Blessey Marine Services, Inc. v. Jeffboat, L.L.C.

Case: 13-30731 Document: 00512831580 Page: 1 Date Filed: 11/10/2014
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 13-30731 United States Court of Appeals
Fifth Circuit
FILED
November 10, 2014
Lyle W. Cayce
BLESSEY MARINE SERVICES, INCORPORATED, Clerk
Plaintiff - Appellant
v.
JEFFBOAT, L.L.C.,
Defendant - Appellee
Appeals from the United States District Court
for the Eastern District of Louisiana
Before STEWART, Chief Judge, and WIENER and COSTA, Circuit Judges.
WIENER, Circuit Judge:
A district court jury granted the breach of warranty claim of Plaintiff-
Appellant Blessey Marine Services, Inc. (“Blessey”), but denied its breach of
contract claim. Blessey now appeals the district court’s denial of two motions:
one for partial summary judgment and the other in limine. Blessey’s primary
claim on appeal is that the district court should have entered judgment as a
matter of law against Defendant-Appellee Jeffboat, L.L.C. (“Jeffboat”), once
the court found the disputed portion of the contract ambiguous. Blessey also
urges that the district court erred by admitting parol and extrinsic evidence.
We do not reach the merits of either contention because we conclude that (1)
we lack jurisdiction to review the district court’s denial of Blessey’s motion for
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partial summary judgment, and (2) Blessey waived its right to challenge the
district court’s admission of extrinsic evidence.
I.
FACTS AND PROCEEDINGS
A. Background
Over the course of their twenty-year business relationship, Jeffboat, an
inland boat and barge builder located in Indiana, sold more than fifty barges
to Blessey, a provider of transport services for goods through inland
waterways. In April 2009, Blessey and Jeffboat entered into a contract in
which Jeffboat agreed to build a barge for Blessey at a base unit price of
$3,325,000 (“Original Contract”). This price was calculated on the assumption
that Jeffboat would procure the steel to build the barge at an average cost of
$800 per ton, but the price of the barge was subject to some adjustments.
Significant to this case, Article III of the Original Contract specified that the
adjusted unit price would depend on the “actual average cost per ton . . . for all
steel plate and structural steel used in the construction of the barge to be
escalated/de-escalated,” but in no event would the cost per ton exceed $800 for
purposes of calculating the ultimate price.
Jeffboat and Blessey subsequently negotiated for additional barges. In
July 2009, they executed a “First Amendment” to the Original Contract, which
stated, in relevant part:
Article III is amended in part to add the additional
terms and conditions as follows . . . . [t]he Base Unit
Contract Price for each Hot Oil Vessel and the Clean
Service Vessel may be adjusted by reason of: 1. The
increase or decrease resulting from alterations
pursuant to Article V of the Contract, 2. The increase
or decrease resulting from changes in taxes pursuant
to Article VI of the Contract.
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That amendment also stated that “[e]xcept for the steel escalation as provided
in Article III of the Contract, the terms and conditions of the Contract shall
apply to the Hot Oil Vessels and Clean Service Vessel of this Amendment.”
Jeffboat maintains that, by virtue of the parties’ execution of the
Amendment, Blessey elected to purchase additional barges at a “fixed” price of
$525 per ton for steel, rather than the “market” price contemplated in the
Original Contract. Blessey read the terms differently and sued Jeffboat for
breach of contract, insisting that the invoice for the barges did not reflect the
de-escalation of the price of steel. (Blessey later added a breach of warranty
claim on the grounds that two of the delivered vessels were not fit for their
intended use.)
B. District court proceedings
Both parties moved for summary judgment on whether the “steel
escalation” comprehended in the Amendment applied to the prices of the five
barges that Jeffboat sold to Blessey thereunder. Jeffboat took the position that
the Amendment unambiguously excluded the steel de-escalation provision.
Blessey too maintained that the Amendment was unambiguous, but insisted
that it was the steel escalation provision in the Original Contract that was
explicitly excluded by the Amendment. Blessey argued alternatively that if
the district court were to find the Amendment ambiguous, it would have to
enter judgment against Jeffboat because Indiana law requires that any
ambiguity be construed against the drafter. The district court denied both
parties’ motions for summary judgment, and ruled that “[t]he amended
contract’s terms are sufficiently ambiguous as to preclude summary judgment
for either side, even when considered in light of the extrinsic evidence the
parties have presented.”
The parties submitted a joint pretrial order that identified contested
questions of law, including whether Indiana law compels the entry of judgment
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against the drafter of an ambiguous contract. Blessey also filed a motion in
limine, in which it asked the court to exclude parol and extrinsic evidence of
the parties’ intent, arguing that Indiana law bars such evidence when the
contract includes an integration clause. The district court disagreed with
Blessey’s characterization of Indiana law, concluding that the cases Blessey
cited actually compel admitting the evidence, not excluding it. Noting that it
had already determined in its summary judgment order that the Amendment
was ambiguous, the district court likewise denied Blessey’s motion in limine
on the grounds that “[r]esolution of the ambiguity will require the jury to hear
and weigh relevant extrinsic evidence.”
