     Case: 13-51098           Document: 00513142119          Page: 1    Date Filed: 08/05/2015




                                REVISED August 5, 2015

              IN THE UNITED STATES COURT OF APPEALS
                       FOR THE FIFTH CIRCUIT
                                                                               United States Court of Appeals
                                                                                        Fifth Circuit

                                                                                      FILED
                                           No. 13-51098                           June 11, 2015
                                                                                 Lyle W. Cayce
TRANSVERSE, L.L.C.,                                                                   Clerk


                   Plaintiff–Appellee–Cross-Appellant,

v.

IOWA WIRELESS SERVICES, L.L.C., doing business as i wireless,

                   Defendant–Appellant–Cross-Appellee.



                       Appeals from the United States District Court
                            for the Western Division of Texas
                                  USDC No. 1:10-CV-517


Before DAVIS and ELROD, Circuit Judges. *
PER CURIAM: **
         Iowa Wireless Services (IWS) hired Transverse to develop customized
billing software. When the parties’ business relationship unraveled, they sued
each other for breach of a “Supply Contract,” breach of a non-disclosure
agreement, and on several claims sounding in tort. After the dust settled in


         *   This opinion is being entered by a quorum of this court pursuant to 28 U.S.C. Section
46(d).

         Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
         **

be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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                                     No. 13-51098
the district court, Transverse was awarded $11.7 million in damages for IWS’s
breach of the Supply Contract, but the district court rejected Transverse’s tort
claims and its claim that IWS breached the non-disclosure agreement. Each
party appealed various aspects of the judgment. As we explain below, we
affirm in part, reverse and render in part, vacate in part, and remand for
further proceedings consistent with this opinion. 1
                                            I.
       The parties in this case are IWS, a wireless telephone service provider,
and Transverse, a telecommunications billing software development company.
For several years, IWS had used a billing system developed and maintained by
a company called Convergys. However, in late 2008, Convergys notified IWS
that it (i.e., Convergys) would discontinue its billing system in March 2010.
IWS set out to find a replacement billing system, eventually hiring Transverse
to develop a billing system based on Transverse’s software, which was known
as “blee(p).” 2 Although the billing system would be based on blee(p), it was not
to be an off-the-shelf product; rather, it was to be customized to meet IWS’s
particular needs and specifications. IWS and Transverse signed two separate
agreements to govern their relationship.            The first was a “Mutual Non-
Disclosure Agreement” (NDA), in which IWS agreed not to use or disclose
Transverse’s “Confidential Information.” The second was a Supply Contract
purportedly obligating Transverse to develop customized billing software for
IWS.



       1 IWS filed a Motion to Supplement the Record and View Sealed Documents,
requesting to supplement the record with and to view sealed exhibit 643, for which
Transverse claimed privilege at trial. The Motion to Supplement was granted and the Motion
to View Sealed Documents was carried with the case. The Motion to View Sealed Documents,
which was unopposed, is GRANTED.

       2The name “blee(p)” is an acronym for “Business Logic Execution Environment
Platform.”
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                                 No. 13-51098
      The Supply Contract called for the mutual development of a “Controlling
Specification” and “acceptance criteria”—i.e., customized features and
functionality that Transverse needed to build into the billing software to
satisfy its end of the bargain. According to the Supply Contract, Transverse
was required to “satisfy the [a]cceptance criteria no later than 11:59 PM
Central Standard Time February 28, 2010,” which was the date when
Convergys planned to discontinue IWS’s old billing system. However, the
acceptance criteria were not enumerated in the Supply Contract; rather, the
parties agreed to negotiate and develop a “User Acceptance Test” (UAT)
document that would contain the acceptance criteria.        To that end, after
signing the Supply Contract, IWS and Transverse met several times to discuss
IWS’s needs and blee(p)’s capabilities. A draft UAT document was created,
and IWS employees recorded the content of the parties’ discussions in a set of
meeting notes.
      In early February 2010, the parties agreed that the project was behind
schedule.   IWS, without “waiving any rights or terms under the original
contract,” agreed to a timeline change that divided delivery of the system into
four parts over an extended period of time. IWS also procured an extension
with Convergys through June 2010 and reached out to IDI, a competitor of
Transverse’s, about the possibility of IDI’s developing a billing system for IWS.
To help bring IDI up to speed on IWS’s needs, IWS sent IDI the draft UAT
document and the meeting notes from the various meetings between IWS and
Transverse.
      February 28 came and went, and IWS and Transverse still had not
finalized the UAT document (for reasons the parties vigorously dispute).
Because the UAT document was not finalized, no acceptance criteria existed
and, needless to say, Transverse had not satisfied the acceptance criteria.


