* Circuit Judge of the United States Court of Appeals for the Eighth

Circuit, sitting by designation.

** Pursuant to 5 T H C IR

. R. 47.5, the court has determined that th i s

opinion s h ould not be published and is not precedent except under the limited

circumstances set forth in 5 TH C IR . R. 47.5.4. United States Court of Appeals

Fifth Circuit



## FILED

February 25, 2004

Charles R. Fulbruge III

Clerk UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_______________________

No. 02-41373

_______________________

WALSH HEALTHCARE SOLUTIONS INC.,

Plaintiff-Counter Defendant-Appellee/Cross-Appellant,

versus

AMERISOURCE CORPORATION,

Defendant-Counter Claimant-Appellant/Cross-Appellee.

Appeals from the United States District Court

for the Eastern District of Texas

No. 5:00-CV-135

Before JONES, MAGILL * and SMITH, Circuit Judges.

PER CURIAM: **

Walsh Healthcare Solutions, Inc. (“Walsh”) sued

AmeriSource Corporation (“AmeriSource”) seeking lost profits under

Department of Vet eran Affairs (“VA”) pharmaceutical prime vendor

(“PPV”) contracts

. Both Walsh and AmeriSource appeal the district

court’s order granting and denying various portions of each party’s

motion for summary judgment. Because the express terms of a1 Walsh received the PPV contract as part of a small-business set-aside

program.

2 settlement agreement entered into by the parties bars each claim

raised by Walsh and AmeriSource, we reverse and remand.

BACKGROUND

In 1993, Walsh and AmeriSource separately ent ered into

PPV contracts with the VA. AmeriSource’s PPV contract covered

several geographic regions, while Walsh’s PPV contract covered only

the South Central region. 1 The contracts both lasted for one year,

with four optional one-year extensions. Because the VA invoked all

the extensions, the contracts were set to expire in September 1998.

Approxima tely one year after the parties entered into

their PPV contracts, the VA introduced a new mail-order

prescription refill system. Rather than having out-patient pharmacies fill these prescriptions, the VA formed a network of

government-run Consolidated Mail Outpatient Pharmacies (“CMOPs”) to

handle all mail-order prescription refills. The medical facilities

in the South Central region, which belonged to Walsh under its PPV

contract, were assigned to CMOPs in AmeriSource’s territory. As a

result, AmeriSource became the sole CMOP supplier in the South

Central region and Walsh lost a significant portion of the business

for which it had contracted.

In December 1995, Walsh and AmeriSource signed a letter

agreement (“December Agreement”), which provided that Walsh would

supply certain “mainstream” pharmaceuticals to one particular CMOP3

on a regular basis and act as a back-up supplied to other CMOPs.

The parties hoped that the arrangement would allow Walsh to recover

its lost sales volume. By November 1996, however, Walsh claimed an

$8.5 million deficit. As a result, AmeriSource agreed to compensate Walsh for its lost profits, which would be calculated based on

an agreed-upon formula. Walsh began submitting invoices to

AmeriSource on a regular basis, and AmeriSource paid each invoice

in full, though the payments were sometimes delayed.

As the PPV contract term neared its end, the VA realized

it was not prepared to enter into new PPV contracts and signed onepage interim contracts (“First Interim Contract”) with both Walsh

and AmeriSource. The First Interim Contracts were set to expire in

March 1999. During the First Interim Contract term, Walsh cont inued to submit invoices to AmeriSource. In fact, AmeriSource

paid Walsh $394,161 for the period of October to December 1998.

Walsh later sought compensation in the amount of $404,481 for the

period of January to March 1999, which AmeriSource never paid.

Meanwhile, on December 28, 1998, the VA awarded a new PPV

contract to AmeriSource tha t covered the entire country. Walsh

filed a bid protest with the General Accounting Office (“GAO”) on

January 19, 1999, and argued that the VA had failed to adhere to

the proper procedures when awa rding the new PPV contract. As a

result of the bid protest, the VA entered into a second set of

interim contracts (“Second Interim Contracts”) with Walsh and4

AmeriSour ce that would last until June 30, 1999. The GAO ultimately denied Walsh’s bid protest on April 28, 1999.

In May 1999, Walsh filed suit against the VA in federal

district court. AmeriSource intervened in the suit as a defendant

to protect the contract award. In July 1999, Walsh, AmeriSource,

and the VA entere d into a settlement agreement that accomplished

the following: (1) Walsh’s Second Interim Contract with the VA

would be extended an additional 92 days and would end in September

1999; (2) AmeriSource’s new PPV contract would become effective on

October 1, 1999; and (3) the parties entere d into a release of

claims.

In April 2000, Walsh sued AmeriSource in Texas state

court, claiming that AmeriSource failed to compensate it for lost

profits through March 1999, relying on theories of express and

implied contract, third-party beneficiary status, and promissory

estoppel. AmeriSource removed the case to federal district court

and filed conversion and unjust enrichment counterclaim s for

$394,161, which AmeriSource alleged it mistakenly paid to Walsh for

lost profits from October to December 1998. Walsh then amended its

complaint to add a claim for lost profits through September 1999,

when the Second Interim Contract expired.

On cross motions for summary judgment, the district court

held that (1) the settlement agreement did not preclude the

parties’ claims; (2) the December Agreement between Walsh and

AmeriSource expired in September 1998; and (3) the parties’ actions2 The district court denied Walsh’s motion for summary judgment for the

period of the Second Interim Contract and its extension to September 1999.

5 gave rise to an implied contract throughout the duration of the

First Interim Contract. The district court denied Walsh’s motion

for summary judgment on express contract grounds, but granted

Walsh’s motion on implied contract grounds only for the period of

October 1998 to March 1999. 2 Thus, AmeriSource owed Walsh its lost

profits of $404,481 for the second half of the First Interim

Contract term, or January to March 1999, plus attorneys’ fees.