Following a three day trial, the jury rejected Blessey’s breach of contract
claim, but found in favor of Blessey on its breach of warranty claim. Blessey
does not appeal any aspect of the jury’s verdict; rather, its sole challenge is to
the district court’s denial of its motions for partial summary judgment and in
limine.
II.
ANALYSIS
A. Denial of summary judgment motion
Before reaching the merits of Blessey’s appeal, we consider whether we
have jurisdiction to review the district court’s denial of Blessey’s motion for
partial summary judgment. The general rule in this Circuit is that “an
interlocutory order denying summary judgment is not to be reviewed when
final judgment adverse to the movant is rendered on the basis of a full trial on
the merits.” 1 We recognized a narrow exception to this rule in Becker v.
Tidewater, Inc., holding that if the appellant seeks review of “the district
1 Black v. J.I. Case Co., 22 F.3d 568, 570 (5th Cir. 1994).
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court’s legal conclusions in denying summary judgment, and the case was a
bench trial,” we have jurisdiction to review the denial of summary judgment. 2
Blessey seeks our review of the district court’s disposition of a question
of law, but its appeal does not fit the Becker exception because the district court
conducted a jury trial. Although we acknowledge that other circuits will review
purely legal issues decided on summary judgment without considering the kind
of trial conducted, we are bound by Becker. 3
Neither are we persuaded by the two other theories advanced by Blessey
in support of appellate jurisdiction: (1) It is appealing the district court’s
“repeated misinterpretation” of Indiana law, rather than simply the denial of
summary judgment; and, (2) we should excuse its failure to make a Rule 50
motion because the district court denied Jeffboat’s Rule 50 motion. First,
although the district court might have consistently rejected Blessey’s position
that Indiana law requires entry of judgment against the known drafter of an
ambiguous contract in its pretrial and trial orders, Blessey only seeks our
review of that court’s denial of its motions for summary judgment and in
limine. Second, Blessey’s contention that we should excuse its failure to make
a Rule 50 motion fares no better. Part of our reasoning in Becker was that we
have jurisdiction over a denial of summary judgment on a purely legal issue,
but only when the district court conducted a bench trial, in part “because Rule
2 586 F.3d 358, 365 n.4 (5th Cir. 2009) (emphasis supplied); see also May v. Miss. Dep’t
of Corr., 531 F. App’x 464, 468 (5th Cir. 2013) (per curiam) (“Underlying our approach in
Becker was our recognition that, because motions for judgment as a matter of law are not
required to be made following a bench trial, it is appropriate to review the court’s denial of
summary judgment in this context.” (emphasis supplied) (internal quotation marks and
citation omitted)).
3 United States v. Short, 181 F.3d 620, 624 (5th Cir. 1999) (“[We] are bound by the
precedent of previous panels absent an intervening Supreme Court case explicitly or
implicitly overruling that prior precedent . . . .”).
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50 motions for judgment as a matter of law are not required following a bench
trial.” 4 The inverse of this principle suggests that we would have jurisdiction
to hear an appeal of the district court’s legal conclusions following a jury trial,
but only if the party restated its objection in a Rule 50 motion. 5 In this case,
however, Blessey did not make a Rule 50 motion for judgment as a matter of
law on the issue it now seeks to appeal. Accordingly, we will not speculate
whether we would have jurisdiction to review a denial of summary judgment
if the legal issue were preserved in a Rule 50 motion, regardless of the type of
trial conducted – bench or jury. We merely conclude that, under Becker, we do
not have jurisdiction to review the district court’s denial of Blessey’s motion for
partial summary judgment. 6
Furthermore, even if we were to assume arguendo that we do have such
jurisdiction, we would affirm the district court’s denial of partial summary
judgment on the merits. The thrust of Blessey’s appeal is that the district court
should have entered judgment in its favor once the court determined that the
contract language was ambiguous because “Indiana law, unlike the law of
many other states, establishes that if a contract is truly ambiguous . . . then it
must be construed against the drafter (if there is one).” Although it is true
that, as a general rule, Indiana law requires that ambiguous terms be
construed against a known drafter, Blessey overreaches in contending that
4 Becker v. Tidewater, Inc., 586 F.3d 358, 365 n.4 (5th Cir. 2009) (citing Colonial Penn
Ins. v. Mkt. Planners Ins. Agency, Inc., 157 F.3d 1032, 1037 n.3 (5th Cir. 1998)).
5 The First and Fourth Circuits adhere to this rule. See Ji v. Bose Corp., 626 F.3d 116,
128 (1st Cir. 2010) (“[O]ur rule is that even legal errors cannot be reviewed unless the
challenging party restates its objection in a motion for JMOL.”); Chesapeake Paper Prods. Co.
v. Stone & Webster Eng’g Corp., 51 F.3d 1229, 1235 (4th Cir. 1995).
