IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 10-30005

WATER CRAFT MANAGEMENT, L.L.C.; DOUGLAS WAYNE GLASCOCK;

NICK A. MARTRAIN,

Plaintiffs-Appellees Cross-Appellants

v.

MERCURY MARINE, A Division of Brunswick Corp.,

Defendant-Appellant Cross-Appellee

Appeal from the United States District Court

for the Middle District of Louisiana

USDC No. 3:99-CV-1031

Before JONES, Chief Judge, JOLLY, and GARZA, Circuit Judges.

PER CURIAM:

*

In this lawsuit, Mercury Marine (“Mercury”) seeks reversal of the district

court’s award of damages to Water Craft Management, L.L.C., and its two

corporate officers (collectively “Water Craft”) for claims of detrimental reliance

and fraudulent misrepresentation. Water Craft contests the validity of the

contracts between the parties and the court’s award of damages to Mercury for

its counter claims. For reasons discussed below, we REVERSE the district

United States Court of Appeals

Fifth Circuit

F I L E D

February 1, 2011

Lyle W. Cayce

Clerk

 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.

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court’s judgment on the claims of detrimental reliance and fraudulent

misrepresentation and VACATE the damage awards for Water Craft, Douglas

Glascock, and Nick Martrain. We AFFIRM the remainder of the district court’s

judgment.

I

This protracted litigation centers around a series of meetings and two

sales agreements executed by Mercury, a manufacturer of outboard motors, and

Water Craft, an LLC formed by Douglas Glascock and Nick Martrain. The LLC

operated a marine dealership, LA Boating Centre, in Baton Rouge, Louisiana.

In November 1996, after discussions with Mercury representatives, Water Craft

executed a Sales & Service Agreement (“SSA”), which made Water Craft a nonexclusive Mercury dealer. The SSA stated that prices and discounts for Mercury

products would be based on lists published by Mercury, which the manufacturer

could freely revise. The SSA also contained an integration clause that provided

the contract was the “entire agreement” between the parties and that the SSA

“replace[d] all prior agreements between the parties.” The SSA could only be

modified in a writing signed by both parties.

In spring 1997, the parties had a second series of discussions about

possible pricing discounts and whether Mercury had plans to make Travis, a

competing marine store, a Mercury dealer. A few months later, Water Craft

executed a second SSA, which was almost identical to the first agreement.

Months passed, Water Craft’s finances worsened, and eventually, the dealership

stopped paying Mercury for merchandise. By August 1998, Water Craft’s

finances were so poor that Glascock and Martrain wanted to shut down the

store. Mercury representatives dissuaded the men from closing the marine

dealership by promising additional financing, which never actually materialized.

Glascock funneled an additional $50,000 into the dealership. Despite the

injection of capital, the store continued losing money and eventually closed.

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After this, Water Craft, Glascock, and Martrain sued Mercury in

Louisiana state court, alleging violations of federal antitrust law and various

state law claims including breach of contract, detrimental reliance, fraud, and

misrepresentation. Mercury removed the lawsuit to federal court. Before trial,

the district court granted Mercury’s motion for summary judgment on Water

Craft’s claims of intentional and negligent fraudulent misrepresentation. Water

Craft Mgmt., L.L.C. v. Mercury Marine, 361 F. Supp. 2d 518, 562 (M.D. La. 2004)

(Water Craft I).

At trial, the district court considered the SSAs and several discussions

between the parties. Based on that evidence, the court determined that Mercury

had not breached the terms of the SSAs. The district court also concluded that

Water Craft had proven its claims for detrimental reliance and fraudulent

misrepresentations, but that Mercury had not violated the Robinson-Patman

Act. Water Craft I, 361 F. Supp. 2d at 526–27. Additionally, the court ruled that

Mercury could recover damages for its counterclaims. Mercury appealed and we

affirmed the Robinson-Patman ruling, but declined to consider the state law

questions for procedural reasons. Water Craft II, 457 F.3d at 487.

1

On remand, the district court held a third bench trial to determine

damages. Although Water Craft sought millions in damages, the trial court

determined that Water Craft had failed to present evidence supporting its

damage estimates. The trial court awarded the dealership $50,050, the value of

a note Glascock had borrowed to keep the store open. Then, the district court

awarded $200,000 to Martrain, and $250,000 to Glascock, individually, for pain

and suffering, humiliation, and anxiety. The district court denied Water Craft’s

claim for attorney’s fees in connection with its fraudulent misrepresentation

The state law claims were not properly before us because the trial court had not 1

entered a final judgment for those claims. Water Craft Mgmt. L.L.C. v. Mercury Marine, 457

F.3d 484, 487 (5th Cir. 2006) (Water Craft II).

