Louisiana Newpack v. Longhai Desheng ( 2023 )

Case: 22-30653 Document: 00516862177 Page: 1 Date Filed: 08/17/2023
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
____________ FILED
August 17, 2023
No. 22-30653 Lyle W. Cayce
____________ Clerk
Louisiana Newpack Shrimp Company, Incorporated,
Plaintiff—Appellee,
versus
Indigo Seafood Partners, Incorporated,
Defendant,
______________________________
Longhai Desheng Seafood Stuff Company, Ltd.,
Plaintiff—Appellant,
versus
Louisiana Newpack Shrimp Company, Incorporated,
Defendant—Appellee.
______________________________
Appeal from the United States District Court
for the Eastern District of Louisiana
USDC Nos. 2:19-CV-12948, 2:20-CV-782
______________________________
Before Jones, Clement, and Haynes, Circuit Judges.
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Per Curiam: *
Longhai Desheng Seafood Stuff Company, Ltd. (“Longhai”) appeals
the district court’s amended final judgment in favor of Louisiana Newpack
Shrimp Company, Inc. (“Louisiana Newpack”). For the reasons set forth
below, we REVERSE.
I. Background
Louisiana Newpack, Ocean Feast Company, Ltd. (“Ocean Feast”),
and Indigo Seafood Partners, Inc. entered into a joint venture to procure, im-
port, and sell seafood products from manufacturers located around the world.
Louisiana Newpack was the financier for this joint venture. The joint venture
placed eleven orders for crabmeat with Longhai, a crabmeat processor and
exporter. While Louisiana Newpack paid for the first eight orders, Longhai
initially did not receive payment for the final three orders. Louisiana New-
pack took possession and eventually disposed of these three orders. Longhai
sent a demand for payment to Louisiana Newpack, which, in turn, made par-
tial payments. Ultimately though, $998,188.03 remained outstanding for the
three orders.
Longhai sued Louisiana Newpack, claiming (1) it contracted with
Louisiana Newpack and its founder, and they breached that contract by not
paying the outstanding $998,188.03 balance, and, alternatively, (2) Louisiana
Newpack and its founder had failed to pay Longhai based on an open account
between the parties. The district court consolidated this case with several
related cases.
The case proceeded to trial, during which Louisiana Newpack orally
moved for judgment as a matter of law under Federal Rule of Civil Procedure
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*
This opinion is not designated for publication. See 5th Cir. R. 47.5.
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50 on Longhai’s open account claim. The court denied this motion and
permitted the jury to consider the merits of the open account claim even if it
found that no contract existed between the parties. The court also provided
the jury with separate instructions as to the definitions of both a “contract”
and an “open account.”
The jury found that Longhai failed to demonstrate it had a contract
with Louisiana Newpack. However, the jury separately found, in line with
its open account instructions, that (1) Longhai proved it had an open account
with Louisiana Newpack, (2) Longhai sent a written demand for the amount
owed, (3) Louisiana Newpack failed to pay the open account within thirty
days, and (4) Louisiana Newpack owed Longhai $998,188.03 based on this
open account. 1 The district court entered judgment consistent with these
findings.
Louisiana Newpack then moved to amend the judgment and for a new
trial under Federal Rule of Civil Procedure 59. The district court granted the
motion in part and entered an amended judgment in favor of Louisiana
Newpack, dismissing all of Longhai’s claims. It reasoned Longhai could not
recover on its open account claim because the jury found that there was no
contract between the parties, and that its previous determination to the
contrary constituted a manifest error of law. Longhai timely appealed.
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1
The jury further determined that Longhai did not have “unclean hands,” but that
its recovery should nonetheless be reduced by $665,458.69 because of its own fault or
conduct. Finally, the jury concluded that “Ocean Feast [wa]s liable for any debt owed to
Longhai,” which amounted to $332,729.34.
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II. Jurisdiction & Standard of Review
The district court had diversity jurisdiction over this case under 28
U.S.C. § 1332(a). We, in turn, have jurisdiction over this appeal pursuant to
28 U.S.C. § 1291. “In general, a grant or denial of a Rule 59(e) motion is
reviewed for abuse of discretion.” Fletcher v. Apfel, 210 F.3d 510, 512 (5th
Cir. 2000). However, where an appeal involves “[i]ssues that are purely
questions of law,” we review de novo. Tyler v. Union Oil Co. of Cal., 304 F.3d
379, 405 (5th Cir. 2002).
Further, the standard for amending a judgment is very high. See
Templet v. HydroChem Inc., 367 F.3d 473, 479 (5th Cir. 2004). Indeed, this
standard “favor[s] the denial of motions to alter or amend a judgment.” S.
Constructors Grp., Inc. v. Dynalectric Co., 2 F.3d 606, 611 (5th Cir. 1993).
Accordingly, to warrant the extreme remedy of an alteration of a judgment, a
Rule 59(e) motion “must clearly establish . . . a manifest error of law or fact.”
Rosenzweig v. Azurix Corp., 332 F.3d 854, 863 (5th Cir. 2003) (quotation
omitted).
III. Discussion
It is important to consider the jury’s instructions in this context.
“The jury system is premised on the idea that rationality and careful regard
for the court’s instructions will confine and exclude jurors’ raw emotions.”
