IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 18-30970

BANK OF THE WEST, 

 Plaintiff - Appellee Cross-Appellant

v.

DANNY K. PRINCE, 

 Defendant - Appellant Cross-Appellee

Appeals from the United States District Court 

for the Western District of Louisiana

Before HIGGINBOTHAM, SMITH, and SOUTHWICK, Circuit Judges.

PATRICK E. HIGGINBOTHAM, Circuit Judge:

Bank of the West and Danny K. Prince cross-appeal the district court’s 

damages award in this breach-of-contract suit. We agree with the district court 

that the liquidated damages provision of the parties’ contract is unenforceable 

because it contravenes the Louisiana Lease of Movables Act. However, we hold 

that the district court erred by basing its alternative damages calculation on 

the expectations of the lessor’s assignee, Bank of the West, rather than those 

of the original lessor, Summit Funding Group. We therefore affirm the district 

court’s holding that Bank of the West was not entitled to contractual liquidated 

damages, but we vacate the district court’s alternative damages award and 

remand for recalculation. 

United States Court of Appeals

Fifth Circuit

FILED

November 12, 2019

Lyle W. Cayce

Clerk

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I.

In May 2014, Gladiator Energy Services, LLC1 leased a trailer-mounted 

frac unit (“the Equipment”) from Summit Funding Group, Inc. Danny K. Prince 

and Steven Cloy Gantt personally guaranteed the Lease on behalf of Gladiator.

The Lease, which was to last until November 2018, set a base rent of just under

$20,000 per month. It provided that, in the event of default, Summit could

exercise one or more of a range of remedies, including:

(iv) recover from Lessee all accrued and unpaid amounts, (v) 

recover from Lessee, as liquidated damages for loss of bargain and 

not as a penalty, the present value of all amounts to be paid by 

Lessee for the remainder of the Firm Term, or any successive 

period then in effect, discounted at the rate of 2% per annum, 

which amount will become immediately due and payable, (vi) 

demand that Lessee return the Equipment in strict compliance 

with the terms hereof . . . (xi) recover from Lessee all amounts 

incurred by Lessor in enforcing its rights and remedies hereunder, 

including, but not limited to, Lessor’s repossession costs . . . 

reasonable attorneys’ fees, and reasonable internal costs . . . .

Summit subsequently assigned its interest in the lease to Bank of the West 

through a nonrecourse promissory note for $832,147.91. In February 2016, 

Gladiator defaulted on the lease by failing to make its monthly payment. In 

July 2016, Gladiator voluntarily surrendered the Equipment to the Bank at 

Gladiator’s facility in Arcadia, Louisiana. The Bank then sold the Equipment

at auction for $320,964.00.

On July 26, 2016, the Bank sued Prince and Gantt to recover the 

remaining amount due under the lease, plus costs and attorneys’ fees. The case 

against Gantt was stayed when he filed for bankruptcy in September 2016, so 

only Prince participated as a defendant in the litigation. In July 2017, the 

 

1 Originally a Louisiana limited liability company, Gladiator subsequently converted 

to a Texas limited liability company before ceasing operations altogether. 

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district court granted the Bank’s motion for summary judgment as to Prince’s 

liability but denied it as to damages, finding the Bank’s evidence “insufficient 

. . . to determine the amount of the debt.” Shortly thereafter, Prince obtained 

new counsel and the Bank filed an amended complaint. The district court 

denied the parties’ cross-motions for summary judgment in January 2018 and 

ordered additional briefing on damages.

The parties agreed that Prince owed past-due rent of $118,916.46. 