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                                  No. 13-51098
      IWS and Transverse finally agreed to a UAT document containing the
acceptance criteria on March 13, 2010. Two months later, Transverse still had
not satisfied the acceptance criteria (or even delivered the first part of the
divided delivery plan). IWS then terminated the Supply Contract, claiming
that Transverse had materially breached the contract by not delivering an
“acceptable billing system on or before February 28, 2010.”            After IWS
terminated the Supply Contract, it procured an additional extension from
Convergys and formally contracted with IDI.
      Transverse filed a lawsuit against IWS in Texas state court, alleging,
inter alia, breach of the Supply Contract, breach of the NDA, misappropriation
of trade secrets, violation of the Texas Theft Liability Act, and conversion. IWS
removed the case to federal district court and counterclaimed for, inter alia,
breach of the Supply Contract. The parties’ claims alleging breach of the
Supply Contract were tried to the jury, while Transverse’s claims for breach of
the NDA, trade secret misappropriation, conversion, and violation of the Texas
Theft Liability Act were tried to the bench pursuant to a jury-waiver provision
in the NDA.
      The jury found in favor of Transverse, determining that IWS breached
the Supply Contract by wrongfully terminating it and by “giving a competitor
access to the Service,” in violation of an express prohibition in the Supply
Contract.   The jury awarded Transverse $10 million for lost profits, $1.7
million in reliance damages, and $9.3 million for lost value of blee(p) as a result
of IWS’s “access to the Service” breach. However, the district court set aside
the $9.3 million award, finding that it was not supported by legally sufficient
evidence. The district court ruled against Transverse on its tort claims and on
its claim for breach of the NDA. The parties cross-appealed.




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                                       No. 13-51098
                                             II.
       We review the district court’s factual findings for clear error and its legal
conclusions de novo. Arete Partners, L.P. v. Gunnerman, 594 F.3d 390, 394
(5th Cir. 2010). The question of whether a contract is enforceable is a legal
question, Westlake Petrochemicals, L.L.C. v. United Polychem, Inc., 688 F.3d
232, 238 (5th Cir. 2012), as is the interpretation of contract terms, In re Isbell
Records, Inc., 586 F.3d 334, 336 (5th Cir. 2009). 3
                                            III.
       We begin with the breach-of-contract claims arising out of the Supply
Contract. As noted, the jury found that IWS breached the Supply Contract in
two separate ways: (1) by terminating the contract on May 3, 2010, and (2) by
providing IDI with “access to the service.” On appeal, IWS argues that the
Supply Contract was unenforceable and, even if it was enforceable, that
Transverse breached first and that Transverse’s “access to the Service” claim
is untenable as a matter of law. IWS also insists that all damages awards must
be vacated. Transverse defends its judgment by arguing that the Supply
Contract was valid and enforceable, that the “access to the Service” claim
properly was submitted to the jury, and that the damages awards were proper.
                                             A.
       IWS first argues that the Supply Contract was unenforceable because it
lacked essential terms. As IWS points out, the Supply Contract uses the future
tense and expressly leaves open for future negotiation the specific
requirements for the customized billing software, including the “Controlling



       3 It is not entirely clear whether Texas or Iowa contract law governs the dispute, but
the parties agree that the laws of the two states are essentially identical. Both parties cite
cases from both states, as do we. See Stewart v. United States, 512 F.2d 269, 273 n.10 (5th
Cir. 1975) (“[N]o choice of law problem [is] present” where two states’ laws “are essentially
identical.”).

