Finite Utility v. Tawa

Court of Appeals for the Fifth Circuit·Decided August 4, 2026·No. 25-20396·Unpublished

Opinion

United States Court of Appeals for the Fifth Circuit

____________ United States Court of Appeals Fifth Circuit

No. 25-20396

FILED

August 4, 2026

Lyle W. Cayce

Finite Utility Consulting, L.L.C., Clerk

Plaintiff—Appellant/Cross-Appellee,

versus

Tawa, Incorporated (Retail), also known as Tawa; Tawa Supermarket, Incorporated; Tawa Services, Incorporated; Welcome Market, Incorporated; Welcome Services, Incorporated; Walong Marketing, Incorporated, also known as Walong Corporation,

Defendants—Appellees,

Tawa Retail Group, Incorporated, also known as Welcome California Market, Incorporated

Defendant—Appellee/Cross-Appellant.

Appeal from the United States District Court for the Southern District of Texas USDC No. 4:23-CV-432

No. 25-20396

Before Willett, Engelhardt, and Douglas, Circuit Judges. Per Curiam: * This appeal and cross-appeal arise from a soured relationship between an energy broker and its supermarket client. Finite Utility Consulting, L.L.C. challenges the exclusion of two witnesses and the resulting summary judgment on its claims. Various Tawa Retail Group, Incorporated entities (Tawa) cross-appeal the summary judgment dismissing their counterclaims. We AFFIRM in full.

I. Background

Tawa owns and operates supermarkets nationwide. Finite is a Texasbased energy broker that earns commissions from electricity and natural gas suppliers by negotiating energy-supply contracts with energy suppliers for its clients.

The parties executed three client-representation agreements (CRA):

one in December 2019 and two more in March and August 2020. The later CRAs named Finite as Tawa’s “sole and exclusive consultant” for Tawa’s “energy related initiatives” and authorized Finite to obtain “price quotes and evaluate competing offers and services.” The December 2019 CRA, however, contained no exclusivity provision.

The relationship began on December 20, 2019, when Tawa’s licensing manager Cristina Chang asked Thomas Lee—Finite’s vice president and principal employee—to obtain energy pricing for a new store in Quincy, Massachusetts. After several weeks of emails about pricing, Finite sent a Letter of Assurance (LOA) to Tawa regarding the Massachusetts store. Although the January 7, 2020 LOA stated that Finite would “assure the

*

This opinion is not designated for publication. See 5th Cir. R. 47.5.

No. 25-20396

energy supply rate” for the store, it also stated that the LOA “shall in no way be considered a guarantee of the contracted rate by the Supplier.” On February 14, 2020, with Finite acting as a broker, Tawa entered an 18-month supply agreement with Constellation New Energy – Texas (CNE-TX) for the Massachusetts store.

Tawa’s first CNE-TX bill was much higher than expected. In response to Tawa’s inquiry, Finite attributed the difference to mandatory Massachusetts market charges that it had “underestimat[ed]”—charges that Finite described as “the highest [Finite] ha[d] ever seen.” In mid-April 2020, Finite said it would continue tracking the account and, “if insufficient, provide appropriate reimbursement.” No reimbursement followed.

On April 20, 2021, Tawa revoked Finite’s authority to negotiate supply contracts on its behalf. Tawa later entered or extended energy-supply agreements with other suppliers, without Finite, during 2021 and 2022.

Finite sued Tawa in Texas state court on January 6, 2023, alleging that Tawa had breached the CRAs by negotiating directly with suppliers or using other brokers. Tawa removed the case based on diversity jurisdiction. 1 It then counterclaimed for breach of contract, promissory estoppel, negligent misrepresentation, and unjust enrichment. The district court converted Finite’s motion to dismiss those counterclaims into a motion for summary judgment.

Two Finite witnesses matter here. First, Finite designated German Ibanez as its sole damages expert. Ibanez ultimately opined that Tawa’s alleged breaches cost Finite more than $2.5 million in commissions over

1 See 28 U.S.C. § 1441.

No. 25-20396

three years. Second, Finite designated Lee as a nonretained expert on various aspects of Finite’s business.

Tawa designated Udit Patel as an expert witness on April 2, 2024, to address the CRAs, industry practice, the conditions under which brokers earn commissions, and customary commission ranges. Patel’s April 2, 2024 report accompanied Tawa’s designation. Finite served Ibanez’s rebuttal report on April 30, 2024. Then, on May 23, it amended Lee’s disclosure; as the magistrate judge described it, Finite’s amended disclosure added “entirely new opinions” that expressly “rejoin[ed] and rebut[ted]” Patel.

Discovery closed on June 7, 2024—about two weeks after the amended Lee disclosure. One week later, Tawa moved to exclude Ibanez and Lee and for summary judgment on Finite’s claims. The magistrate judge recommended granting all three motions, and the district court adopted that recommendation.

Considering Finite’s summary-judgment motion regarding Tawa’s counterclaims, the magistrate judge recommended judgment in Finite’s favor. The district court agreed, dismissing the claims with prejudice. Final judgment followed, and both sides appealed.

II. Finite’s Appeal

We begin with Finite’s appeal. The district court did not abuse its discretion by excluding either Ibanez or Lee, and without evidence of lost commissions, Finite’s claims cannot survive summary judgment. 2

2 The parties dispute whether Texas or California law governs Finite’s request for attorney fees. We need not decide. Because Finite does not prevail on any claim, it is not entitled to attorney fees under either State’s laws.

No. 25-20396

A. Exclusion of Ibanez’s Testimony We review the exclusion of expert testimony for abuse of discretion, disturbing the ruling only if it is manifestly erroneous. In re Complaint of C.F. Bean L.L.C., 841 F.3d 365, 369 (5th Cir. 2016); Watkins v. Telsmith, Inc., 121 F.3d 984, 988 (5th Cir. 1997).

Daubert requires the district court to screen expert testimony for relevance and reliability. Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 589 (1993); Watkins, 121 F.3d at 988–89. Ordinarily, objections to an opinion’s factual basis affect weight, not admissibility. Viterbo v. Dow Chem. Co., 826 F.2d 420, 422 (5th Cir. 1987).

But not always. When an opinion rests on a source “of such little weight” that it would not help the jury reach “an intelligent and sound verdict,” exclusion is proper. Id. A “fundamentally unsupported” opinion supplies “no expert assistance to the jury,” and “its lack of reliable support may render it more prejudicial than probative.” Id.

Ibanez’s model had three inputs: Tawa’s estimated energy usage, an assumed broker fee, and an assumed three-year contract term. The broker fee—the commission paid by the supplier—was the model’s linchpin. Ibanez acknowledged that the actual fee would depend on the energy market, the supplier’s offered price, and the customer’s willingness to pay. Small changes mattered enormously: using the maximum fee could inflate the model tenfold.

Yet Ibanez considered none of those market variables. He relied instead on a single California-focused agreement between Finite and Direct Energy, another energy supplier, that permitted fees “up to $0.010 per kWh” for electricity and “up to $0.50 per DTh” for natural gas.

No. 25-20396

The agreement set ceilings, not expected commissions. Ibanez conceded that an actual fee need not equal the maximum and would turn on market conditions and customer demand. Still, he used both maximums— $0.01 and $0.50—without consulting other documents, market data, or other brokers. His explanation was candid: he “liked the maximum amount of the contract.”

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