However, they disagreed about what else, if anything, the Bank was entitled 

to collect. The Bank contended that Prince also owed contractual liquidated 

damages, defined by the Lease as the full amount of future rental payments

discounted to present value at a rate of two percent per annum. After 

subtracting the proceeds of the Equipment sale, the Bank calculated its 

contractual liquidated damages at $333,628.79.2 Prince argued that the 

Lease’s liquidated damages clause was invalid under the Louisiana Lease of 

Movables Act (“LLMA”), so he should be held accountable only for the agreedupon sum of past-due rent.3 

The district court agreed with Prince in part, holding that the LLMA

barred the Bank from both repossessing the Equipment and recovering 

accelerated rent. However, the court reasoned, “some award of reasonable 

damages” was still warranted. It therefore set out to determine an appropriate 

figure on its own. It started with what it termed the Bank’s “initial 

investment”—the $832,147.91 the Bank had loaned Summit in exchange for 

Summit’s assignment of the Lease. Reasoning that the liquidated damages 

award should approximate the Bank’s loss, the court calculated as follows:

 

2 At the time of Gladiator’s default, it still owed 34 monthly payments of 

approximately $20,000 each. 

3 See LA. STAT. ANN. § 9:3318.

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Bank’s Initial Investment $832,147.91

Lease Payments Made ($237,832.92)

Proceeds from Equipment Sale ($320,964.00)

Past Due Rent Owed ($118,916.46)

Total $154,434.53

Thus, in addition to past-due rent and attorneys’ fees, the district court 

awarded the Bank $154,434.53 in liquidated damages—far less than it sought 

under the Lease but far more than Prince conceded he owed. These crossappeals followed. 

II.

A.

We review “a grant of summary judgment de novo, applying the same 

standard as the district court.”4 “Summary judgment is called for only ‘if the 

movant shows there is no genuine dispute as to any material fact and the 

movant is entitled to judgment as a matter of law.’”5

B.

The LLMA “applies to all leases of movable property located in” 

Louisiana.6 It provides that in the event of default by the lessee, the lessor may 

either (1) sue “to recover accelerated rental payments and additional amounts 

that are then due and outstanding and that will become due in the future over 

 

4 Kinsale Ins. Co. v. Georgia-Pacific, LLC, 795 F.3d 452, 454 (5th Cir. 2015) (quoting 

Martco Ltd. P’ship v. Wellons, Inc., 588 F.3d 864, 871 (5th Cir. 2009)).

5 Deshotel v. Wal-Mart La., LLC, 850 F.3d 742, 746 (5th Cir. 2017) (quoting FED. R.

CIV. P. 56(a)).

6 Walnut Equip. Leasing Co., Inc. v. Moreno, 643 So. 2d 327, 330 (La. Ct. App. 1994). 

The parties agree that the LLMA governs this case. The Lease purports to select Ohio law, 

but that clause is invalid under the LLMA. See LA. STAT. ANN. §§ 9:3303(F)(1)–(2) 

(invalidating “leases of movable property . . . in which the lessee consents to the jurisdiction” 

or venue of another state); see also Ha Thi Le v. Lease Fin. Grp., LLC, 2017 WL 2915488, at 

*4 (E.D. La. May 9, 2017) (“Louisiana has a strong public policy against the inclusion of forum 

selection clauses in leases of movables . . . located in Louisiana.”).

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the full base term of the lease”; or (2) cancel the lease, repossess the leased 

property, “and recover such additional amounts and liquidated damages as 

may be contractually provided under the lease agreement.”7 The statute 

expressly states that its remedies “are not cumulative in nature.”8 In other 

words, “[t]he lessor may not seek to collect accelerated rental payments under 

the lease and also to cancel the lease and recover possession of the leased 

equipment.”9

In any case, a court may “award liquidated damages to the lessor only if 

it finds the amount thereof to be reasonable.”10 If the court finds the 

contractual liquidated damages “unreasonable, or if there is no such 

stipulation, then the court may, in its discretion, award liquidated damages to 

the lessor.”11 In short, regardless of the language of the parties’ contract, a 

lessor has a “right to recover liquidated damages” only “to the extent the court 

finds them reasonable.”12

Of course, even when a court elects to create its own liquidated damages 

award, it must still follow Louisiana law. Louisiana Civil Code Article 1995, 

which governs damages in breach-of-contract cases, provides that “[d]amages

are measured by the loss sustained by the obligee and the profit of which he 

has been deprived.”13 In other words, a “stipulated damage clause should 

reasonably approximate the lessor’s loss and profits [but] should not be 

 