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                                 No. 13-51098
Specification” for the Service, the “acceptance criteria,” and the “Acceptance
Tests.” See T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex.
1992) (“Where an essential term is open for future negotiation, there is no
binding contract.”); see also Fort Worth Indep. Sch. Dist. v. City of Fort Worth,
22 S.W.3d 831, 846 (Tex. 2000) (“[W]hen an agreement leaves material matters
open for future adjustment and agreement that never occur, it is not binding
upon the parties and merely constitutes an agreement to agree.”). Because
these terms were left open for future negotiation, IWS argues that Transverse
was not under any obligation to perform until a second agreement was reached,
rendering the contract an unenforceable agreement to agree. IWS’s argument
has persuasive force.     Nevertheless, because IWS did not preserve the
argument in the district court, the argument fails.
      IWS did not argue that the contract was unenforceable until after the
jury returned its verdict, in a motion for judgment notwithstanding the verdict.
However, “Rule 50(b) of the Federal Rules of Civil Procedure precludes a
district court from entertaining a motion for judgment notwithstanding the
verdict unless the movant has first sought a directed verdict after presentation
of all the evidence [and before the jury verdict].” Bohrer v. Hanes Corp., 715
F.2d 213, 216 (5th Cir. 1983). Although IWS moved for a directed verdict at
the close of evidence, it did not argue in its motion that the Supply Contract
was unenforceable. To the contrary, IWS stated in its motion for directed
verdict that “it is undisputed that the parties entered into an express contract
by which IWS agreed to pay Transverse to provide access and use of the blee(p)
On Demand Service.” Accordingly, the issue is waived.
      In addition, IWS is judicially estopped from arguing that the contract
was unenforceable.    “Judicial estoppel prevents a party from asserting a
position in a legal proceeding that is contrary to a position previously taken in
the same or some earlier proceeding.” Hall v. GE Plastic Pac. PTE Ltd., 327
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                                 No. 13-51098
F.3d 391, 396 (5th Cir. 2003) (internal quotation marks omitted). In this
circuit, “two bases for judicial estoppel must be satisfied before a party can be
estopped. First, it must be shown that the position of the party to be estopped
is clearly inconsistent with its previous one; and second, that party must have
convinced the court to accept that previous position.” Id. (internal quotation
marks, citations, and alteration omitted). Both requirements are satisfied
here.    First, IWS argued that the Supply Contract was enforceable in its
counterclaim, its motion for partial summary judgment, its closing argument,
and its motion for directed verdict, among other places. It now argues the
opposite. Second, the district court accepted the argument that the contract
was enforceable. Thus, IWS is estopped from arguing otherwise here.
        We recognize that the format of the proceedings was somewhat unusual,
as the district court submitted questions about breach of contract to the jury
but reserved for itself the right to “either accept [the jury findings] or reject
them or I can take it as an advisory verdict and I can construe this as a matter
of law.” Because the district court suggested it would take up questions of law
after the jury verdict, IWS arguably had reason to wait until that time to raise
legal arguments about the enforceability of the contract. But even this excuse
falls short, as IWS included several other legal arguments in its motion for a
directed verdict. In the end, IWS cannot escape the fact that its answer,
counterclaim, motions, and closing argument all admitted or were premised on
the validity of the Supply Contract. IWS never raised the possibility that the
Supply Contract was unenforceable until after the jury returned an adverse
verdict.    Because IWS failed to argue that the Supply Contract was
unenforceable in its motion for directed verdict, and because IWS conceded the
enforceability of the Supply Contract throughout the district court proceedings,
this argument is waived and estopped.


