### I N THE UNI TED STATES COURT OF APPEALS FOR THE FI F TH CI RCUI T

No. 12-20098

ARV OFFSHORE COMPANY, LIMITED, Plaintiff-Appellee
v. CON-DIVE, L.L.C., Defendant-Appellant

Appeal from the United States District Court for the Southern District of Texas USDC No. 4:09-CV-944

Before REAVLEY, PRADO, and ELROD, Circuit Judges. PER CURIAM: * This i s a breach of contract case. Appell a n t C on-Dive, L .L.C. was held liable for b reachi n g a s ubcontract with ARV Offshore Company to provide a

s a t u r ation dive s ystem, known as the Orca, to be u sed by ARV on a s u b s e a project in the Gulf of Thailand. As a result o f Con-Dive’s b reach, ARV had to procure s ubstit u t e v e s sels t o complete the work and incurred increased costs. Con-Dive appeals both the district court’s determination on summary judgment U n i t e d S t a te s C o u rt o f A p p e al s

F i f t h C i rc u i t 

### F I L E D February22, 2013 Ly l e W . Cay ce Clerk

* Purs uant to 5 T H C I R

. R. 47. 5, the court has determ ined that this op inion s hould not be p ublis hed and is not p reced ent excep t und er the lim ited circum s tances s et forth in 5 T H C I R

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that the par t i e s e n t e red i nto a binding contract and the court’s award of damages after a bench trial. For the following reasons, we AFFIRM. In June 2008, ARV a nd Con-Dive s igned a Letter of Award confirming an intent to c ontract for the Orca to be u sed on ARV’s p roj e c t i n the Gulf of T h a iland. The district c ourt held that the Letter o f Award, along with two attachments, constituted a binding agreement that contained a l l the e ssential elements of a contract. Con-Dive disputes this finding, a rguing that the parties

were s till negotiating and that the Letter of Award lacked the essential element of a payment guarantee. We review th e d istrict court’s grant of summary judgment d e novo,

a p p l ying the s ame standards as the district court. ACE Am. Ins. Co. v . M

- I , L.L.C. , 699 F.3d 826, 830 (5th C ir. 2 0 12). A valid contract under Texas law requires “(1) an offer; (2) an acceptance in strict compliance with t erms of [the] offer; (3) a meeting of the minds; (4) a communication that each party c o nsented to the terms of the contract; (5) exec u t i on a nd delivery of the contract with an intent it become mutual and binding on both parties ; a n d [6] c onsideration.” Adva n t a ge Physical T

herapy, Inc. v. Cruse , 1 65 S.W.3d 21, 24 (Tex. App.–Houston [ 14th D i s t .] 2005, no pet.). T o be l egally binding, the contract “must be sufficiently definite in its terms so that a court can understand what the promisor u ndertook.” T.O. Stanley Boot Co., Inc. v. Bank of El Paso , 847 S.W.2d 218, 221 (Tex. 1992). Here, the Letter of Award and i t s attachments contained all e ssential elements a nd was sufficiently definite t o b e u n derstood by the p arties as a binding co n t r a c tual agreement. The Letter of Award provided that Con-Dive would mobilize its Orca dive system and deliver i t to B u sh I ntercontinental Airport for transport to Singapore. It included terms for the mobilization fee to be p aid by ARV, the subsequent day rate that ARV would pay for e ach day that the system was in use, the time that the day rate w o uld commence, the scope of

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the work, and the expected duration of the contract. Although the parties intended for a f

ormal subcontract to replace the Letter o f Aw ard, which never occurred, t he agreement p rovided that the L etter of Award would govern the
p arties’ relationship until the subcontract was executed. The fact that the Lett e r of Award did not mention a payment guarantee does not preclude the existence

o f a v a l id contract because the record shows that ARV agreed to obtain th e guarantee, a nd ARV’s director testified without contradiction that ARV did get a guarantee from its bank before Con-Dive breached the agreement. The parties’ conduct after the Letter of Award was signed also reflected a belief that there was a v a lid contract. ARV chartered and paid for a cargo plane to transport the O rca to S ingapore, a nd Con-Dive thereafter acknowledged in an email that it would continue with plans to ship the Orca on the plane obtained by ARV. We conclude from the plain language of the L etter of Award, from what the parties said in their emails, and from the parties’ conduct in arranging transport for the Orca, that there was a meeting of the m i n d s o n a l l e ssential terms o f a contract. See Copeland v. Alsobrook , 3 S. W

. 3 d 598, 604 (Tex. Ap p . – S a n Antonio 1999, pet. denied) (“The determination of a meeting of t h e minds, and thus o ffer and acceptance, is based o n the objective standard of what the parties said and did and not on their subjective state of mind.”). Con-Dive argues in the alternative that even if a contract was formed, it did not breach the agreement because i t attempted to provide a substitute dive system. This argument is unavailing because Con-Dive’s terms for the substitute system were contrary to t h e o r i g inal agreement, a nd included a high e r m o bilization fee, a h igher d ay rate, a nd a n increase in the portion of transportation costs to be borne by ARV. T he d i s t r i c t c o urt did not err by concluding that t h e p arties entered into a valid contract and that Con-Dive breached the agreement by failing to provide the Orca, or a r e a s o nable substitute, on terms equivalent to the original agreement.

