Texas Black Iron, Inc. v. Arawak Energy International Ltd

566 S.W.3d 801
CourtCourt of Appeals of Texas
DecidedDecember 6, 2018
Docket14-17-00748-CV
StatusPublished
Cited by14 cases

This text of 566 S.W.3d 801 (Texas Black Iron, Inc. v. Arawak Energy International Ltd) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Texas Black Iron, Inc. v. Arawak Energy International Ltd, 566 S.W.3d 801 (Tex. Ct. App. 2018).

Opinion

Affirmed in part, Reversed in part, Remanded, and Opinion filed December 6, 2018.

In the

Fourteenth Court of Appeals

NO. 14-17-00748-CV

TEXAS BLACK IRON, INC., Appellant v.

ARAWAK ENERGY INTERNATIONAL LTD., Appellee

On Appeal from the 215th District Court Harris County, Texas Trial Court Cause No. 2016-68885

OPINION

Texas Black Iron, Inc. (TBI), and Arawak Energy International Ltd. entered into a purchase order agreement for oil and gas drilling equipment. Arawak prepaid for the entire purchase order. TBI failed to deliver certain equipment and refunded a portion of the prepaid amount to Arawak. Arawak returned some of the equipment and sought a refund under the buy-back provision of the purchase order. TBI refused to pay. Arawak filed claims against TBI and applied for a temporary injunction.1 TBI filed counterclaims against Arawak. Arawak moved for traditional and no- evidence summary judgment. The trial court granted Arawak’s motion on its contract claim and on TBI’s contract and fraud counterclaims. The trial court awarded Arawak damages, attorney’s fees, costs, and pre- and postjudgment interest. The trial court also granted Arawak’s motion to strike TBI’s amended answer and counterclaims.

TBI challenges the trial court’s final judgment in seventeen issues. We conclude that the trial court properly granted summary judgment in Arawak’s favor on its contract claim and TBI’s contract and fraud counterclaims. We also conclude that the trial court acted within its discretion in striking TBI’s amended answer and counterclaims. We conclude that the trial court erred in its award of attorney’s fees to Arawak, as well as in its awards for costs and prejudgment interest. Accordingly, we affirm the trial court’s final judgment in part and reverse it in part and remand for additional proceedings in accordance with this opinion.

I. BACKGROUND

In early 2016, Arawak approached TBI to discuss purchasing various sizes— including 13-5/8ʺ, 20ʺ, and 26ʺ—of casing and casing pup joints for an exploratory well Arawak planned to drill in the United Arab Emirates (UAE). Arawak and TBI negotiated the terms of the sale, which were reduced to writing in a one-page purchase order. Steve Yamin, the president of TBI, and Shahveer Kapadia, a director of Arawak, both executed the purchase order on February 22, 2016. The stated delivery date was April 11, 2016. The shipping terms were “DDP Umm Al Quwain,

1 This court previously affirmed the temporary injunction. Tex. Black Iron, Inc. v. Arawak Energy Int’l Ltd., 527 S.W.3d 579, 582, 589 (Tex. App.—Houston [14th Dist.] 2017, no pet.).

2 UAE.” TBI was to pay any duty on the equipment.

The purchase order stated: “PAYMENT TERMS: WITHIN 3 BUSINESS DAYS AFTER RECEIPT OF CORRECT INVOICE.” The purchase order also stated:

BUY-BACK CONDITION. 75% OF PURCHASE VALUE AFTER DELIVERY OF RETURNED CASING TO VENDOR’S UMM AL QUWAIN YARD AND INSPECTION AT BUYER’S EXPENSE.

TBI sent Arawak a commercial invoice with wire instructions. Arawak prepaid $2,843,579.70 as requested in the invoice. TBI received and accepted this payment.

TBI failed to deliver the 13-5/8ʺ equipment, for which Arawak had paid TBI $1,112,743.00. TBI informed Arawak that Arawak would need to locate the 13-5/8ʺ equipment itself from another supplier. TBI refunded Arawak $400,000.00 for the 13-5/8ʺ equipment.

TBI delivered the 20ʺ and 26ʺ equipment. Arawak did not use and returned certain equipment—namely, 1,023.2 meters of the 26ʺ casing, 1,421.6 meters of the 20ʺ casing, and one 20ʺ casing pup. Applying the 75% buy-back price, the return value of this equipment was $768,304.00. Arawak sought a refund from TBI under the buy-back provision. TBI did not pay Arawak anything for this equipment.