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                                  No. 13-51098
                                       B.
      IWS argues that the jury incorrectly determined that it breached the
Supply Contract. IWS insists that Transverse materially breached the Supply
Contract before IWS terminated it, making IWS’s termination proper. As the
district court aptly noted in response to the same argument: “The jury rejected
[IWS’s] version of the story. . . . [E]ven if the evidence supporting liability is
thin or could weigh in favor of either party, it certainly is not so lacking as to
entitle [IWS] to judgment as a matter of law on Transverse’s claim for breach
of the Contract.”
      We recognize that this result allows Transverse to recover damages
despite never building a functional billing system, and it imposes liability on
IWS for seeking to terminate a business relationship that appeared to be on a
road to nowhere.     However, the jury determined that IWS breached the
contract, meaning that it likely accepted Transverse’s argument that IWS
“intentionally delayed agreeing to the UAT document until after 2/28 to
fabricate a breach.” Under this version of events, Transverse was excused from
performance by IWS’s breach. See Nitram, Inc. v. Cretan Life, 599 F.2d 1359,
1371 (5th Cir. 1979) (“It is a general principle of contract law that if one party
to a contract prevents or makes impossible performance by the other party, the
latter’s failure to perform will be excused and the offending party will not be
permitted to recover damages for nonperformance.”). Transverse presented
testimony and argument on this point, and the jury was free to accept the
version of events it found most credible. Accordingly, we affirm with respect
to IWS’s breach by termination.
                                       C.
      We now turn to Transverse’s claim that IWS breached the Supply
Contract by providing IDI with “access to the Service.” The Supply Contract
provides: “IWS shall not allow a competitor of Transverse access to the Service
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                                         No. 13-51098
except with Transverse’s prior written consent.” The question on appeal solely
relates to the contractual meaning of the term “the Service”—IWS argues that
“the Service” is the computerized blee(p) software, while Transverse claims
that “the Service” includes descriptions of blee(p)’s features and functions.
This question of contractual interpretation is dispositive because the facts
relevant to this claim are undisputed—IWS provided IDI with “access” to the
UAT document and meeting notes, but IWS never provided IDI with “access”
to any software built by Transverse. Thus, if IWS is correct that “the Service”
means the computerized blee(p) software, then the district court should not
have submitted the “access to the Service” claim to the jury, because no
evidence supports the conclusion that IWS provided IDI with access to the
blee(p) software. 4
           We agree with IWS. The Supply Contract unambiguously provides that
the term “the Service” means the computerized blee(p) software. Appendix E
to the Supply Contract, which is titled “Definitions,” states that the terms “The
Service” and “Service” refer to the “blee(p) on Demand Service,” not to written
descriptions thereof. Moreover, throughout the Supply Contract, the term “the
Service” is used in ways that only could refer to a computerized billing system.



       4 The district court submitted the following question to the jury: “Do you find from a
preponderance of the evidence that IWS failed to comply with the Contract by giving a
Transverse competitor access to the Service?” The district court did not instruct the jury on
the legal meaning of “access to the Service.” As a result, at closing argument, both Transverse
and IWS argued not about what was contained in the meeting notes, but rather whether the
content of those meeting notes met the contract’s definition of the “Service.” Counsel for
Transverse argued: “Now, the question is, What is the Service? Let’s see how the contract
defines ‘the Service.’ . . . [T]here’s a long definition in the contract of what the Service is, but
I want you to focus on 1.2 and also 1.2.1.” Counsel for IWS argued: “It’s software. It’s the
thing. It’s the subject matter of what this whole project was supposed to be about. . . . ‘The
Service shall include, but not limited to, the features and functions described in Appendix A,
blee(p) on demand service features.’ Let’s look at that.” Interpretation of an unambiguous
contract, however, is a legal question for the court. In re Isbell Records, Inc., 586 F.3d 334,
336 (5th Cir. 2009).