7 LA. STAT. ANN. §§ 9:3318(A)(1)(a)–(b).

8 Id. § 9:3318(A)(2).

9 Id.; see Express Blower, Inc. v. Earthcare, LLC, 410 F. App’x 742, 747 & n.11 (5th 

Cir. 2010) (unpublished) (per curiam).

10 LA. STAT. ANN. § 9:3325(A).

11 Id. § 9:3325(B).

12 Ouachita Equip. Rental Co., Inc. v. Baker Brush Co., Inc., 388 So. 2d 477, 480 (La. 

Ct. App. 1980). 

13 LA. CIV. CODE ANN. art. 1995.

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penal.”14 This Court reviews the “imposition of liquidated damages . . . for 

abuse of discretion.”15

III.

A.

As noted above, the LLMA requires lessors to choose between two

exclusive sets of remedies: (1) cancelling the lease and collecting accelerated 

rental payments, or (2) repossessing the property and collecting liquidated 

damages.16 “Any provision of a lease agreement to the contrary 

notwithstanding, the lessor is allowed to select one remedy or the other, but he 

is not allowed to cumulate both.”17 In the event of default, the Summit Lease 

provides for liquidated damages of “the present value of all amounts to be paid 

by [Gladiator] for the remainder of the” Lease term. By defining liquidated 

damages in terms of future rental payments, the Lease straddles the line 

between the LLMA’s two exclusive remedial classes: Whereas the statute 

prohibits lessors from pursuing both repossession and accelerated rent, the 

Lease provides for just that combination of remedies, albeit under the label of 

liquidated damages. We must decide whether the Lease’s liquidated damages 

provision is enforceable despite its apparent conflict with the governing 

statute.

 

14 Am. Leasing Co. of Monroe, Inc. v. Lannon E. Miller & Son, Gen. Contracting, Inc., 

469 So. 2d 325, 328 (La. Ct. App. 1985). 15 Dacar v. Saybolt, 914 F.3d 917, 924 (5th Cir. 2018). 

16 LA. STAT. ANN. § 9:3318(A)(2); see Gen. Elec. Capital Corp. v. Se. Health Care, Inc., 

950 F.2d 944, 953 (5th Cir. 1991) (noting that there are “only two options available” to lessors 

under the LLMA).

17 Gen. Elec., 950 F.2d at 953; see also Day Leasing & Ins., Inc. v. Hart, 619 So. 2d 114, 

117 (La. Ct. App. 1993) (“[I]f the lessor recovers possession of the leased movable, then his 

remaining remedy is for past-due rent and liquidated damages; by recovering the property, 

a lessor waives his right . . . as to accelerated rentals . . . .”).

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The Bank claims the Lease’s language is consistent with the second set 

of remedies under the LLMA.18 After all, the Lease does not call for

repossession and accelerated rental payments; it calls for repossession and 

liquidated damages in the amount of accelerated rental payments discounted 

to present value. The Bank disclaims any attempt to circumvent the LLMA—

although “based on future rental payments, [the contractual liquidated 

damages provision] is not accelerated rent but a means of calculating the loss 

of an expected return on investment” for the Bank. Thus, the Bank argues, we 

should hold the Lease fully enforceable or, “[a]t a very minimum, . . . affirm the 

District Court’s award” of reduced liquidated damages. The Bank emphasizes 

that the parties freely bargained for the remedial provision, and it attempts to 

distinguish the Lease’s liquidated damages provision from accelerated rent on 

the ground that the Lease imposes a two percent discount.

In Prince’s view, the present-value discount is immaterial: The Lease

contravenes the LLMA by defining liquidated damages—a remedy available 

only under the second set of statutory remedies—as the total of all future 

rental payments, a sum available only under the first set of remedies. 

