Mansour Al-Saud v. Youtoo Media,L.P.

CourtCourt of Appeals for the Fifth Circuit
DecidedOctober 22, 2018
Docket17-10622
StatusUnpublished

This text of Mansour Al-Saud v. Youtoo Media,L.P. (Mansour Al-Saud v. Youtoo Media,L.P.) 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
Mansour Al-Saud v. Youtoo Media,L.P., (5th Cir. 2018).

Opinion

Case: 17-10622 Document: 00514692248 Page: 1 Date Filed: 10/22/2018

IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

No. 17-10622 United States Court of Appeals Fifth Circuit

FILED October 22, 2018 MANSOUR BIN ABDULLAH AL-SAUD, Lyle W. Cayce Plaintiff - Appellee Cross-Appellant Clerk

v.

YOUTOO MEDIA, L.P.; CHRISTOPHER WYATT,

Defendants - Appellants Cross-Appellees

Appeals from the United States District Court for the Northern District of Texas USDC No. 3:15-CV-3074

Before HIGGINBOTHAM, DENNIS, and COSTA, Circuit Judges. GREGG COSTA, Circuit Judge:* Mansour Bin Abdullah Al-Saud made a $3 million reimbursable down payment to Youtoo Media, L.P. while he considered whether to purchase a stake in the technology company. When Youtoo’s prospects dimmed and creditors forced the sale of its intellectual property, Al-Saud wanted his $3 million back. Youtoo declined, Al-Saud sued, and a jury found that Youtoo breached the parties’ agreement. The jury also determined that Youtoo’s CEO Chris Wyatt had breached the contract. We affirm that judgment, but remand

* 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 R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR.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. Case: 17-10622 Document: 00514692248 Page: 2 Date Filed: 10/22/2018

No. 17-10622 for further consideration of attorneys’ fees under a loan agreement between the parties. I. Youtoo’s technology blended social media and television by allowing viewers to actively participate in broadcasts by sending texts, pictures, and videos that networks could insert into programs. The company also developed a “sweepstakes platform” that would let viewers compete for cash and prizes while watching game shows and sporting events. But to sell the platform to American broadcasters (its ultimate goal), Youtoo felt it had to demonstrate success in other markets, and to do that it needed capital. That search for markets and money brought these parties together. Wyatt discussed initiating Youtoo operations in the Middle East and selling a stake in the company with Al-Saud, who is a member of the Saudi royal family, and his advisor. The parties signed a Letter of Intent (LOI) in October 2013. Al-Saud gave Youtoo $3 million as a down payment to cover its short-term costs and had three months to decide “in his sole discretion” whether to buy a stake in the company. If he declined that option, Youtoo would reimburse the down payment. The LOI also created Youtoo Middle East, a joint venture that would market the company’s interactive platform in the region. The LOI provides that Youtoo’s “general partner is Chris Wyatt (the ‘General Partner’).” And Wyatt signed the agreement on behalf of both Youtoo and “Chris Wyatt as the General Partner”

2 Case: 17-10622 Document: 00514692248 Page: 3 Date Filed: 10/22/2018

No. 17-10622

But registration documents filed with the Texas Secretary of State indicate that Youtoo Management, LLC, not Wyatt, is the General Partner. Though drafts of the LOI mention Youtoo Management as Youtoo’s General Partner, the signed contract does not. Al-Saud ultimately opted against purchasing an interest in the company. But because Wyatt made clear that it needed cash to continue operations— operations that would presumably redound to the benefit of Youtoo Middle East—Al-Saud gave Youtoo an additional $310,000. A March 2014 Facility Agreement memorialized that loan. Despite this move to shore up its finances, Youtoo’s primary lender eventually forced the company to sell its intellectual property and assets to cover outstanding debts. In light of Youtoo’s wind down, Al-Saud asked for his money back. But Youtoo rejected his request for repayment of both the down payment and the loan. For the down payment, it asserted that Al-Saud had agreed to be “reimbursed in full” through the first $3 million in profit distributions from Youtoo’s share in the Middle East entity. As to the loan, the company contended that Al-Saud had agreed to be repaid in services Youtoo performed for Youtoo Middle East.

3 Case: 17-10622 Document: 00514692248 Page: 4 Date Filed: 10/22/2018

No. 17-10622 Unsatisfied, Al-Saud sued for breach of contract. Youtoo counterclaimed for breach of contract, breach of fiduciary duty, and fraud. At trial, the district court dismissed Youtoo’s counterclaims as a matter of law. The jury then found Youtoo and Wyatt liable for breaching the LOI and awarded Al-Saud $3 million in damages for the down payment that was not returned. It also found Youtoo liable for breaching the Facility Agreement but awarded Al-Saud only $6,820 for that claim, which was the interest associated with the loan. Al-Saud sought attorneys’ fees for his success on both claims. The district court allowed him to recover them against Wyatt (but not Youtoo) for the claim that recovered the $3 million down payment, but denied the request for work relating to the Facility Agreement claim. II. Youtoo does not appeal the judgement entered against it for breaching the LOI. Wyatt does, arguing that the agreement did not make him directly liable for the down payment and that he cannot be derivatively liable as Youtoo’s General Partner because the contract is mistaken in saying he held that position. A. The district court entered judgment against Wyatt based on the jury’s finding that he was individually liable for breaching the letter of intent. Al- Saud’s primary defense of Wyatt’s liability is on this ground. He contends that Wyatt’s signing of the contract as General Partner rendered him liable for the failure to return the down payment. Whether Wyatt could be directly liable under the LOI is a matter of contract interpretation that we review de novo. 1 Fort Worth 4th Street

1 Al-Saud argues that Wyatt failed to preserve a challenge to his direct liability by not filing a postverdict motion for judgment as a matter of law. Admittedly, it is not entirely clear from Wyatt’s briefing whether he argues there was insufficient evidence to find him 4 Case: 17-10622 Document: 00514692248 Page: 5 Date Filed: 10/22/2018

No. 17-10622 Partners, L.P. v. Chesapeake Energy Corp., 882 F.3d 574, 577 (5th Cir. 2018); cf. Janvey v. Dillon Gage, Inc. of Dallas, 856 F.3d 377, 388 (5th Cir. 2017) (noting that instructions hinging on questions of statutory construction are reviewed de novo). The LOI “intended to create legally binding and enforceable obligations between the Parties.” Those parties included Youtoo and Al-Saud, not the General Partner (whether that be Wyatt or another entity), although the agreement did specify some obligations of the General Partner. But the LOI placed the burden on Youtoo alone to reimburse Al-Saud’s down payment in the event he decided against purchasing a stake in the company: “Youtoo Media shall reimburse the Down Payment to HRH Prince Mansour through a mechanism which is to be agreed between the Parties at such time and with such mechanism to have the economic effect of the Down Payment being reimbursed in full to HRH Prince Mansour.” The absence of the General Partner from the reimbursement requirement contrasts with other provisions that mention or obligate both Youtoo and “the General Partner.” For example, the General Partner agreed

directly liable or whether he challenges as a legal matter the trial court’s rejection of his argument that the jury should not have been asked about his liability. Our best reading is that he does both. That means at least the appeal of the jury question was sufficiently preserved in the trial court when he objected to it at the charge conference. Jimenez v. Wood Cty., Tex., 660 F.3d 841, 844–45 (5th Cir. 2011) (en banc) (citing Federal Rule of Civil Procedure

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