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Con-Dive next challenges the district c ourt’s c a lculation of d amages. ARV presented expert t estimony showing that h a d C o n-Dive provided the Orca, it would have used the Orca on a vessel called the NOR VALIANT and would have incurred costs of $10,646,996.40 to complete its project. I ts expert further established that ARV a c t u a lly incurred costs of $16,072,036.80 as a result of having to procure three substitute vessels on the open market at a higher price tha n ARV w o u l d have paid for the Orca/NOR VALIANT combination. In an effort to p lace ARV in as good an economic position as it would have b een in had Con- D i v e not breached the contract, th e district court awarded ARV the difference between its actual costs and its expected costs, or $5,425,040.40. Con-Dive’s primary argument is that ARV faile d to prove i ts damages because ARV’s expert did not account for reven u e that ARV received from chartering the three substitute v essels, and therefore ARV f a i l e d t o s h ow that it suffered a fi n a n c i a l loss. It argues that ARV’s managing director, Alan Stewart, testified that ARV was reimbursed by i t s o w n customer for the increased vessel costs, and it argues that ARV m ay also have m ade a profit. 1 The district court’s calculation of damages in a bench trial is a question of fact that, absent an error of law, is reviewed for clear erro r . Ergon-West V irginia, I n c . v . D y n e g y Mktg. & Trade , 2 013 WL 237567, at *3 (5th Cir. 2013); Kona Tech. Corp. v. S. Pac. Transp. Co. , 225 F.3d 595, 601 (5th Cir. 2000). Damages in a breach of contract case are g e n e r a l l y measured as just

c o mpensation for l osses actually sustained as a result of the breach and a r e meant to restore the injured party to the p o s i t i o n h e would have occupied had the b reaching party performed the contract. Se e L afarge Corp. v. Wolff, Inc. , 977

1 We note that Con- D ive f ocus es only on the cos ts as s ociated w ith the subs titute ves s els and d oes not ad dres s ap p roxim ately $1. 3 m illion that ARV p aid to charter the cargo p lane to trans p ort the O rca. Becaus e Con- Dive d oes not ad d res s the trans portation cos ts includ ed in the d is trict court’s dam ages aw ard , the is s ue is d eem ed aband oned

. See Tew a ri D e–Ox Sys. , Inc. v . M

ounta i n Sta tes/ Rosen, L. L. C. , 637 F. 3d 604, 609–10 ( 5th Cir. 2011)

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S.W.2d 1 81, 187 (Tex. App.—Austin 1 998, pet. denied); see also Restatement (Second) of Contracts § 347. “[W]here the injured party h as simply had to pay

an a dditional a mount to arrange a substitute transaction and can be adequately compensated by d amages b ased on that a mount,” the increased amount paid by the injured party may be adequate to restore the injured party to the position he would have been in had the breach not occurred. Restatement (S e c o n d) of Contracts § 347 cmt. a. In the instant case, ARV proved that i t had to secure replacement vessels

on th e open market in order to complete its project after Con-Dive’s breach and that it actually paid the costs for those vessels. ARV proved through i ts expert that the increased expenses were reasonable and necessary. The district court, which w as in the best position to assess the matter, found ARV’s exp e r t t o be credible a nd reliable. See , e.g. , French v . Allstate Indem. Co. , 637 F.3d 571, 581 & n.9 ( 5th Cir. 2 011) (holding that the district court was b est positio n e d t o

assess witness credibility when de t ermining th e plaintiff’s actual loss). We
p e r c e ive no error in the district court’s award of damages based on ARV’ s increased costs to complete the same work that would have been performed had Con-Dive p rovided the Orca. ARV therefore sufficiently proved that it suffered actual d amages as a result of the breach of contract b y Con-Dive. See Restatement (Second) of Contracts § 347. To the extent that Con-Dive argu e s ARV was reimbursed for any of its

c o s t s , C on-Dive is essentially seeking an offset. Con-Dive conceded at or a l argument that it did not p lead offset as a n a ffir m ative defense, and the issue could be considered waived. See Woodfield v. Bowman , 193 F.3d 354, 362 (5th Cir. 1 999) ; Geis v. Colina Del Rio, LP, 362 S.W.3d 100, 1 1 3 ( T e x . App.—San Antonio 2011, pet. denied). Even if the i ssue is not waived, however, Con-Dive bore the burden of proving facts necessary to s u p p ort an offset. See Brown v. Am. Transfer & Storage Co. , 6 0 1 S.W.2d 9 31, 936 (Tex. 1 980). Stewart’s

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testimony about reimbursements, upon which Con-Dive relies, was non-specific

a n d did not establish a basis for the di strict court to recompute the damag e amount. Indeed, Stewart also testified that there were a number o f vessel days that w ere not reimbursed by its client and that ARV’s claim f o r damages included only vessel days for which ARV was invoiced and for which it actually paid. A s noted by the district court, Con-Dive presented no additional evidence from which the district court could reasonably determine the amounts, if any, to be c redited against ARV’s damages. The di strict court did not c l early err in its damages award. Con-Dive further argues that ARV would have i n curred additional
expenses even if it had supplied the Orca, and therefore ARV’s damages model

was unreliable, because (1) ARV could n ot h ave completed the project within the limited t i m e f

r ame set by the Letter of Award, and (2) the NOR VALIANT

e xp e ri e n c e d m e c h a ni c al b r e ak d o w n s th at would h ave occurred r e gardles s o f C o n D iv e ’ s b r e ach. The district court carefully considered Con-Dive’s ar gu m e nt s , a n d

we conclude that its finding of fact that t h e project could have been completed

as c ontemplat e d in the contract was not clearly e rroneous. See Coe v. Chesapeake Exploration, L.L.C. , 695 F .3d 3 1 1 , 3 1 6 (5th Cir. 2 012) (district court’s findings of fact in a bench trial are reviewed for clear error). AFFIRMED.

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