Arawak filed suit against TBI in October 2016. Arawak originally brought claims for breach of contract and suit on sworn account, and later amended to add a claim for conversion.2 TBI answered with a general denial and filed counterclaims against Arawak for breach of contract, fraud and fraudulent inducement, and violations of the DTPA.3

2 The sworn-account and conversion claims are not at issue on appeal. 3 The DTPA claims were nonsuited and are not at issue on appeal.

3 In May 2017, Arawak filed a no-evidence and traditional motion for summary judgment. Arawak moved for traditional summary judgment on its contract claim. Arawak argued that there was no material fact issue because the parties entered into an agreement; Arawak tendered performance by paying for the equipment; TBI breached the purchase order by failing to deliver the 13-5/8ʺ equipment and by refusing to honor the buy-back provision on the 20ʺ and 26ʺ equipment; and Arawak sustained total damages of $1,481,047.00.4

4 To its summary-judgment motion, Arawak attached the following exhibits:

A. its original petition and application for temporary restraining order and temporary injunction, with attached: o exhibit A—a letter from Yamin to Arawak dated February 20, 2016, with subject line: “Amendment to Quote No. 021316-01 for UAQP- 1 Well”; TBI’s amended quote initialed and dated February 20, 2016; TNI’s initialed terms and conditions sheet; and the purchase order executed February 22, 2016; and o exhibit B—an affidavit from Kapadia, dated October 6, 2016; the civil case information sheet; civil process request; and envelope details printout page; B. TBI’s counterclaim, with attached: o exhibit 1—TBI’s amended quote initialed and dated February 20, 2016; TBI’s initialed terms and conditions sheet; and TBI’s terms and conditions sheet; and o exhibit 2—the purchase order executed February 22, 2016; C. Arawak’s first amended petition, application for TRO and temporary injunction, general denial, and answer, with attached: o exhibit A—the February 20, 2016 letter from Yamin to Arawak; TBI’s amended quote initialed and dated February 20, 2016; TBI’s initialed terms and conditions sheet; and the purchase order executed February 22, 2016; and o exhibit B—an affidavit from Kapadia dated October 6, 2016; and envelope details printout page; D. the February 20, 2016 letter from Yamin to Arawak; TBI’s amended quote initialed and dated February 20, 2016; TBI’s initialed terms and conditions sheet; and the purchase order executed February 22, 2016; E. an email from Yamin to Greg Szutiak, Yevgenly Khalenko, and Sergey Pan, 4 Arawak moved for no-evidence summary judgment on TBI’s contract and fraud claims. Arawak argued that TBI had no evidence that Arawak breached the agreement or that Arawak made any material misrepresentations. Arawak also moved for traditional summary judgment on TBI’s contract and fraud claims.

TBI filed a first amended answer, in which for the first time it alleged various affirmative defenses, and a first amended counterclaim, which added claims for tortious interference, and concerted action and/or conspiracy. Arawak filed a motion to strike TBI’s amended answer and counterclaims. TBI filed a response,

dated February 17, 2016, with subject line: “QUOTE FOR CONSIDERATION—9 5/8––13 5/8”; F. an email from Keith Mustard to Yamin, dated February 18, 2016, with subject line: “Buy Back Terms”; G. an email from Yamin to Mustard, dated February 18, 2016, with subject line: “Re: Buy Back Terms”; H. an email from Yamin to Szutiak, dated February 18, 2016, with subject line: “Re: QUOTE FOR CONSIDERATION—9 5/8––13 5/8”; I. an email from Yamin to Szutiak, dated March 8, 2016, with subject line: “13 5/8”; J. an email from Pan to Yamin, dated February 20, 2016, with subject line: “Casing Purchase”; K. an email from Yamin to Swarlu Thomas, dated February 25, 2016, with subject line: “Re: Texas Black Iron Pipe Yard location”; L. an email from Yamin to Szutiak, dated March 3, 2016, with subject line: “RE: time—td”; M.

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566 S.W.3d 801, Counsel Stack Legal Research, https://law.counselstack.com/opinion/texas-black-iron-inc-v-arawak-energy-international-ltd-texapp-2018.