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claim. The court awarded Mercury damages for Water Craft’s unpaid

merchandise accounts. Both parties appeal the rulings and damage awards.

II

The parties have appealed virtually every aspect of the district court’s

ruling and amended judgment. We first consider the district court’s decisions

as to Mercury’s claims. Then, we turn to the counterclaims.

We review rulings of fact for clear error and legal conclusions de novo.

Water Craft II, 457 F.3d at 488 (citations omitted). We will reverse a ruling of

fact for clear error only when we have a “definite and firm conviction that a

mistake has been committed.” Id. Where a determination on the admissibility

of evidence involves a substantive legal decision, the standard of review is two

fold. Stokes v. Georgia.-Pacific Corp., 894 F.2d 764, 767 (5th Cir. 1990) (citations

omitted). First, we review the validity of the underlying legal analysis de novo.

Id. Then, we review the trial court’s evidentiary ruling for an abuse of

discretion. Id.

A

Water Craft contends that the district court erred by concluding the SSAs

were valid contracts, arguing that the marine dealership was fraudulently

induced to enter into the agreements. Mercury contends, however, that the

district court erred by ruling that Water Craft had proven detrimental reliance

and fraudulent misrepresentation.

1

Water Craft’s contentions regarding the SSAs’ validity depends on parol

evidence. Due to the binding integration clauses in the SSAs, the district court

2

In their briefs, the parties argue at length whether the district court erred by 2

admitting and considering parol evidence. We do not address these arguments, however,

because neither party appealed the court’s interpretation of the SSAs’ terms. Therefore, other

than our consideration of parol evidence in this section, it is unnecessary to analyze the

district court’s various evidentiary rulings.

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declined to consider preliminary discussions between the parties that occurred

prior to the first SSA’s execution. Water Craft contends that had the district

court considered these agreements as part of the contract, the court would have

found the representations fraudulent and then, Water Craft’s consent to the first

SSA would have been “vitiated, rendering the agreement null.”

In Louisiana, a court may not consider parol evidence to alter the terms

of a “written agreement when the contract is a complete and accurate statement

of all the terms agreed upon by the parties.” Stokes v. Georgia-Pacific Corp.,

894 F.2d 764, 768 (5th Cir. 1990); see also LA. CIV. CODE ANN. art. 2046 (2010).

A contract’s integration clause does not automatically bar consideration of parol

evidence, but if an agreement contains such an integration clause, we must

examine the facts and the contract’s substance to determine whether the

agreement properly reflected the parties’ intentions. Omnitech Int’l, Inc. v.

Clorox Co., 11 F.3d 1316, 1328 (5th Cir. 1994); Condrey v. Suntrust Bank of Ga.,

429 F.3d 556, 564 (5th Cir. 2005). Admission of parol evidence may be based on

an allegation of fraud or misrepresentation. Bass v. Coupel, 671 So.2d 344, 353

(citing Billingsley v. Bach Energy Corporation, 588 So.2d 786, 790 (La. Ct. App.

1991). But “the mere admissibility of oral statements does not require an

automatic finding that the statements” will vary or nullify a contract. Bass, 671

So.2d at 353. Rather, in Louisiana, the party alleging fraud must “produce

competent evidence, sufficient to preponderate on a showing that the statements

he now seeks to introduce into evidence were fraud.” Id. If a court decides to

admit the parol evidence, the trier of fact will then determine whether fraud was

committed “based on [the court’s] decision to give substantive weight to the parol

evidence admitted.” Id.

Here, Water Craft alleges that the preliminary discussions with Mercury

fraudulently induced them to sign the first SSA. The evidence, however, does

not show that Mercury officials misrepresented or omitted accurate information,

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a requirement for fraud. Taylor v. Dowling Gosslee & Assoc., Inc., 22 So.2d 246,

255 (La. Ct. App. 2009). The record shows that preliminary discussions about

discounts and pricing amounted to promises for future conduct. While Mercury

representatives may have stated that the motor manufacturer would offer

discounts, representatives also stated that the special pricing programs would

take three to four years to implement. Thus, these agreements do not suffice as

evidence of fraud because fraud “cannot be predicated on unfulfilled promises or

statements as to future events.” Dutton & Vaughan, Inc. v. Spurney, 600 So.2d

693, 698 (La. Ct. App. 1992). Further, Water Craft closed the marine dealership

within two years of opening, making it impossible for Mercury to fulfill the

pledges within the promised time period. And, Water Craft failed to put forth

evidence that demonstrated Mercury did not intend to perform the pledges at the

time the pledges were made. Id. at 698. Because Water Craft cannot prove the

statements in question were fraudulent, the dealership cannot demonstrate that

they were fraudulently induced to enter into the valid and binding SSA.