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                                      No. 13-51098
For example, the Contract refers to “[c]onfiguration of the Service to IWS
specifications,” “migration of IWS’s existing customer care and billing system
to the Service,” “[i]ntegration of the Service with other applications,” and the
manner in which “[t]he Service will operate.”              (Emphases added).        These
verbs—configure, migrate, integrate, and operate—“typically take as
grammatical objects” software or computer systems, not notes and documents. 5
Yates v. United States, 135 S. Ct. 1074, 1086 (2015) (plurality opinion) (defining
“tangible object” in a statute as an object used “to record or preserve
information” in part because the verbs used in the statute “typically take as
grammatical objects records, documents, or things used to record or preserve
information”); accord id. at 1089–90 (Alito, J., concurring in the judgment).
Because the Supply Contract is not ambiguous on this point, the district court
should not have allowed the jury to interpret the contract. See, e.g., Transcon.
Gas Pipeline Corp. v. Texaco, Inc., 35 S.W.3d 658, 665 (Tex. App.—Houston
[1st Dist.] 2000, pet. denied) (stating that a trial court errs when it does not
construe an unambiguous provision as a matter of law and instead submits the
issue to a fact-finder). Moreover, it is undisputed that IWS only provided IDI
with access to documents, not to any computerized billing system. Thus, as a
matter of law, IWS did not provide IDI with “access to the Service.”
Accordingly, we reverse the judgment of the district court with respect to the
“access to the service” claim.




       5 Transverse argues that the UAT and meeting notes are “the Service” because the
Supply Contract states that “[t]he Service shall [include] . . . the features and functions
described in [Appendix A].” We do not doubt that the Service includes the features and
functions that comprise it. However, the Service does not include written descriptions of
those features and functions, especially where those written descriptions do not contain the
source code for the blee(p) on demand service.

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                                  No. 13-51098
                                       D.
      The jury awarded $10 million in lost profits to Transverse for IWS’s
wrongful termination of the Supply Contract. The Supply Contract was a two-
year contract that automatically renewed for five additional two-year periods
unless one party provided written notice of cancellation; the $10 million lost
profits award is based on the assumption that neither party would have opted
to cancel the contract prior to the end of the twelve-year terms. On appeal,
IWS argues that this assumption is speculative and not supported by the
record. We agree that all damages beyond the initial two-year period are too
speculative to stand.
      A “party seeking to recover lost profits must prove the loss through
competent evidence with reasonable certainty.” Atlas Copco Tools, Inc. v. Air
Power Tool & Hoist, Inc., 131 S.W.3d 203, 206 (Tex. App.—Fort Worth 2004,
pet. denied); accord Szczepanik v. First S. Trust Co., 883 S.W.2d 648, 649 (Tex.
1994). “While some uncertainty as to the amount of damages is permissible,
uncertainty as to the fact of damages will defeat recovery.” Blase Indus. Corp.
v. Anorad Corp., 442 F.3d 235, 238 (5th Cir. 2006). “Lost profit damages may
not be based on evidence that is speculative, uncertain, contingent, or
hypothetical.” Id. In light of the strained business relationship between IWS
and Transverse, IWS’s expressed dissatisfaction with the state of the blee(p)
software, and IWS’s exhibited capability to secure a replacement billing system
from IDI, there was not sufficient evidence to make “reasonably certain” that
the contract with Transverse would have lasted beyond the initial two-year
term. See Atlas Copco Tools, 131 S.W.3d at 208 (“[C]onsidering the terms of
the agreement and the deterioration of the parties’ business relationship prior
to the suit, appellee and its expert could not have had a reasonable expectation
of continued sales of appellant’s products.”); see also Helena Chem. Co. v.


