IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 13-30390

HDRE BUSINESS PARTNERS LIMITED GROUP, L.L.C.,

Plaintiff – Appellant

v.

RARE HOSPITALITY INTERNATIONAL, INCORPORATED, doing business 

as Longhorn Steakhouse,

Defendant – Appellee

Appeal from the United States District Court

for the Western District of Louisiana

USDC No. 5:09-CV-977

Before HIGGINBOTHAM, CLEMENT, and HIGGINSON, Circuit Judges.

PER CURIAM:*

HDRE Business Partners Limited Group, L.L.C. (“HDRE”) brought this 

suit against RARE Hospitality International Incorporated (“RARE”), alleging 

that RARE breached a lease agreement. RARE denied liability under the lease

on the ground that a subsequent contract between HDRE and RARE, an 

assignment of a purchase agreement, novated (replaced and extinguished) the 

lease. After a jury found that both HDRE and RARE intended novation, the 

* 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

August 6, 2014

Lyle W. Cayce

Clerk

 

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district court entered judgment for RARE. HDRE timely appealed. For the 

following reasons, we AFFIRM the district court’s judgment.

I.

RARE desired to lease a property in Bossier City, Louisiana (the 

“Property”) to open a restaurant. The owner of the Property, Stirling Bossier, 

L.L.C. (“Stirling”), however, wanted to sell rather than lease the Property. 

RARE contacted HDRE and the parties agreed that HDRE would purchase the 

Property from Stirling and then lease the Property to RARE.

Shortly thereafter, HDRE and Stirling executed a purchase agreement

in which HDRE agreed to purchase the Property from Stirling for $1,300,000. 

The purchase agreement included a feasibility period in which HDRE could 

terminate the agreement in its discretion, and a permit period in which HDRE 

could terminate the agreement if unable to obtain the required permits. HDRE 

and RARE then separately entered into a fifteen-year lease for the Property, 

which also included a feasibility and permit period. The lease further required 

HDRE to obtain title to the Property. 

The parties subsequently entered into several extension agreements in 

which the parties agreed to extend the closing date for the purchase agreement 

and the feasibility period for the lease. As part of these extension agreements, 

HDRE agreed to waive its right to terminate the purchase agreement.

On May 5, 2008, prior to the scheduled closing date on the Property and 

the expiration of the lease’s feasibility period, RARE informed HDRE that it 

would prefer to purchase the Property rather than lease it. RARE decided that 

“the numbers would work better as a purchase.” HDRE and RARE discussed 

the possibility of HDRE assigning the purchase agreement to RARE.

On May 9, the scheduled closing date and the expiration of the lease’s 

feasibility period, HDRE and Stirling entered into a final extension agreement 

to extend the closing date under the purchase agreement. As part of this final 

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extension agreement, HDRE agreed to assign the purchase agreement to 

RARE and to pay $25,000 to the title company by May 19, 2008.

On May 16, 2008, HDRE, RARE, and Stirling executed the assignment 

agreement. The assignment provided that it was effective as of the day it was 

executed and contained several relevant provisions. First, it provided that 

RARE agreed to assume all of HDRE’s rights and duties as “Purchaser” under 

the purchase agreement and the extension agreements (collectively, the 

“modified purchase agreement”). Second, the assignment made explicit 

RARE’s assumption of HDRE’s duty to pay the title company $25,000 by May 

19, 2008. Third, RARE agreed to pay HDRE $210,000 at the closing on the 

Property. Finally, and also as part of the assignment, Stirling agreed to amend

the purchase agreement to provide RARE the equivalent of a feasibility period 

during which RARE could terminate the purchase agreement if unable to 

obtain internal corporate approval for the purchase of the Property.

Shortly after the parties executed the assignment, RARE notified 

Stirling that it was unable to obtain internal corporate approval for the 

purchase of the Property and exercised its right to terminate the purchase 

agreement. HDRE subsequently filed this breach-of-contract suit against 

RARE, alleging that RARE breached the lease and seeking damages for lost 

rental income. RARE moved for summary judgment on the ground that both 

HDRE and RARE intended the assignment to novate (replace and extinguish) 

the lease. The district court granted summary judgment for RARE. We

reversed on appeal, finding a genuine dispute of material fact as to whether 

the parties intended novation. HDRE Bus. Partners Ltd. Grp., L.L.C. v. RARE 

Hospitality Int’l, Inc., 484 F. App’x 875 (5th Cir. 2012). 