3

2

Mercury asserts several meritorious arguments as to why the district court

erred by concluding that Water Craft had proven its detrimental reliance claim.

It is unnecessary, however, to address these arguments because we find that

Water Craft’s reliance on the discussions was unreasonable as a matter of law.

To establish detrimental reliance, a party must prove by a preponderance

of the evidence: “(1) a representation by conduct or word; (2) made in such a

manner that the promisor should have expected the promisee to rely upon it; (3)

justifiable reliance by the promisee; and (4) a change in position to the

 Water Craft also asserts that the second SSA was “null for lack of consent.” Under 3

Rule 28 of the Federal Rules of Appellate Procedure, we decline to reach the merits of this

argument because Water Craft’s briefing on the matter lacks citations to any legal authority. 

Alameda Films SA de CV v. Authors Rights Restoration Corp., Inc., 331 F.3d 472, 483 & n. 34

(5th Cir. 2003).

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promisee’s detriment because of the reliance.” In the Matter of Ark-La-Tex

Timber Co., Inc., 482 F.3d 319, 334 (5th Cir. 2007); see also LA. CIV. CODE ANN.

art. 1967 (2010). Courts may determine that a party’s reliance on promises

made outside of an unambiguous, fully-integrated agreement was unreasonable

as a matter of law. Drs. Bethea, Moustoukas, and Weaver LLC v. St. Paul

Guardian Ins. Corp., 376 F.3d 399, 403-04 (5th Cir. 2004); Omnitech, 11 F.3d at

1330. Contrary to both parties’ assertions, a detrimental reliance claim does not

require a determination of whether we should or should not consider parol

evidence. Instead, we focus on the reasonableness of a party’s professed reliance

upon promises made outside the scope of a “fully-integrated written agreement”

between the parties. Omnitech, 11 F.3d at 1329-30.

Water Craft’s reliance on the oral agreements was unreasonable as a

matter of law because the SSAs are unambiguous written contracts with welldefined terms and valid integration clauses. See Omnitech, 11 F.3d at 1330; see

also LaBarge Pipe & Steel Co. v. First Bank, 550 F.3d 442, 464 (5th Cir. 2008)

(holding that company with “vast experience” unreasonably relied on bank

employee’s statement that directly contradicted terms of bank’s financing letter).

Glascock and Martrain were knowledgeable marine dealers with decades of

business experience. Both men had previously executed contracts with motor

manufacturers. Further, Glascock had extensive dealings with Mercury as his

previous stores were Mercury dealerships and he had participated on the

Mercury dealer council. In light of this, the district court erred by concluding

that Water Craft had reasonably relied on statements made by Mercury

representatives. These conversations fell outside of the terms of the

straightforward contracts, which detailed Mercury’s pricing program and the

parties’ non-exclusive relationship. The contract also defined the integration

clause, stating that all prior agreements were merged into the SSAs, which could

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only be modified with a signed writing. Water Craft’s professed reliance on the

oral discussions, instead of the written agreements, was unreasonable.

3

Mercury argues that Water Craft failed to prove its misrepresentation

claim and that the district court erred by awarding individual damages to

Glascock and Martrain for this claim. We agree.

Before trial, Mercury submitted a motion for partial summary judgment,

arguing that Water Craft’s negligent and intentional misrepresentation claims

failed as a matter of law. The trial court agreed, and granted summary

judgment on tortious misrepresentation. We interpret this ruling to include both

the negligent and intentional misrepresentation claims.

