IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 16-20291

NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, 

PENNSYLVANIA, as Subrogee of Transmontaigne Product Services, 

Incorporated, 

 Plaintiff - Appellant 

v. 

EXXONMOBIL GAS & POWER MARKETING COMPANY, a Division of 

Exxon Mobil Corporation, 

 Defendant - Appellee 

Appeal from the United States District Court 

for the Southern District of Texas 

USDC No. 4:15-CV-3315

Before SMITH, PRADO, and GRAVES, Circuit Judges. 

PER CURIAM:*

National Union Fire Insurance Company of Pittsburgh PA (“National 

Union”) appeals the district court’s dismissal without prejudice of its claim 

against ExxonMobil Gas & Power Marketing Company (“ExxonMobil”). 

Because National Union did not plead for damages in a form recoverable under 

 

* 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.

United States Court of Appeals

Fifth Circuit

FILED

June 22, 2017

Lyle W. Cayce

Clerk

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No. 16-20291

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the Propane Sales Agreement (“Agreement”) entered into by its subrogor, 

TransMontaigne Product Services, Inc. (“TransMontaigne”), we AFFIRM the 

district court’s judgment. 

I. 

TransMontaigne has an exclusive lease on the Ella-Brownsville Pipeline, 

which it uses to supply liquefied petroleum gas, also known as propane or 

butane, to its customer Nieto Trading B.V. (“Nieto”). On November 1, 2012, 

TransMontaigne and ExxonMobil entered into the Agreement, according to 

which ExxonMobil would sell, and TransMontaigne would purchase, all 

propane produced at ExxonMobil’s King Ranch Gas Plant. When the King 

Ranch was damaged due to fire on November 13, 2013, ExxonMobil asserted 

that it was no longer required to perform under the Agreement due to a “Force 

Majeure” event.

As subrogee of TransMontaigne, National Union sued ExxonMobil, 

claiming breach of the Agreement due to non-performance. In its complaint, 

National Union described its theory of damages as “the market price / contract 

price formula under Tex. Bus. & Comm. [sic] Code § 2.173; i.e. the difference 

between the market price at the time when the buyer learned of the breach 

and the contract price, but less expenses saved in consequence of the seller’s 

breach.” But it also stated that “the damages sustained by TransMontaigne 

was $1,129,316, calculated from the lost revenue of the difference in market 

price to Nieto Trading B.V. from the contract price from ExxonMobil.” 

On March 7, 2016, ExxonMobil moved to dismiss National Union’s claim 

on grounds that National Union pleaded for damages in the form of lost profits, 

which are expressly non-recoverable under the Agreement. On April 13, 2016, 

the district court dismissed National Union’s claim without prejudice;

however, it did not issue a reasoned opinion explaining the dismissal. National 

Union appeals from the district court’s dismissal. 

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II. 

We “apply a less stringent standard of review to a District Court’s 

dismissal of a suit without prejudice, because the plaintiff would be able to file 

his suit again.” Boazman v. Econs. Lab., Inc., 537 F.2d 210, 212-13 (5th Cir. 

1976). In addition, in this diversity action we “apply state substantive and 

federal procedural law.” Gasperini v. Center for Humanities, Inc., 518 U.S. 415, 

427 (1996). 

National Union contends that it did not plead for “lost profits,” which it 

acknowledges would be non-recoverable; therefore, its claim should have been 

allowed to proceed. This argument is unpersuasive. Under Texas law, “[l]ost 

profits are damages for the loss of net income to a business measured by 

reasonable certainty.” Miga v. Jensen, 96 S.W.3d 207, 213 (Tex. 2002). Here, 

National Union’s complaint states that the damages TransMontaigne 

sustained are “$1,129,316, calculated from the lost revenue of the difference in 

market price to Nieto Trading B.V. from the contract price from ExxonMobil.” 

This language highlights the fatal flaw in its argument: The difference in the 

amount that TransMontaigne would have received from Nieto minus the 

amount it would have paid ExxonMobil describes TransMontaigne’s “loss of 

net income,” which, in turn, is “lost profits” under Texas law. Id. Lost profits

are non-recoverable under the Agreement. National Union’s claim was 

correctly dismissed. 

In the alternative, National Union contends that “a limitation precluding 

recovery of . . . lost profits would be unenforceable pursuant to Tex. Bus. & 

Comm. [sic] Code § 2.719(b).” It also contends that “a limitation of recovery of 

direct lost profits conflicts with other provisions of the [Agreement], and as 

such creates an ambiguity precluding dismissal . . . .” Neither argument is 

persuasive. Tex. Bus. & Com. Code § 2.719(b) only applies when “the remedy 

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is expressly agreed to be exclusive, in which case it is the sole remedy.” § 

2.719(a)(2). Here, the parties did not agree to an exclusive remedy. Id. In 

addition, the Agreement is not ambiguous regarding whether lost profits are 

recoverable. It clearly states that they are not. 

AFFIRMED. 

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