CSX Transp., Inc. v. Hensley, 556 U.S. 838, 841 (2009). As the Supreme
Court has made clear, “juries are presumed to follow the court’s
instructions.” Id.Relevant to this appeal, the district court provided two sets of jury
instructions: one with respect to contracts, and one with respect to open
accounts. Per these instructions, the jury separately considered Longhai’s
breach of contract and open account claims. That is, the jury independently
assessed whether Louisiana Newpack was obliged to perform under a
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contract with Longhai, as well as whether the business transactions between
Louisiana Newpack and Longhai gave rise to an open account. Put
differently, the district court’s instructions provided definitions of what
would constitute a contract and open account sufficient for the purposes of
Longhai’s claims.
The jury, applying the district court’s contract-related instructions,
ultimately concluded that Longhai had failed to prove that it entered a
contract with Louisiana Newpack. However, the jury, applying the entirely
different set of open account-related instructions, concluded that Longhai
had shown that it and Louisiana Newpack had an open account. Because we
can presume that a jury follows a district court’s instructions, see id., we can
presume here that the jury followed the different sets of instructions it was
given and concluded that, while Longhai and Louisiana Newpack didn’t have
a contract that fit the court-provided definition of a formal contract, there
was sufficient evidence to support a contractual relationship in the form of an
open account.
With that being the case, we turn to the relevant statutory provisions
and case law. Under Louisiana’s open account statute, “[w]hen any person
fails to pay an open account within thirty days after the claimant sends
written demand therefor correctly setting forth the amount owed,” the
claimant can recover “collection of such claim when judgment on the claim
is rendered in [his] favor.” La. Rev. Stat. § 9:2781(A). The statute also
provides that an “‘open account’ includes any account for which a part or all
of the balance is past due, whether or not the account reflects one or more
transactions and whether or not at the time of contracting the parties
expected future transactions.” Id. § 9:2781(D).
Courts are split as to whether a party must demonstrate the existence
of a contract to recover on an open account claim. As the district court
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correctly observed, some state and federal court cases discuss open accounts
in the context of contracts and suggest that a contract, or a contractual
relationship, is a necessary prerequisite for an open account claim. See, e.g.,
A Better Place, Inc. v. Giani Inv. Co., 445 So. 2d 728, 733 (La. 1984); Kelso v.
Butler, 899 F.3d 420, 422–23, 426 (5th Cir. 2018). However, in contrast,
different state and federal cases expressly distinguish between open account
claims and typical contract claims. See, e.g., Cambridge Toxicology Grp., Inc.
v. Exnicios, 495 F.3d 169, 174 (5th Cir. 2007); Signlite, Inc. v. Northshore Serv.
Ctr., Inc., 959 So. 2d 904, 907 (La. Ct. App. 2007); Olinde v. Couvillion, 650
So. 2d 1241, 1242 (La. Ct. App. 1995). Indeed, a number of Louisiana courts
have determined that open account claims can remain viable even where
there is no typical contract between the parties. See, e.g., Acadian Servs., Inc.
v. Durand, 813 So. 2d 1142, 1143–44 (La. Ct. App. 2002); Hayes v. Taylor, 812
So. 2d 874, 878 (La. Ct. App. 2002); Sandoz v. Dolphin Servs., Inc., 555 So.
2d 996, 997–98 (La. Ct. App. 1989).
The district court concluded that its initial determination (that the
jury should be able to consider the open account claim irrespective of its
finding on the contract claim) was a manifest error of law that justified
amending the original judgment. However, the abovementioned conflicting
case law and the relevant statutory provisions indicate that it was not a
manifest error of law to allow Longhai to recover on its open account claim.
That is, while various cases speak to the contractual relationship requirement
for open accounts, numerous courts have distinguished between open
account claims and contract claims and allowed plaintiffs to recover on open
account claims despite the absence of a formal contract. Moreover,
considering the distinct sets of instructions it received, the jury’s finding that
no contract existed between Louisiana Newpack and Longhai did not preclude
it from finding a contractual relationship in support of its separate finding that
the parties had an open account.
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Therefore, because the district court concluded otherwise, we
REVERSE and RENDER by reinstating the original judgment. 2
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2
Longhai separately raises a sufficiency of the evidence challenge to the jury’s
finding that no contract existed between the parties. See Ham Marine, Inc. v. Dresser Indus.,
Inc., 72 F.3d 454, 459 (5th Cir. 1995) (per curiam). Under our “well-settled” approach to
such challenges, “[u]nless the evidence” upon which the jury bases its finding “is of such
quality and weight that reasonable and impartial jurors could not arrive at such a verdict, the
findings of the jury must be upheld.” Id. (emphasis added). While Longhai points to
various pieces of evidence in support of its argument that Louisiana Newpack was bound
by a contract, it concedes that it never entered into a formal contract with Louisiana
Newpack. Likewise, there were “numerous plausible grounds on which [the jury] could
have concluded that [Longhai] failed to” demonstrate the existence of that contract,
including, for example, discrediting certain testimony. King v. Univ. Healthcare Sys., L.C.,
645 F.3d 713, 722 (5th Cir. 2011). Therefore, we conclude we must uphold the jury’s
finding that no contract existed between the parties. See Ham Marine, Inc., 72 F.3d at 459.
7