Moreover, neither arms-length bargaining nor artful drafting can create an 

exception to a governing statute.19

We agree with Prince and the district court that following “the formula 

provided in the Lease for calculating liquidated damages” would “circumvent 

Louisiana law.” The LLMA “means what it says”: a lessor must choose one of 

the statute’s two categories of relief—he cannot have both. Because the Lease’s 

liquidated damages provision would allow the Bank to evade the statutory 

 

18 LA. STAT. ANN. § 9:3318(A)(1)(b).

19 See Gen. Elec., 950 F.2d at 954 n.22 (“Section 3318(A)(2) of the [LLMA], prohibiting 

the lessor from both collecting all future rental and terminating the lease and re-possessing 

the lease property, reflects Louisiana public policy and thus cannot be varied by the 

contract.”). 

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prohibition on cumulative remedies, the district court did not abuse its 

discretion in finding it unreasonable.

We are not persuaded by the Louisiana appellate decisions the Bank 

cites, which are subordinate to the LLMA under Louisiana’s civilian 

methodology.20 The Bank is correct that in Cenval Leasing Corp. v. Nunnery, 

the appellate court appears to have allowed the lessor to recover possession of 

a leased car and the remaining balance on the lease.21 Without discussing the 

tension between its result and the LLMA’s prohibition on cumulative remedies, 

the court determined that the damages award was not unreasonable because 

it followed the lease provision.22 However, “in Louisiana, courts must look first 

and foremost to the state’s ‘primary sources of law: the State’s Constitution, 

codes, and statutes.’”23 Not only is the Cenval court’s decision “a secondary law 

source in Louisiana,”24 but it contravenes the plain text of the LLMA and other 

Louisiana cases finding that the LLMA does not permit cumulative recovery.25

The Bank also relies heavily on First National Bank of Lafayette v. 

Edwards,

26 which it cites for the proposition that a lessor may “recover future 

rentals for the remainder of the term of a lease of equipment as liquidated 

damages,” even if it has already “repossessed and sold the equipment.” The 

Bank overreads the case. The Edwards court determined only that the lessor 

could sue for liquidated damages, subject to the court’s reasonability 

 

20 See In re Katrina Canal Breaches Litig., 495 F.3d 191, 206 (5th Cir. 2007).

21 577 So. 2d 1042, 1045–46 (La. Ct. App. 1991).

22 Id. at 1046.

23 Am. Int’l Specialty Lines Ins. Co. v. Canal Indem. Co., 352 F.3d 254, 260 (5th Cir. 

2003) (quoting Prytania Park Hotel, Ltd. v. Gen. Star Indem., 179 F.3d 169, 175 (5th Cir. 

1999)). 

24 Prytania, 179 F.3d at 175. 

25 See, e.g., Gen. Elec., 950 F.2d at 953; Day Leasing, 619 So. 2d at 117; Am. Leasing, 

469 So. 2d at 329. 26 465 So. 2d 983 (La. Ct. App. 1985).

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determination.27 The trial court had calculated damages on an entirely 

separate basis, so the appellate court had no opportunity to opine on the 

reasonableness of awarding accelerated rent after a lessor has sold the 

equipment.28

In short, the plain language of the LLMA forbids a lessor from both 

repossessing leased equipment and collecting accelerated future rental 

payments. Because the Lease’s liquidated damages clause authorizes just this 

combination of remedies, the district court properly held it unenforceable. We, 

like the district court, “agree[] with Prince that lessors cannot be allowed to 

circumvent Louisiana law by simply including a lease provision allowing 

liquidated damages in the amount of future rent payments.”

B.