On remand, HDRE moved for a jury trial on all issues of fact, including 

whether the parties intended novation. HDRE also briefed and argued to the 

district court that the assignment could not novate the lease as a matter of law 

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because the assignment was a conditional obligation and, under Louisiana law, 

a conditional obligation cannot novate an unconditional one. The district court 

rejected HDRE’s argument, ruling that the assignment was not a conditional

obligation. In doing so, the district court explained: 

[W]hat replaced the lease was the assignment. The assignment 

took place on the date it was executed. There was no conditional 

effect of that assignment. . . . The fact that [the] assignment had 

terms in it which were conditioned upon events and which might 

be in fact subject to suspensive conditions such as the payment of 

the $210,000 does not render the underlying nature of the 

assignment []conditional.

Following a trial, the jury found that both HDRE and RARE intended the 

assignment to novate the lease. The district court entered judgment for RARE, 

and HDRE appealed. 

II.

HDRE first contends that the assignment could not novate the lease 

because the assignment was a conditional obligation, and that the district 

court erred in ruling otherwise. The parties dispute the applicable standard of 

review and whether HDRE properly preserved this challenge. We need not 

resolve these disputes as HDRE’s challenge fails even under de novo review. 

The Louisiana Civil Code defines novation as “the extinguishment of an 

existing obligation by the substitution of a new one.” LA. CIV. CODE ANN. art. 

1879. Both the lease and the assignment constitute obligations, specifically 

conventional obligations or contracts. See Langhoff Props., LLC v. BP Prods.

N. Am., Inc., 519 F.3d 256, 260 (5th Cir. 2008); see also LA. CIV. CODE ANN. art. 

1756 (defining an “obligation” as “a legal relationship whereby a person, called 

the obligor, is bound to render a performance in favor of another, called the 

obligee”). By virtue of these obligations, HDRE and RARE possessed 

particular rights and owed particular duties with respect to each other. See 

Langhoff Props., 519 F.3d at 260.

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Even though courts and practitioners alike have loosely referred 

to these accompanying rights and duties—especially the duties—

as “obligations,” this word usage is technically imprecise. 

Correctly put, though, these rights and duties are correlative to, 

and flow from, the overarching conventional or legal obligation . . 

. . It is important to distinguish the obligation from the rights and 

duties derived therefrom, as this distinction bears on the concept 

of novation. 

Id.; see SAUL LITVINOFF, 5 LA. CIV. LAW TREATISE: THE LAW OF OBLIGATIONS § 

1.1 (2d ed. 2001). Accordingly, “[w]hen the Louisiana Civil Code speaks of 

novation, it is referring to the substitution of a new obligation for an existing 

one, rather than any substitution of the correlative rights and duties attendant 

on the old or new obligations.” Langhoff Props., 519 F.3d at 260-61. “The most 

important factor in determining whether a novation has been effected is the 

intent of the parties.” Scott v. Bank of Coushatta, 512 So. 2d 356, 360 (La. 

1987); Placid Oil Co. v. Taylor, 325 So. 2d 313, 316 (La. Ct. App. 1975). 

On appeal, HDRE does not challenge the jury’s finding that both HDRE 

and RARE intended the assignment to novate the lease. Thus, for the purposes 

of this appeal, it is undisputed that RARE and HDRE agreed to restructure 

their original deal so that HDRE would assign its rights and duties under the 

modified purchase agreement to RARE instead of HDRE purchasing the 

property and leasing it to RARE. HDRE’s argument on appeal is that the 

assignment could not novate the lease as a matter of law because the 

assignment was a conditional obligation. A “conditional obligation” is one 

whose enforceability is “dependent on an uncertain event.” See LA. CIV. CODE 

ANN. art. 1767; see also LITVINOFF §§ 5.1, 5.3. According to HDRE, Louisiana 

law does not permit a conditional obligation to novate an unconditional one

“regardless of the parties’ intent.” HDRE asserts that the assignment was 

conditional because one of the duties arising out of the assignment—RARE’s 

duty to pay HDRE $210,000—was dependent on RARE and Stirling closing on 

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the Property, which in turn was dependent on RARE obtaining internal 

corporate approval for the purchase of the Property, an event which never took 

place.

We need not resolve if or in what circumstances a conditional obligation 

can effect a novation under Louisiana law because we agree with the district 

court that the assignment was not a conditional obligation. The enforceability 

of the assignment was not dependent on the occurrence of an uncertain event. 