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                                  No. 13-51098
Wilkins, 47 S.W.3d 486, 504 (Tex. 2001) (“The loss amount must be shown by
competent evidence with reasonable certainty.”).
      Most illuminating on this point is the letter IWS sent to Transverse on
May 3, 2010, purporting to terminate the business relationship between IWS
and Transverse. That letter—which, of course, serves as the basis for the jury’s
finding of breach—clearly expresses IWS’s desire to terminate its business
relationship with Transverse. In the letter, IWS states that Transverse has
made “no material progress towards satisfaction of the Contract” and that
“there is still no discernable progress or demonstration that Transverse has
the capability to deliver to expected billing system.” The letter continues:
“[IWS] has no choice but to terminate the Contract and seek recovery of
amounts paid as well as damages for delay,” and “[IWS] has initiated
discussions with an alternative billing system provider.” In view of this letter,
no reasonable jury could conclude with reasonable certainty that the
contractual relationship between IWS and Transverse would have continued
for twelve years.
      Transverse raises several points in response to IWS’s argument, but
none of the points are persuasive. Transverse first argues that IWS waived its
argument that the May 3, 2010 letter constituted a cancellation notice by not
raising it in the district court in its Rule 50(a) motion for directed verdict. See
Arsement v. Spinnaker Exploration Co., 400 F.3d 238, 247 (5th Cir. 2005) (“If
a party fails to raise an issue in its Rule 50(a)(1) motions at trial, it may not do
so in its post-trial Rule 50(b) motion.”). However, IWS did argue in its Rule
50(a) motion that the damages awards should be vacated, so the legal
argument is preserved. We do not hold that the May 3, 2010 letter actually
was a cancellation notice; we hold only that it is evidence in support of IWS’s
preserved argument that the business relationship would not have continued
for twelve years. In any event, IWS relied on the May 3, 2010 letter in its Rule
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                                  No. 13-51098
50(b) motion, and Transverse did not argue waiver in its response to the Rule
50(b) motion. Accordingly, Transverse has forfeited its right to raise the waiver
issue on appeal. See id. (“An exception [to the Rule 50(a) waiver rule] occurs if
the nonmovant . . . fails to raise this forfeiture claim in opposition to the Rule
50(b) motion; this failure precludes raising the forfeiture claim on appeal.”).
      Next, Transverse points to its expert’s testimony about the nature of
contracts and billing systems in general, the gist of which is that billing
systems are major expenditures, increasing the “probability of long-term use
to recoup that investment.” Be that as it may, generalizations about common
business practices cannot overcome the specific evidence in this case with
regard to this contract for this billing system. See Atlas Copco Tools, 131
S.W.3d at 209 (“[The expert] testimony was based on speculation and
conjecture, and, at times, directly contradicted the evidence in this case. . . .
[A]ppellee failed to establish lost profits as a matter of law.”).
      Transverse’s final argument about the May 3, 2010 letter is that it
constituted a breach, and thus was not valid as a notice of cancellation. This
argument is beside the point.      The question is not whether IWS actually
cancelled the renewal periods, but rather whether IWS would have allowed the
contract to renew for five additional terms. The May 3 letter, even if not an
actual cancellation notice, is strong evidence that IWS wanted to terminate its
business relationship with Transverse, as is the fact that Transverse took
affirmative steps toward doing so, including initiating discussions with (and
later contracting with) IDI. In short, IWS attempted to terminate its business
relationship with Transverse, and although the jury determined that IWS was
not entitled to do so at that time because Transverse had not yet breached the
contract, IWS’s attempted termination and expressed dissatisfaction with
Transverse preclude a finding that it was reasonably certain that the business
relationship would have lasted twelve years. Accordingly, Transverse may
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                                         No. 13-51098
only recover lost profits for the initial two-year term. We leave it to the district
court on remand to determine how the lost profits for the two-year term should
be calculated, but we note that Transverse’s damages expert testified that
Transverse expected to lose money in the first two years of the contract.
Accordingly, simply dividing the $10 million award by six may not yield an
accurate measure of lost profits for those two years.
       In addition to the lost profits award, Transverse also was awarded $1.7
million in reliance damages. 6              However, at oral argument, counsel for
Transverse conceded that “[Transverse] couldn’t get the $10 million [lost
profits] and the $1.7 [million in reliance damages].” This is because reliance
damages are “an alternative theory of recovery—that is, [one] can ultimately
recover for its lost profits or its lost investment but not both.” Amigo Broad.,
LP v. Spanish Broad. Sys., Inc., 521 F.3d 472, 486 (5th Cir. 2008); see also
Restatement (Second) of Contracts § 349 (1981). Accordingly, Transverse may
not recover its lost profits and its reliance damages for the same breach.
       We vacate the $10 million award and remand for a determination of the
proper amount of lost profits and, if necessary, an election between lost profits
and reliance damages, consistent with this opinion.