Because the Lease’s liquidated damages clause is invalid under the 

LLMA, it was proper for the district court to disregard the contractual 

provision and fashion its own award of liquidated damages.29 However, the 

question remains whether the court abused its discretion by using the incorrect 

baseline for its alternative calculation. Again, the district court began its 

calculation “by considering the Bank’s initial investment in the Lease”—the

$832,147.91 the Bank loaned Summit in exchange for Summit’s assignment of 

the Lease. The court then subtracted Gladiator’s pre-default rental payments, 

the proceeds of the Equipment sale, and the agreed-upon sum of past-due rent 

to reach its ultimate award of $154,434.53.

Prince argues that the district court erred by basing its calculation on 

the Bank’s lost investment rather than on Summit’s. As Prince points out, the 

original parties to the Lease were Summit and Gladiator; the Bank only 

 

27 Id. at 985.

28 Id. at 986.

29 LA. STAT. ANN. § 9:3325(B). 

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entered the picture later, when Summit assigned the Lease to the Bank.

Because damages are generally limited to the “loss of profits that were

contemplated or foreseen by the parties at the time of the agreement,”30 Prince 

argues, the district court should have considered only the expectations of 

Summit, the original beneficiary of the Lease. After all, the Bank merely 

“stands in the shoes of Summit.” Any loss the Bank suffered beyond past-due 

rental payments arose under the Bank’s separate nonrecourse note with 

Summit, not under the Lease with Gladiator.31

Prince is correct. Article 1995 of the Louisiana Civil Code provides that

“[d]amages are measured by the loss sustained by the obligee and the profit of 

which he has been deprived.”32 Summit was the original obligee in this case, 

so “the loss sustained by the obligee” is the amount that Summit would have 

lost in the event of a breach—in other words, the amount Summit expected to 

receive under the lease had no breach occurred. Instead, the district court 

 

30 Galloway v. Tenneco Oil Co., 313 So. 2d 317, 321 (La. Ct. App. 1975) (emphasis 

added). 

31 Prince further argues that the Bank is not entitled to any liquidated damages 

because its note with Summit was nonrecourse. Because the Bank had no recourse against 

Summit when Gladiator defaulted, Prince claims, Summit did not suffer any damage as a 

result of the default—and because the Bank stands in Summit’s shoes, it cannot recover 

damages either. Prince cites no case law to support this circular logic. Either the Bank’s 

damages are based on the pre-assignment expectations of Summit (as we hold), or they are 

based on the post-assignment expectations of the Bank itself (as the district court found). 

Prince cannot have it both ways. Damages cannot be determined by both Summit’s preassignment expectations and the Bank’s post-assignment remedies. In short, the promissory 

note limited the Bank’s remedies against Summit; it did not, and could not, limit Prince’s 

obligations under the Lease.

32 LA. CIV. CODE art. 1995; see Am. Leasing, 469 So. 2d at 328–29. At oral argument, 

counsel for the Bank pointed out that the district court did not take the Bank’s lost profits 

into account; it only attempted to get the Bank “back to zero,” i.e., the position it was in before 

it contracted with Summit. Although we reject the Bank’s argument that its own 

expectations, rather than Summit’s, were the proper starting point for the district court’s 

damages calculation, we acknowledge that Article 1995 contemplates damages for lost 

profits. Thus, on remand, the district court should consider not only what it would take to 

restore Summit to its status quo ante but also what profits Summit expected to make off its 

initial lease with Gladiator. 

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started with the Bank’s expectations under a different agreement—the 

promissory note it issued to Summit. However, the note did not confer on the 

Bank additional rights to payment that Summit had not possessed; it simply 

placed the Bank in Summit’s shoes. Thus, Summit’s expectations under the 

lease are the appropriate baseline from which to calculate damages. Because 

it is not clear from the record or the parties’ briefs how much Summit 

anticipated making on the original Lease, we must vacate in part and remand 

to allow the district court to recalculate its damages award.

IV.

The district court correctly ruled that Bank of the West is not entitled to 

contractual liquidated damages. We must, however, vacate its award of

alternative damages and remand for recalculation based on the expectations 

of the original lessor, Summit Funding Group, Inc.

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