Rather, the assignment was an immediately binding and enforceable legal 

relationship. The assignment provided that it was effective as of the date it 

was executed, and effected an immediate transfer of rights and duties.1 The 

assignment gave rise to an immediately enforceable duty: RARE’s duty to 

assume and perform all of HDRE’s responsibilities under the modified 

purchase agreement—including, for instance, HDRE’s responsibility to pay the 

title company $25,000 by May 19, 2008. RARE’s duty to step into HDRE’s 

shoes as “Purchaser” in the modified purchase agreement was unconditional. 

As the district court observed, the conditional nature of one duty within the 

overarching assignment obligation (payment of $210,000 upon closing) did not 

render the assignment conditional. 

HDRE’s reliance on Tucker v. Stone, 115 So. 2d 636 (La. Ct. App. 1959),

is unavailing. In Tucker, the plaintiff had agreed to release the defendant from 

a lease if the defendant made certain repairs to the property and paid one 

month of rent. Id. at 637-38. The defendant did not make the required repairs, 

and the plaintiff sued on the lease. Id. at 638. The court held that the parties’ 

subsequent agreement did not novate the lease because “[t]he conditions upon 

which plaintiff agreed to cancellation of the lease were never met or complied 

1 The assignment expressly states that all of HDRE’s rights and duties under the 

modified purchase agreement “shall be and are hereby transferred and assigned to, and 

assumed by, [RARE].” (Emphasis added). 

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with by the defendant.” Id. at 369. In this case, unlike in Tucker, the parties’ 

second agreement, the assignment, did not condition the cancellation of the 

lease on any event. Instead, the assignment was unconditional and, consistent 

with the jury’s finding, effected an immediate cancellation of the lease.

Accordingly, HDRE has not established any legal impediment to 

novation. The jury found, and HDRE does not dispute, that the parties 

intended the assignment to novate the lease. We perceive no error in the 

district court’s entry of judgment for RARE in these circumstances.

III.

HDRE next contends that the assignment could not novate the lease as 

a matter of law because the assignment was not a valid contract. In particular, 

HDRE asserts that the assignment was a legal nullity because (1) the 

assignment was merely an “agreement to consider agreeing,” (2) RARE’s 

signatory “lacked present authority to bind RARE,” and (3) the assignment 

contained a condition subject to the “whim” of the obligor, see LA. CIV. CODE 

ANN. art. 1770. RARE responds that HDRE waived these arguments by failing 

to raise them in the district court. 

“Under this Circuit’s general rule, arguments not raised before the 

district court are waived and will not be considered on appeal unless the party 

can demonstrate extraordinary circumstances.” AG Acceptance Corp. v. Veigel, 

564 F.3d 695, 700 (5th Cir. 2009) (internal quotation marks omitted). To 

preserve an argument, a party must raise it “to such a degree that the trial 

court may rule on it.” In re Fairchild Aircraft Corp., 6 F.3d 1119, 1128 (5th 

Cir. 1993). The record reflects that HDRE did not raise, and the district court 

was not given the opportunity to rule on, these arguments below. Nor has 

HDRE demonstrated extraordinary circumstances in this case. We therefore 

adhere to our general rule and decline to consider HDRE’s substantive 

arguments for the first time on appeal.

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IV.

Finally, HDRE contends that the district court committed two errors in 

instructing the jury. HDRE first contends that the district court erred in

instructing the jury on three of RARE’s alternative defenses because this court 

previously resolved the defenses in the prior summary-judgment appeal. “We 

review a district court’s jury instructions for abuse of discretion.” Jowers v. 

Lincoln Elec. Co., 617 F.3d 346, 352 (5th Cir. 2010). Reversal is appropriate 

only if an erroneous instruction “affected the outcome of the case.” Id. (quoting 

Bender v. Brumley, 1 F.3d 271, 277 (5th Cir. 1993)). HDRE has not shown that 

the challenged instructions, even if erroneous, affected the outcome of the case. 

The jury never reached RARE’s alternative defenses. Novation was the first 

question on the verdict slip and the only question answered by the jury. As a 

result, HDRE has not shown that reversal is appropriate on this ground.

HDRE further contends that the district court erred in failing to give 

requested instructions. HDRE does not, however, identify which instructions 

the district court should have given. Nor does HDRE demonstrate that the 

district court’s failure to give the requested instructions seriously impaired 

HDRE’s ability to present its claims. See Kanida v. Gulf Coast Med. Pers. LP, 

363 F.3d 568, 578 (5th Cir. 2004). Accordingly, HDRE has not shown reversible 

error with respect to the jury instructions. 

V.

For the foregoing reasons, the district court’s judgment is AFFIRMED.

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