     Case: 16-20275      Document: 00514185215         Page: 1    Date Filed: 10/05/2017




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

                                      No. 16-20275                                FILED
                                                                            October 5, 2017
                                                                             Lyle W. Cayce
                                                                                  Clerk
JINSUN, L.L.C.,

              Plaintiff - Appellant

v.

ALIDAD MIRESKANDARI,

              Defendant - Appellee




                   Appeal from the United States District Court
                        for the Southern District of Texas
                             USDC No. 4:13-CV-1238


Before DAVIS, CLEMENT, and PRADO, Circuit Judges.
PER CURIAM:*
       Plaintiff-Appellant Jinsun, L.L.C. appeals the district court’s judgment
in favor of Jinsun and against Defendant-Appellee Alidad Mireskandari
(“Alidad”) following a jury verdict on the ground that the district court erred
by awarding the lower of two damages amounts found by the jury. For the
reasons set forth below, we affirm.



       * 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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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      Jinsun owns shares of Luxeyard, an e-commerce company founded and
chaired by Amir Mireskandari, Alidad’s brother. In early 2012, Amir asked
Jinsun to sell some of its Luxeyard shares to Alidad. Jinsun agreed to the sale
and entered into an oral stock purchase agreement with Alidad (“the stock
agreement”) in April 2012. The stock agreement provided that Jinsun would
sell 430,000 shares of Luxeyard stock to Alidad for $56,000. Alidad received
the shares from Jinsun and subsequently sold them to another party for a total
of $556,200, but he never paid Jinsun for the shares.
      Jinsun brought this suit in Texas state court against Alidad asserting
breach of contract (among other claims) and seeking money damages. Alidad
removed the action under diversity jurisdiction, 1 and Jinsun’s breach of
contract claims eventually proceeded to a five-day jury trial commencing on
September 28, 2015. In addition to asking the jury whether the parties had
entered into the stock purchase agreement and whether Alidad had breached
it, the district court submitted two damages questions relating to the
agreement. The first asked the jury to find “[t]he difference between the
purchase price and the amount, if any, that Alidad paid.” The second asked the
jury to find “[t]he difference between the value of the shares Alidad received
and the amount, if any, that Alidad paid.”
      After finding that the parties had entered into the stock agreement and
that Alidad had breached it, the jury answered these damages questions with
$56,000 and $556,200, respectively. After the jury returned its verdict, the
district court ordered Jinsun to make an election. Unsurprisingly, Jinsun
elected for the larger sum. However, the district court’s final judgment limited




      1   28 U.S.C. §§ 1332 and 1446.
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Jinsun’s damages on the stock agreement to the smaller sum—$56,000—
without further explanation.
       Jinsun timely appealed the district court’s damages award, arguing that
it was entitled to the larger award. 2 Jinsun argues that in awarding the lower
damages award, the district court focused only on one type of breach of contract
remedy but ignored the other two. Jinsun points to non-binding Texas
authority explaining:
       American law has traditionally recognized three damage measures
       for breach of contract: expectancy, reliance, and restitution.
       Expectancy damages award the benefit of a plaintiff's bargain;
       reliance damages compensate for the plaintiff's out-of-pocket
       expenditures; restitution damages restore what the plaintiff has
       conferred on the defendant. 3
Essentially, Jinsun claims that the lower award of $56,000 represented the
expectancy damages, while the higher award of $556,200 represented either
its restitution or reliance damages. (Because Jinsun had no out-of-pocket
expenditures here, we fail to see how Jinsun could be entitled to reliance
damages at all.) Jinsun argues the higher award is permissible because the
smaller expectancy damages do not fully compensate Jinsun for its losses on
the stock agreement. Jinsun claims that it only agreed to sell Alidad the shares
at a price far below market price because, as part of the stock agreement,
Alidad also agreed to somehow bring value to Luxeyard, 4 which would inure to
Jinsun’s benefit because Jinsun continued to retain a significant stake in the
company. Accordingly, Jinsun argues that the $56,000 award does not even
come close to compensating Jinsun for its losses under the stock agreement



