MDK Sociedad De Responsabilidad Limitada v. Proplant Inc.

• Decision Date: 09 February 2022
• Docket Number: No. 21-20207,21-20207
• Citation: 25 F.4th 360
• Parties: MDK SOCIEDAD DE RESPONSABILIDAD LIMITADA, Plaintiff—Appellant/Cross-Appellee, v. PROPLANT INCORPORATED (Texas); Proplant Incorporated (Nevada), Defendants—Appellees/Cross-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

25 F.4th 360

MDK SOCIEDAD DE RESPONSABILIDAD LIMITADA, Plaintiff—Appellant/Cross-Appellee,

v.PROPLANT INCORPORATED (Texas); Proplant Incorporated (Nevada), Defendants—Appellees/Cross-Appellants.

No. 21-20207

United States Court of Appeals, Fifth Circuit.

FILED February 9, 2022

Christopher A. Zampogna, Washington, DC, for Plaintiff—Appellant/Cross-Appellee.

Jill Schumacher, John Francis Luman, III, Edward Coe Tredennick, Daniels & Tredennick, P.L.L.C., Houston, TX, for Defendants—Appellees/Cross-Appellants.

Before Jones, Higginson, and Duncan, Circuit Judges.

Stephen A. Higginson, Circuit Judge:

MDK Sociedad de Responsabilidad Limitada ("MDK"), a Bolivian entity, and Proplant, Inc., a Texas-based corporation, jointly pursued a lucrative operations and maintenance contract with Bolivia's state-owned energy company. After the deal fell through, MDK sued Proplant under both breach of contract and tort theories. Before discovery was complete, the district court granted Proplant's motion for summary judgment. We AFFIRM.¹

I.

MDK's complaint alleges that Proplant provided MDK with a proposed contract for subcontractor services in October 2016 ("the October Document"). MDK alleges that as of November 11, 2016, it had not executed the October Document. The district court found that MDK never signed the October Document, and nothing in the record indicates otherwise.

MDK alleges that, in November 2016, Proplant told MDK that Proplant would provide the bid and performance bonds for a "potential contract in Bolivia." Proplant allegedly waited until the final days before the due date before asking for more time to provide the bond. On December 13, 2016, Proplant allegedly informed MDK that, because of complexities relating to sending money overseas, it could not submit the bond. Proplant allegedly asked MDK to submit the bond instead. MDK allegedly replied that it would only submit the bond if Proplant signed a contract promising to pay MDK for the bond.

The record indicates that on December 13, 2016, MDK and Proplant executed a "Commitment Agreement." The Commitment Agreement explained that Yacimientos Petroliferos Fiscales Bolivianos ("YPFB"), Bolivia's state-owned energy company, was soliciting bids for an operations and maintenance ("O&M") contract. The Commitment Agreement provided that MDK would assist Proplant with its efforts to obtain this O&M contract by collecting and filing certain documents for Proplant and by tendering to YPFB a bid bond of $500,000. In return, Proplant promised to furnish MDK with certain documents. Proplant also promised to take several other actions if it were "awarded" the O&M contract. Specifically, Proplant promised (1) "to execute the O&M agreement with YPFB pursuant to the terms set forth in" certain documents; (2) to pay MDK $500,000, plus bank charges, if it "decides not to execute the O&M agreement"; (3) "to subcontract MDK to provide all the services as set forth in" a separate document; and (4) to pay MDK $1 million from its "profits resulting from the execution of the Project."

The parties agree² that on December 14, 2016, Proplant bid on the YPFB project for the first time. They further agree that after YPFB declared the project deserted on December 30, Proplant bid on the YPFB project for a second time on January 19, 2017. MDK alleges that it submitted a $500,000 bid bond to YPFB and that Proplant assured MDK that it would "issue the contract bond if the bid is awarded."

The parties agree that a Proplant representative and an MDK representative met with YPFB on March 20, 2017. Mike Antony, an owner of Proplant, submitted a declaration stating that at this meeting, YPFB agreed to incorporate thirty technical and commercial changes into the parties' bid. Antony further declared that YPFB requested that Proplant submit certain documents and a performance bond.

MDK alleges that on March 22, 2017, YPFB awarded Proplant the O&M contract. MDK further alleges that, after being awarded the contract, Proplant was required to tender certain documents to YPFB and to deliver a performance bond. Proplant allegedly tendered the documents late and never provided the bond. On April 18, 2017, Proplant allegedly informed MDK that it would not submit the bond.