6 See Becker, 586 F.3d at 365 n.4.
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Indiana law contemplates entering judgment against the drafter of an
ambiguous contract in every case. 7
We acknowledge that “Indiana arguably applies the rule of construing
ambiguities against the drafter more liberally, and the Indiana Supreme Court
has occasionally applied the rule without considering whether extrinsic
evidence would clarify the parties’ intent.” 8 This does not mean, however, that
Indiana law mandates that every ambiguous contract be construed against a
known drafter, which is Blessey’s position. Rather, “[w]hen a contract’s terms
are ambiguous or uncertain and its interpretation requires extrinsic evidence,
its construction is a matter for the fact-finder.” 9 Thus, if we had jurisdiction
to consider the district court’s denial of Blessey’s motion for partial summary
judgment, we would affirm it.
B. Denial of motion in limine
Blessey also seeks to appeal the district court’s denial of its motion in
limine, arguing that the court erred in doing so because the Amendment
contained the following integration clause: “All prior verbal and written offers
relating to this First Amendment are hereby terminated.” Blessey submits
that, under Indiana law, “[w]hen two parties have made a contract and
expressed it in a writing to which they have both assented as the complete and
7See Holiday Hospitality Franchising, Inc. v. AMCO Ins. Co., 983 N.E.2d 574, 577-
578 (Ind. 2013) (“Where contractual language is ambiguous, we generally resolve those
ambiguities in favor of the [draftee], but will not do so if such an interpretation fails to
harmonize the provisions of a contract as a whole.” (citations omitted)).
8See BKCAP, LLC v. CAPTEC Franchise Trust 2000-1, 572 F.3d 353, 361 (7th Cir.
2009) (emphasis supplied).
9 Johnson v. Johnson, 920 N.E.2d 253, 256 (Ind. 2010) (citation omitted). The district
court’s jury instruction on the ambiguity question aligned with Indiana law: “If, after
considering those additional factors, doubt still remains as to a contract provision’s meaning,
you should consider that provision against the party that is responsible for drafting the
contract or choosing the terms whose meaning is unclear and in favor of the other party.”
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accurate integration of that contract,” extrinsic evidence is not admissible “for
the purpose of varying or contradicting the writing.” 10 Jeffboat disputes that
this language operates as an integration clause, asserting that its intended
purpose is to foreclose any future attempts by Blessey to purchase additional
barges under the terms of the Amendment.
We do not need to address the merits of this issue either. By adducing
some of the same extrinsic evidence at trial that it had sought to exclude in its
motion in limine, Blessey waived its right to challenge the district court’s
admission of that evidence. 11 In Ohler v. United States, the United States
Supreme Court held that “a party introducing evidence cannot complain on
appeal that the evidence was erroneously admitted.” 12 Not only did it introduce
evidence that it now complains the district court erroneously admitted at trial,
Blessey also referred to such evidence in its opening statement, advising the
jury that “[i]n the negotiations and the e-mails, you’ll see references to the
same terms and conditions as the original contract; you’ll see e-mails that
reference firm and fixed prices; you’ll see emails that reference barges that
were never built.”
Although Blessey insists that application of Ohler would have placed it
in an “untenable” position at trial because its witnesses would not have been
able to rely on extrinsic evidence to explain their testimony, this argument
10 See Dicen v. New Sesco, Inc., 839 N.E.2d 684, 688 (Ind. 2005).
11 See Ohler v. United States, 529 U.S. 753, 755 (2000); see also Clarett v. Roberts, 657
F.3d 664, 671 (7th Cir. 2011) (“The logic of Ohler applies with equal force in both criminal
and civil cases . . . . We note that every circuit to have addressed the question has applied
Ohler in civil cases.”).
12529 U.S. at 755; see also United States v. Fluker, 698 F.3d 988, 998 (7th Cir. 2012);
United States v. Newburn, 58 F. App’x 358, 358 (9th Cir. 2003) (rejecting challenge when the
appellant “registered his objection to the introduction of the images prior to trial, [but] he
chose to mention them in his own direct testimony”).
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actually weighs in favor of admission. 13 We are not persuaded by Blessey’s
contention that Federal Rule of Evidence 103(b) supports holding that its
objection was preserved by the filing of its motion in limine. The Advisory
Notes accompanying the 2000 Amendment to Rule 103 make clear that this
rule “does not purport to answer whether a party who objects to evidence that
the court finds admissible in a definitive ruling, and who then offers the
evidence to ‘remove the sting’ of its anticipated prejudicial effect, thereby
waives the right to appeal the trial court’s ruling.” 14 We conclude that, by
introducing extrinsic evidence, Blessey waived its right to appeal the district
court’s denial of its motion in limine to exclude just such evidence.
III.
CONCLUSION
The district court’s denial of Blessey’s motions for partial summary
judgment and in limine is AFFIRMED.
13See Canny v. Dr. Pepper/Seven-Up Bottling Grp., 439 F.3d 894, 904 (8th Cir. 2006)
(noting that a civil litigant “cannot avoid the consequence of its own trial tactic by arguing it
was forced to introduce the evidence during the direct examination . . . to diminish the
prejudice”).
14 FED. R. EVID. 103(b) advisory committee’s note (emphasis supplied).
9