, which led to a five- or six-week delay in the boiler delivery. (Docket Entry No. 53 at 23). Marsha Forsythe, Indeck's president and chief executive officer, testified that Indeck did not delay the customs paperwork, but the court did not find her testimony credible on this point. (Id. at 24). Based on the credible testimony and other record evidence, the court found that Indeck delayed the customspaperwork, which delayed the boiler delivery. That intentional delay violated Indeck's contractual obligation to provide "efficient" transportation services to Equistar.

Indeck has not met its burden of showing a manifest error of law or fact, and it is not entitled to the extraordinary relief that it seeks. Indeck's motion to amend the court's findings of fact and conclusions of law, to amend the judgment, and for a new trial, (Docket Entry No. 58), is denied.

II. The Rule 54 Motion for Attorneys' Fees

Federal Rule of Civil Procedure 54(d)(2) permits the court to enter a postjudgment award for attorneys' fees. The party seeking a fee award must file a motion showing: (1) the judgment and the legal basis for the fee award; (2) the amount sought or a fair estimate of it; and (3) the terms of any fee agreement, if the court orders. FED. R. CIV. P. 54(d)(2)(B). The party seeking fees has the burden of showing entitlement to them. Kinsel v. Lindsey, 526 S.W.3d 411, 427 (Tex. 2017).

"In diversity cases[,] state law governs the award of attorney's fees." Transverse, L.L.C. v. Iowa Wireless Servs., L.L.C., 992 F.3d 336, 344 (5th Cir. 2021) (quotation marks omitted). The court's Memorandum and Order awarded fees to Equistar under Chapter 38 of the Texas Civil Practice and Remedies Code, which allows fees for claims based on a contract, the performance of services or labor, or the furnishing of materials. (Docket Entry No. 53 at 36-37); TEX. CIV. PRAC. & REM. CODE § 38.001. Equistar's claims are based on a written contract and fit within those categories.

Equistar seeks $294,751.50 in attorneys' fees, supported by a declaration by Mark Waite, Equistar's lead counsel, and billing records. (Docket Entry No. 56-1 at 3-7, 20-44; Docket Entry No. 60 at 9). Equistar bases the $294,751.50 amount on the lodestar method of multiplying thenumber of hours reasonably spent on a case by the reasonable hourly rates, with the result adjusted as needed. (Docket Entry No. 56 at 3-5); Cruz v. Maverick Cty., 957 F.3d 563, 574 (5th Cir. 2020); Migis v. Pearle Vision, Inc., 135 F.3d 1041, 1047 (5th Cir. 1998).

Equistar states that its attorneys worked 673.9 hours and charged hourly rates ranging from $190 for a senior paralegal to $640 for Waite, who is the managing partner of...