     Case: 16-20291      Document: 00514044285         Page: 1    Date Filed: 06/22/2017




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

                                                                                    FILED
                                                                                 June 22, 2017
                                      No. 16-20291
                                                                                 Lyle W. Cayce
                                                                                      Clerk
NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH,
PENNSYLVANIA, as Subrogee of Transmontaigne Product Services,
Incorporated,

               Plaintiff - Appellant

v.

EXXONMOBIL GAS & POWER MARKETING COMPANY, a Division of
Exxon Mobil Corporation,

               Defendant - Appellee




                   Appeal from the United States District Court
                        for the Southern District of Texas
                             USDC No. 4:15-CV-3315


Before SMITH, PRADO, and GRAVES, Circuit Judges.
PER CURIAM:*
       National Union Fire Insurance Company of Pittsburgh PA (“National
Union”) appeals the district court’s dismissal without prejudice of its claim
against ExxonMobil Gas & Power Marketing Company (“ExxonMobil”).
Because National Union did not plead for damages in a form recoverable under


       * 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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. 16-20291
the Propane Sales Agreement (“Agreement”) entered into by its subrogor,
TransMontaigne Product Services, Inc. (“TransMontaigne”), we AFFIRM the
district court’s judgment.
                                      I.
      TransMontaigne has an exclusive lease on the Ella-Brownsville Pipeline,
which it uses to supply liquefied petroleum gas, also known as propane or
butane, to its customer Nieto Trading B.V. (“Nieto”). On November 1, 2012,
TransMontaigne and ExxonMobil entered into the Agreement, according to
which ExxonMobil would sell, and TransMontaigne would purchase, all
propane produced at ExxonMobil’s King Ranch Gas Plant. When the King
Ranch was damaged due to fire on November 13, 2013, ExxonMobil asserted
that it was no longer required to perform under the Agreement due to a “Force
Majeure” event.
      As subrogee of TransMontaigne, National Union sued ExxonMobil,
claiming breach of the Agreement due to non-performance. In its complaint,
National Union described its theory of damages as “the market price / contract
price formula under Tex. Bus. & Comm. [sic] Code § 2.173; i.e. the difference
between the market price at the time when the buyer learned of the breach
and the contract price, but less expenses saved in consequence of the seller’s
breach.” But it also stated that “the damages sustained by TransMontaigne
was $1,129,316, calculated from the lost revenue of the difference in market
price to Nieto Trading B.V. from the contract price from ExxonMobil.”
      On March 7, 2016, ExxonMobil moved to dismiss National Union’s claim
on grounds that National Union pleaded for damages in the form of lost profits,
which are expressly non-recoverable under the Agreement. On April 13, 2016,
the district court dismissed National Union’s claim without prejudice;
however, it did not issue a reasoned opinion explaining the dismissal. National
Union appeals from the district court’s dismissal.
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                                  No. 16-20291


                                       II.
      We “apply a less stringent standard of review to a District Court’s
dismissal of a suit without prejudice, because the plaintiff would be able to file
his suit again.” Boazman v. Econs. Lab., Inc., 537 F.2d 210, 212-13 (5th Cir.
1976). In addition, in this diversity action we “apply state substantive and
federal procedural law.” Gasperini v. Center for Humanities, Inc., 518 U.S. 415,
427 (1996).
      National Union contends that it did not plead for “lost profits,” which it
acknowledges would be non-recoverable; therefore, its claim should have been
allowed to proceed. This argument is unpersuasive. Under Texas law, “[l]ost
profits are damages for the loss of net income to a business measured by
reasonable certainty.” Miga v. Jensen, 96 S.W.3d 207, 213 (Tex. 2002). Here,
National Union’s complaint states that the damages TransMontaigne
sustained are “$1,129,316, calculated from the lost revenue of the difference in
market price to Nieto Trading B.V. from the contract price from ExxonMobil.”
This language highlights the fatal flaw in its argument: The difference in the
amount that TransMontaigne would have received from Nieto minus the
amount it would have paid ExxonMobil describes TransMontaigne’s “loss of
net income,” which, in turn, is “lost profits” under Texas law. Id. Lost profits
are non-recoverable under the Agreement. National Union’s claim was
correctly dismissed.
      In the alternative, National Union contends that “a limitation precluding
recovery of . . . lost profits would be unenforceable pursuant to Tex. Bus. &
Comm. [sic] Code § 2.719(b).” It also contends that “a limitation of recovery of
direct lost profits conflicts with other provisions of the [Agreement], and as
such creates an ambiguity precluding dismissal . . . .” Neither argument is
persuasive. Tex. Bus. & Com. Code § 2.719(b) only applies when “the remedy
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is expressly agreed to be exclusive, in which case it is the sole remedy.” §
2.719(a)(2). Here, the parties did not agree to an exclusive remedy. Id. In
addition, the Agreement is not ambiguous regarding whether lost profits are
recoverable. It clearly states that they are not.
      AFFIRMED.




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