At trial before remand, the district court stated that it had “previously

dismissed all tortious misrepresentation claims,” then, the court stated it still

had to decide “whether Mercury made fraudulent misrepresentations to the

plaintiffs which caused plaintiffs to sustain damages.” The court noted that a

fraudulent misrepresentation claim could be brought in a contract action. But,

instead of discussing the elements for misrepresentation in contract, the court’s

ruling defined the claim by relying on the elements used in a tortious

misrepresentation claim. And, the court’s subsequent analysis failed to discuss

4

how the alleged misrepresentations involved issues of contract formation. The

district court was free to conclude that Water Craft had proven

The district court’s ruling relied on Abell v. Potomac Ins. Co., in which we discussed

4

Louisiana’s standard for fraudulent misrepresentation in tort. 858 F.2d 1104, 1131 n. 33. For

an action for fraud against a party to a contract a claimant must prove: 1) misrepresentation

of true information; 2) the intent to obtain an unjust advantage or to cause damage to another;

and 3) “the error induced by a fraudulent act must relate to a circumstance substantially

influencing the victim’s consent to (a cause of) the contract.” Shelton v. Standard/700

Associates, 798 So.2d 60, 64 (La. 2001). The trial court’s analysis failed to mention the third

element.

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misrepresentation in tort, but it could only do so if that court had reversed and

vacated its summary judgment decision. That did not occur here.

When the district court amended its final judgment after trial, the new

judgment compounded the error. Initially, the district court had awarded

individual damages to Glascock and Martrain based on their “pecuniary losses

of pain and suffering, humiliation, and anxiety.” Five months later, the court

stated in the amended judgment that Water Craft’s “state law tortious

misrepresentation claim” was dismissed with prejudice, but then, the court

awarded individual damages to Glascock and Martrain for their state law

“misrepresentation claims, and their fraud claim sounding in tort.”

Under Louisiana law, damages for contract-related claims are limited to

pecuniary losses, unless a contract is intended to “gratify a nonpecuniary

interest.” LA. CIV. CODE art. 1998; see also Nolan v. Commonwealth Nat’l Life

5

Ins. Co., 688 So.2d 581, 584-5 (La. Ct. App. 1996). A sales contract for boat

motors does not qualify as a “nonpecuniary interest.” Therefore, in this contract

dispute, the district court erred by awarding individual damages for pain and

suffering. Pinero v. Jackson Hewitt Tax Serv. Inc., 594 F. Supp. 2d 710, 717-18

(E.D. La. 2009) (holding that contract to prepare a tax return did not constitute

an agreement for a nonpecuniary interest, thus, plaintiff could not recover

emotional damages for the breach of contract claim).

Further, Glascock and Martrain could not obtain individual damages for

Water Craft’s misrepresentation claim because a corporate officer “has no

separate or individual right of action against third persons . . . for wrongs

committed against or causing damages to the corporation.” Glod v. Baker, 851

Comments to article 1998 state that “a contract made for the gratification of a

5

nonpecuinary interest means one intended to satisfy an interest of a spiritual order such as

a contract to create a work of art, or a contract to conduct scientific research, or a contract

involving matters or sentimental value.” LA. CIV. CODE art. 1998.

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So. 2d 1255, 1264 (La. Ct. App. 2003); see also L & L Industries, Inc. v.

Progressive National Bank, 535 So. 2d 1156, 1158 (La. Ct. App. 1988)). Water

Craft alleged that Mercury had lied about motor pricing programs, product

discounts, and Mercury’s relationship with a competing dealership. The

purported acts were directed toward the company, not Glascock and Martrain.

Accordingly, under Louisiana law, the award of individual damages to

Glascock and Martrain is prohibited.

6

B

The district court awarded damages to Mercury for unpaid merchandise

ordered by Water Craft and Boating Centres, Inc., a marine dealership owned

by Glascock in Slidell, Louisiana. Water Craft and Glascock argue that the

district court erred because the debts were due to Mercury’s fraudulent

misrepresentations. We do not consider this meritless argument because Water

Craft failed to provide any facts or case law to support the assertion. See Fed.

R. App. P. 28. The record also demonstrates that Water Craft failed to present

evidence that contradicted Mercury’s claims about the unpaid bills. Therefore,

the district court did not err by awarding damages to Mercury for its

counterclaims.

III

We REVERSE the district court’s judgment as to Water Craft’s claims of

detrimental reliance and fraudulent misrepresentations, and we VACATE the

damage awards to Water Craft, Glascock, and Martrain. We AFFIRM the

judgment and award of damages to Mercury.

 Water Craft also argues that they are entitled to attorney’s fees under article 1958

6

of the Louisiana Civil Code for this claim. Due to our holdings, however, Water Craft’s

assertion is moot.

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