       2 We have appellate jurisdiction under 28 U.S.C. § 1291.
       3 Quigley v. Bennett, 227 S.W.3d 51, 56 (Tex. 2007) (Brister, J., concurring in part and
dissenting in part) (footnotes omitted).
       4 Alidad apparently had ties to Wall Street investment banks, and Amir told Jinsun

that Alidad could draw on these ties to help raise capital for Luxeyard.
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because it not only expected to receive Alidad’s payment for the shares but also
Alidad’s efforts to aid Luxeyard and, by extension, Jinsun.
      In response, Alidad argues that, under Texas law, damages for breach of
a simple purchase/sale agreement, such as the stock agreement, are capped at
the expectation damages, which is the $56,000 price agreed upon in the stock
agreement that Jinsun expected to receive. 5 We agree. In Quigley’s summary
of Texas breach of contract remedies quoted above, Judge Brister cited to
Murray v. Crest Constr., Inc., 900 S.W.2d 342, 345 (Tex. 1995), for the
proposition that restitution damages, or quantum meruit recovery, “provides
[the] ‘amount of benefits conferred’ on [the] defendant.” Quigley, 227 S.W.3d at
56 n.4. Murray explains that quantum meruit typically is not available when
there is an express contract:
      Generally, a party may not recover under quantum meruit when
      there is an express contract covering the services or materials
      furnished. Truly v. Austin, 744 S.W.2d 934, 936 (Tex. 1988).
      Construction contracts are an exception to this rule. It is
      undisputed that Murray has failed to substantially perform the
      Borden and Cooper jobs, a condition precedent to recovery under
      the express contract. See Dobbins v. Redden, 785 S.W.2d 377, 378
      (Tex. 1990). Even though Murray may not recover under the
      express contract, Murray may bring an action in quantum meruit
      to recover the amount of benefits conferred by its partial
      performance on to Crest. Id. Additionally, because we find that
      Murray was entitled to recovery based on quantum meruit, the
      trial court's exclusion of unexecuted written contracts offered by
      Crest to prove the terms of the Borden and Cooper contracts was
      not harmful. See Tex. R. App. P. 81(b)(1). 6




      5  Alidad also raises other arguments, which we decline to address. For instance,
Alidad appears to challenge the factual finding undergirding the jury’s larger sum award,
but that argument is moot because we conclude that Jinsun is entitled only to the lower
award, the agreed-upon price in the stock agreement.
       6 900 S.W.2d at 345.

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      Here, the jury found that there was an express contract, the stock
agreement, so under Texas law, Jinsun may not recover anything beyond its
expectancy damages unless Jinsun shows that the stock agreement is an
exception to the general rule. Jinsun has failed to do so. Here, Jinsun expected
to receive $56,000 from Alidad in exchange for the block of Luxeyard stock.
Whether the stock price went up or down following the stock transfer, Jinsun
was entitled to receive $56,000 from Alidad—no more and no less. Its
expectancy damages under the plain terms of the express contract are
therefore $56,000—no more and no less.
      As to Jinsun’s argument that Alidad owed other obligations under the
agreement, they are immaterial here. For one thing, Alidad’s supposed
obligations to increase the price of Luxeyard stock concern what would happen
to the price of the Luxeyard stock that Jinsun retained, not the stock that
Jinsun sold to Alidad. Assuming arguendo that Alidad did breach those
obligations, Jinsun would have to prove those damages based on the value of
the stock it retained, not the value of the stock it sold to Alidad for an agreed-
upon price of $56,000. Once it sold that block of stock to Alidad, any gains and
losses would go to Alidad, not Jinsun.
      Indeed, Alidad argues that Jinsun is conflating the parties’ two
agreements and the damages owed under each. He notes that he and Jinsun
entered into a second agreement for consulting (“the consulting agreement”) in
June 2012, under which Alidad agreed to raise funds for Luxeyard and Jinsun
agreed to pay him a 10% commission on funds raised up to $5 million and to
pay him a $150,000 commission advance. In addition to its findings on the
stock agreement, the jury also found that Alidad had breached the consulting
agreement and awarded $150,000 in damages for the commission advance
Jinsun paid Alidad. Alidad contends that any promise he made to raise funds
for Luxeyard was solely part of the consulting agreement and, accordingly,
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damages for failure to perform this fundraising cannot be included in the
damages for breach of the stock agreement.
      We agree. As to the stock sale, Jinsun and Alidad entered into an express
agreement under which Jinsun would sell the block of Luxeyard stock to Alidad
for $56,000. The jury found that the stock agreement was valid and that Alidad
had failed to pay. Therefore Jinsun is entitled to receive exactly what it was
entitled to under the express contract: the $56,000 sale price. Jinsun is not
entitled to restitution or reliance damages under the express contract.
      Accordingly, the district court’s final judgment is AFFIRMED.




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