       6 IWS argues that reliance damages are inappropriate because “Transverse admitted
it would have lost between $1.7 and $10 million during the initial two-year contract period.”
Even if that is true (and even if it is relevant to Transverse’s recovery on a lost profits theory),
Transverse did not incur its expenses in reliance on a two-year contract period, but rather on
a twelve-year contract period. Cf. Mistletoe Exp. Serv. of Oklahoma City, Okla. v. Locke, 762
S.W.2d 637, 638 (Tex. App.—Texarkana 1988, no writ) (“Where the contract requires a
capital investment by one of the parties in order to perform, that party’s reasonable
expectation of profit includes recouping the capital investment.”); see also Restatement
(Second) of Contracts § 349 cmt. a (1981) (“[T]he injured party may, if he chooses, ignore the
element of profit and recover as damages his expenditures in reliance. He may choose to do
this if he cannot prove his profit with reasonable certainty.”). As we have discussed,
Transverse cannot prove its lost profits over the course of the twelve-year term with
reasonable certainty. Accordingly, this is a quintessential case for reliance damages.

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                                 No. 13-51098
                                      IV.
      We now turn to Transverse’s claim that IWS breached the NDA’s
prohibition on disclosing “Confidential Information” by providing IDI with the
UAT and meeting notes. The underlying facts are not in dispute; the issue on
appeal is whether the UAT and meeting notes fall under the NDA’s definition
of “Confidential Information.” The district court ruled that, under the NDA,
information only is “Confidential Information” if it is identified or regarded by
a party as confidential. Because “Transverse did not regard the information
in the [UAT documents and meeting notes] as confidential or proprietary,” the
district court ruled that IWS did not breach the NDA. On appeal, Transverse
argues that the district court misinterpreted the NDA. Transverse argues that
the NDA sets forth two separate ways that information can be “Confidential
Information,” one of which (italicized below) does not require that Transverse
harbor or manifest a belief that the information in those documents was
confidential.
      Under ¶ 1 of the NDA, “Confidential Information” includes:
      all information of either party, not generally known to the public,
      whether of a technical, business or other nature . . . that is
      disclosed by one party (“Disclosing Party”) to the other (“Receiving
      Party”) or that is otherwise learned by Receiving Party in the
      course of its dealings with, or its physical or electronic access to
      the premises of, Disclosing Party, and that has been identified as
      confidential or that Disclosing Party regards as confidential.
      Confidential Information also includes all information concerning
      the existence and progress of the parties’ dealings and the identity
      of Transverse or Company vendors and strategic partners,
      regardless of whether any such information is marked or otherwise
      identified in writing as confidential.
(emphasis added).
      According to Transverse, the information in the UAT and meeting notes
was “Confidential Information” because it was “information concerning the
existence and progress of the parties’ dealings.”      We agree.     The NDA’s
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                                 No. 13-51098
definition of “Confidential Information” clearly sets out two alternative ways
that information can be “Confidential Information.”        First, information is
“confidential” if it is “not generally known to the public” and “has been
identified as confidential or that Disclosing Party regards as confidential.”
Second, “Confidential Information also includes all information concerning the
existence and progress of the parties’ dealings . . . regardless of whether any
such information is marked or otherwise identified in writing as confidential.”
(Emphasis added).      Under this second alternative, information about the
“existence and progress of the parties’ dealings” is “Confidential Information”
without regard to whether the information is marked as confidential.
      The district court’s factual findings establish that the UAT and the
meeting notes consisted of information “concerning the existence and progress
of the parties’ dealings”:
             The evidence establishes that the parties considered the
      billing-system project collaborative in nature, requiring both
      parties to generate and exchange significant amounts of
      information about their business processes to facilitate replication
      of the functionality of [IWS’s] existing system, including
      information included in all the UAT documents produced . . . .

            The evidence leads to a similar result with regard to the . . .
      meeting notes. Squires drafted the notes between May and July
      2009, during one or more meetings between Transverse and [IWS]
      in the summer of 2009 . . . .

