Alta v. General Electric

CourtCourt of Appeals for the Fifth Circuit
DecidedJuly 1, 2026
Docket25-10774
StatusPublished

This text of Alta v. General Electric (Alta v. General Electric) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Alta v. General Electric, (5th Cir. 2026).

Opinion

Case: 25-10774 Document: 98-1 Page: 1 Date Filed: 07/01/2026

United States Court of Appeals for the Fifth Circuit ____________ United States Court of Appeals Fifth Circuit

FILED No. 25-10774 July 1, 2026 ____________ Lyle W. Cayce Alta Power, L.L.C., Clerk

Plaintiff—Appellant,

versus

General Electric International, Incorporated,

Defendant—Appellee. ______________________________

Appeal from the United States District Court for the Northern District of Texas USDC Nos. 3:21-CV-3183, 3:23-CV-270 ______________________________

Before Clement, Southwick, and Engelhardt, Circuit Judges. Kurt D. Engelhardt, Circuit Judge: Alta Power, L.L.C. appeals the dismissal of its tort claims against General Electric International, Inc. based on a contractual consequential- damages waiver. GE is a non-party to the agreement in which Alta bargained for a mutual waiver of consequential damages “arising out of or connected in any way to” the agreement. Alta asserts that (a) GE is not an intended third- party beneficiary eligible to enforce the consequential-damages waiver, (b) the waiver is unenforceable because GE fraudulently induced Alta to enter the agreement, and (c) the waiver does not apply to intentional tort claims. Case: 25-10774 Document: 98-1 Page: 2 Date Filed: 07/01/2026

No. 25-10774

The district court rejected Alta’s arguments under Texas law and granted summary judgment to GE. We AFFIRM. I. Looking to supply electricity in Texas during times of peak demand, Alta sought to build “peaker plants.” Peaker plants run only when demand for electricity exceeds the normal base load, like during a winter storm or extreme heat wave. To build its peaker plants, Alta sought to purchase refurbished turbines—a cost-effective alternative to new turbines. In the late 2010s, two companies, ProEnergy Solutions and GE, positioned themselves as refurbished-turbine suppliers. GE joined forces with WattStock to develop its TRUEPackage program and bring refurbished turbines to market. In 2017, GE and WattStock entered a Memorandum of Understanding (“MOU”) to memorialize their collaboration. Through TRUEPackage, WattStock could purchase, refurbish, and sell turbines manufactured by GE and backed by warranties GE chose to offer. While courting Alta’s business, GE and WattStock allegedly represented that they would supply up to nine turbines for no more than $10 million apiece and that GE would “stand behind” WattStock’s work to guarantee the turbines’ quality. Alta chose to contract with WattStock over ProEnergy, entering a Master Agreement in February 2019. Just one provision in this agreement generated the instant appeal. Alta and WattStock agreed to a limitation-of- liability provision mutually waiving consequential damages (the “Waiver”). It reads: Notwithstanding any other provision of this Agreement, and to the fullest extent permitted by law, neither Party, their respective officers, directors, partners, employees, representatives, contractors[,] or subcontractors shall be liable

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to the other or shall make any claim for any incidental, indirect[,] or consequential damages arising out of or connected in any way to this Agreement. This mutual waiver of consequential damages shall include, but is not limited to, loss of use, loss of profit, loss of business, loss of income, loss of reputation[,] or any other consequential damages that either Party may have incurred from any cause of action including negligence, strict liability, breach of contract[,] and breach of strict or implied warrant[y]. Consistent with the earlier MOU, GE officially became a WattStock subcontractor in July 2019. Although the details are unimportant to this appeal, the turbine arrangement broke down in 2020. WattStock sued Alta in state court for breach of contract, Alta countersued WattStock under contract and tort theories, and Alta eventually implicated GE as a third-party defendant. WattStock then filed for bankruptcy and removed the case to federal court. GE next asserted a counterclaim against Alta. Eventually, Alta and WattStock settled their claims against each other. The district court granted GE summary judgment on all of Alta’s claims pursuant to the consequential-damages waiver, but it held that GE could not state a breach of contract claim. It accordingly dismissed all claims with prejudice. Alta concedes that, if successful on appeal, consequential damages are the only damages it seeks. We review a district court’s summary judgment ruling de novo. Favela v. Collier, 91 F.4th 1210, 1212 (5th Cir. 2024). II. Alta challenges the district court’s summary judgment conclusion on three fronts. First, Alta argues that GE is not an intended-third-party beneficiary to the Waiver because it was not WattStock’s subcontractor at the time of the alleged wrongdoing. As such, GE’s allegedly tortious conduct occurred outside its role as subcontractor and is not covered. Next, Alta avers GE’s alleged fraudulent inducement renders the Waiver

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unenforceable, such that summary judgment should have been denied. Failing those two arguments, Alta lastly asserts that the Waiver does not apply to intentional tort claims. Under Texas contract law, we reject each of Alta’s arguments. A. Start with Alta’s third-party-beneficiary argument. “A third party may only enforce a contract when the contracting parties themselves intend to secure some benefit for the third party and entered into the contract directly for the third party’s benefit.” S. Tex. Water Auth. v. Lomas, 223 S.W.3d 304, 306 (Tex. 2007) (per curiam). The parties must “clearly and fully spell[] out” their intent to confer a direct benefit on a third party. Id. (citation modified); Wal-Mart Stores, Inc. v. Xerox State & Loc. Sols., Inc., 663 S.W.3d 569, 583 (Tex. 2023) (“The controlling factor is whether sufficiently clear and unequivocal language demonstrates such intent.”). Contracting parties need not “expressly name an intended third-party beneficiary.” Wal- Mart Stores, 663 S.W.3d at 585–86 (citation modified). Instead, they may reflect an intention to benefit a “class or category of persons,” who “may not be known to the contracting parties at the time of execution.” ConocoPhillips Co. v. Graham, No. 01-11-00503-CV, 2012 WL 1059084, at *6 (Tex. App.— Houston [1st Dist.] Mar. 29, 2012, no pet.). And third parties must benefit more than “incidentally” to enforce a contract. City of Houston v. Williams, 353 S.W.3d 128, 145 (Tex. 2011). GE must shoulder a “heavy” burden to establish its intended-third-party-beneficiary status. Mo. Pac. R.R. v. Harbison-Fischer Mfg. Co., 26 F.3d 531, 540 (5th Cir. 1994) (applying Texas law). Recall that the Waiver applies to Alta, WattStock, and, as relevant here, the parties’ “subcontractors.” It is undisputed that GE became a WattStock subcontractor in July 2019, so GE is within the “class or

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category” covered by the Waiver. ConocoPhillips, 2012 WL 1059084, at *6. The Waiver is broad, limiting subcontractors’ consequential-damage liability for “any cause of action” “arising out of or connected in any way to” the Master Agreement. That benefit is more than merely incidental. See Williams, 353 S.W.3d at 145–46 (concluding salary and overtime benefits promised to third party firefighters in union contract were direct, not merely incidental benefits).

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Alta v. General Electric, Counsel Stack Legal Research, https://law.counselstack.com/opinion/alta-v-general-electric-ca5-2026.