The record indicates that on April 3, 2017, an MDK representative named Pablo Miya sent a WhatsApp message to a Proplant representative named Murthy Chitturi stating, "I just received a call from these guys saying that weird things are happening inside YPFB and that please we have to hurry up with the documents and sign the contract ASAP." Then on April 4, Miya messaged Chitturi, "ypfb deadline will be thursday 14th. If we dont sign the contract and submit the 2 bonds by that date. Legal area will cancell the bidding process and executing the bid bond."

The parties agree that on April 5, "Techna sent a Letter of Transparency complaining about the bid process." Miya later messaged Chitturi, "Everything happened because Tecna [sic] sent that letter."

Antony declared that on April 6, he travelled with Miya to YPFB's office in Bolivia to personally deliver the requested documents. However, Antony continued, because YPFB's contract manager did not show up to receive the documents, Antony and Miya left the documents with the manager's secretary. Antony further explained that after again trying and failing to deliver the documents to YPFB several days later, Proplant representatives emailed the documents to YPFB. Antony concluded his declaration by stating that YPFB "failed to ever provide Proplant with a contract to execute."

The parties agree that on April 21, 2017, "YPFB declared the project deserted." The parties further agree that they jointly sought legal advice from Bolivian lawyers, who advised them that because YPFB had deserted the project, it was legally obligated to return the bid bond to MDK. The Bolivian lawyer stated in an email to Proplant, "YPFB is being abusive and its actions are politically driven." The lawyer suggested two legal avenues that the parties could pursue, but he suggested that because "[t]he counter party is the Bolivian State (YPFB)," "any legal action could be seriously undermined by the current political scenario in our country." Proplant forwarded the email to MDK, explaining that the Bolivian lawyer had proposed "two options to counter the politically driven decision by YPFB with no fault of us."

In February 2018, MDK sued Proplant. MDK's complaint raises six causes of action. First, MDK claims that Proplant breached the October Document. Second, MDK claims that Proplant committed common law fraud by promising MDK in November 2016 that it would provide a bid bond even though it did not intend to do so. Third, MDK claims that Proplant breached the Commitment Agreement. Fourth, MDK claims that Proplant made negligent misrepresentations related to the Commitment Agreement. Fifth, MDK claims that Proplant fraudulently induced MDK into signing the Commitment Agreement. Finally, MDK claims that Proplant committed common law fraud with respect to the Commitment Agreement.

On February 20, 2018, the district court issued an "Order for Conference," ordering the parties to exchange initial disclosures and to be "prepared to discuss discovery in a conference so that the court may fashion a brief, effective management plan." The court ordered counsel to "appear for an initial pretrial conference" on May 14, 2018. At that conference, the court ordered the parties to "file a joint chronology with supporting data" by May 30. The court also ordered, "Formal discovery is quashed. The parties will talk." Finally, the court ordered the dismissal of several Proplant representatives from the case. On June 26, the court issued another order. In addition to dismissing another Proplant defendant and repeating the court's prior admonition that "[t]he parties will talk," this order instructed the parties to submit a document explaining "to the court why the project with [YPFB] ended and what steps should be taken to advance the litigation." Finally, on August 1, the court ordered the parties to "exchange their data about the life of the deal and to "tell the court whether they want to mediate and with whom." The court also signed an order establishing "a procedure for disclosing confidential information, protecting it, and challenging it."

On September 4, 2018, Proplant moved for summary judgment, asking the district court "to dismiss MDK's claims in their entirety." The court granted the motion, dismissing both of MDK's breach of contract claims along with its various tort claims. MDK appealed.

II.

MDK argues that the district court abused its discretion by ruling on Proplant's summary judgment motion before the parties had completed discovery.

The Federal Rules of Civil Procedure give district courts the power to grant summary judgment motions before the parties have completed discovery. See FED. R. CIV. P. 56(b) ("Unless a different time is set by local rule or the court orders otherwise, a party may file a motion for summary judgment at any time until 30 days after the close of all discovery."); Mendez v. Poitevent , 823 F.3d 326, 336 (5th Cir. 2016) (" Rule 56 does not require that any discovery take place before summary judgment can be granted." (citation omitted)). The Rules also protect parties from premature summary judgment motions, providing that if a "nonmovant shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition, the court may: (1) defer considering the motion or deny it; (2) allow time to obtain affidavits or declarations or to take discovery; or (3) issue any other appropriate order." FED. R. CIV. P. 56(d). However, "non-moving parties requesting Rule 56(d) relief ‘may not simply rely on vague assertions that additional discovery will produce needed, but unspecified, facts.’ " Am. Family Life Assurance Co. of Columbus v. Biles , 714 F.3d 887, 894 (5th Cir. 2013) (quot...