      Applying the district court’s factual findings to the proper interpretation
of the NDA, we conclude that IWS breached the NDA by disclosing
“Confidential Information” to IDI. Because the district court found no breach,
it did not make any determination regarding damages.            Accordingly, we
reverse, render, and remand for the district court to evaluate the evidence and




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                                       No. 13-51098
testimony presented at trial and determine the appropriate amount of
damages to award, if any. 7
                                              V.
       The district court held that Transverse’s claims for misappropriation of
trade secrets, conversion, and violation of the Texas Theft Liability Act were
all “subsumed under the terms of the NDA.” Because the district court ruled
that IWS did not breach the NDA, it also ruled that IWS could not be liable in
tort for the same conduct. As we have explained, the district court erred in
concluding that IWS did not breach the NDA. Therefore, we vacate the district
court’s judgment with respect to the tort causes of action and remand them for
consideration consistent with this opinion. We express no opinion on whether
Transverse proved the elements of any of its tort causes of action.




       7   We have doubts about the reliability and sufficiency of evidence Transverse
presented at trial about the damages caused by the disclosure, but leave the damages
determination, if any, to the district court. See League of United Latin Am. Citizens #4552
(LULAC) v. Roscoe Indep. Sch. Dist., 123 F.3d 843, 846 (5th Cir. 1997) (“‘The credibility
determination of witnesses, including experts, is peculiarly within the province of the district
court.’” (quoting Orduna S.A. v. Zen–Noh Grain Corp., 913 F.2d 1149, 1154 (5th Cir. 1990))).
Christopher Martinez, Transverse’s damages expert, began from the premise that
Transverse was worth $72.4 million prior to the disclosure. The $72.4 million value was
derived rather unscientifically—it was derived by surveying Transverse employees about
how much money they thought Transverse would have made between 2010 and 2015 if the
Transverse/IWS relationship had gone off without a hitch. Martinez then determined that
half of that value (i.e., $37.2 million) was attributable to blee(p)—even though blee(p) never
was a functioning product. He made this determination based on the intangible-asset to
tangible-asset ratios of 191 technology companies that had been acquired by “big public
companies”—even though Transverse had not been acquired by a “big public company.”
Martinez then calculated that the disclosure deprived blee(p) of half its value, based on
testimony from Transverse’s COO that between 50 and 90 percent of blee(p) was disclosed to
IDI in the UAT and meeting notes—even though the testimony was that 50 to 90 percent of
blee(p)’s features were described in the UAT and meeting notes (not that 50 to 90 percent of
the source code was disclosed). In addition, Transverse abandoned its blee(p) software for
reasons entirely independent of the prohibited disclosure: Transverse concedes that its
decision to stop marketing blee(p) “had nothing to do with IWS’s wrongful disclosure of
Tranverse’s information.”

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                                       No. 13-51098
                                             VI.
       To sum up, the district court correctly entered judgment against IWS on
Transverse’s claim that IWS breached the Supply Contract by terminating it.
However, the district court erred by permitting Transverse to recover lost
profits for a twelve-year period for this breach. The district court also erred by
submitting the “access to the Service” claim to the jury when it should have
awarded judgment to IWS. In addition, the district court should have awarded
judgment to Transverse on Transverse’s claim that IWS breached the NDA.
       On remand, the issues remaining to be resolved are the proper amount
and type of damages that Transverse may collect on its breach-by-termination
claim; the amount of damages, if any, that Transverse may collect for IWS’s
breach of the NDA; and whether IWS is liable under any of the tort theories
pressed by Transverse.
       We AFFIRM in part, REVERSE and RENDER in part, VACATE in part,
and REMAND for further proceedings consistent with this opinion. 8




       8  Because we remand the case, we decline to address the parties’ arguments regarding
attorney’s fees. On remand, the district court may consider the attorney’s fees for both
parties upon timely filed motions. See, e.g., Sanchez v. City of Austin, 774 F.3d 873, 885 (5th
Cir. 2014) (“[W]e remand this case to the district court with directions to award attorneys’
fees, in the first instance . . . .”).
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