Consequently, AmeriSource’s cross-motion for summary judgment for

conversion and unjust enrichment was denied. Finally, the district

court denied Walsh’s motion for summary jud gment on promissory

estoppel. Both parties appealed.

DISCUSSION

We review de novo a district court’s decision to grant or

deny summary judgment. P atterson v. Mobil Oil Corp.

, 335 F.3d 476,

487 (5th Cir. 2003). “Under Texas law, summary judgment may be

granted if the terms of a cont ract are not ambiguous, such that

they ‘can be given a certain or definite legal meaning or

interpretation.’” Petula Assocs., Ltd. v. Dolco Packaging Corp.

,

240 F.3d 49 9, 502 (5th Cir. 2001) (quoting C oker v. Coker

, 650

S.W.2d 391, 393 (Tex. 1983)). A district court’s interpretation of

an unambiguous contract is a question of law subject to de novo

review. Guidry v. Halliburton Geophysical Servs., Inc. , 976 F.2d

9 38, 940 (5th Cir. 1992). Because a settlement agreement is a3 AmeriSource candidly states that, should this court accep t its

argument, its claims for conversion and unjust enrichment would also be precluded

by the settlement agreement.

6 contract, its interpretation is also subject to de novo review.

Id

.

AmeriSource argues that the plain language of the

settlement agreement prevents the parties from asserting the claims

in this suit. 3 Conversely, Walsh argues that the settlement

agreement was never intended to preclude claims pertaining to the

First Interim Contract. The settlement agreement, signed by Walsh

and AmeriSource as well as the government, provides that

Any and all damages, expenses, costs and/or attorney fees

of any kind arising from or associated with the bidding

on the solicitation at issue, the award, the protest, the

proceedings before the VA, the proceedings befo re the

GAO, the extensions of Walsh’s contract

, the de lay in

implementation of the AmeriSource contract, and this

court action, shall be borne by the party incurring the

same

. . . . This release specifically includes, but is

not limited to, any claims for lost profits, bid

preparation costs, attorneys fees and expenses relating

to any administrative or judicial proceedings . . . .

(emphasis added). Finally, the settlement agreement contains a

release, which states that

Each party he reby releases and forever discharges each

and every other party from any claims, demands, or causes

of action which were asserted or which could have been

asserted in this suit and/or the underlying

administrative proceedings, it being the intention of the

parties that any and all issues concerning the bidding,

solicitation and the awarding of the contract at issue

. . . be and hereby are put to rest.

The district court interpreted Texas law to require the

settlement agreement to “mention” the claim being released. The7

court accordingly held that the settlement agreement pertained only

to the “extension of the VA’s PPV contract with Walsh.” The

court’s statement alone mischaracterizes Texas release law. As we

have previously noted, “[w]e are satisfied that ‘mentioning’ does

not require particularized enumeration or detailed description,

only that the claim being released come within the express

contemplation of the release provision when viewed in conte xt of

the contract in which the release provision is contained . . . .”

Stinnett v. Colo. Interstate Gas Co. , 227 F.3d 247, 255 (5th Cir.

2000) (citing Mem’ l Med. Ctr. of E. Tex. v. Keszler , 943 S.W.2d

433, 435 (Tex. 1997); V ictoria Bank & Trust Co. v. B rady , 811

S.W.2d 931, 938-39 (Tex. 1991); Keck, Mahin & Cate v. Nat’l Union

Fire Ins. Co. of Pittsburgh , 20 S.W.3d 692, 698 (Tex. 2000)).

In this case, several factors indicate that the

settlement agre ement and release cover the period beginning in

October 1998 with the First Interim Contract and continuing through

the end of the Second Interim Contract in September 1999. First,

the settlement agreement specifically mentions the “extensions” of

Walsh’s contract. Walsh argues that “extensions” merely refers to

the settlement agreement’s 92-day extension of the Second Interim

Contract. However, this argument is belied by Walsh’s express

contract theory. Walsh argues separately to this court that the

December Agreement between AmeriSource and Walsh was expressly

incorporated into both the First and Second Interim Contract, and

therefore, that AmeriSource should be forced to compensate Walsh8

for its lost profits through September 1999. This argument

implicitly assumes that the First and Second Interim Contracts are

seamless extensions of Walsh’s PPV contract. We are persuaded that

t he term “extensions” in the settlement agreement refers to e ach

extension of Walsh’s contract, including the First Interim

Contract.

Second, the settlement agreement releases “causes of

action which were asserted or which could have been asserted in

this suit.” When AmeriSource intervened in the suit between Walsh

and the VA, both parties had an opportunity to assert the causes of

action now raised in this suit. Walsh sent AmeriSource an invoice

for the January to March 1999 period in June 1999, one month after

initiating its suit a nd one month before signing the settlement

agreement. Thus, Walsh could have asserted its claim for those

lost profit s against AmeriSource. In addition, summary judgment

evidence illustrates that executives at AmeriSource became aware of

their allegedly mistaken payment to Walsh in January 1999. Thus,

this claim also existed and could have been asserted.

CONCLUSION

Because the s ettlement agreement entered into by Walsh

and AmeriSource covers the period of time beginning with the First

Interim Contract in October 1998 and extending through September

1999, the parties’ claims in this case are barred. Consequently,

we R EVERSE the district court’s denial of AmeriSource’s summa r y9

judgment motion with respect to the settlement agreement, REVERSE

the district court’s award of lost profit to Walsh for the period

of January to March 1999, REVERSE the award of attorney’s fees to

Walsh, and REMAND the case for entry of take-nothing judgment for

both parties.

REVERSED and REMANDED

.