## IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_______________

No. 99-30294

Summary Calendar

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### VAULTING AND CASH SERVICES, INC.,

Plaintiff-Appellant,

VERSUS



### DIEBOLD, INC.,

Defendant-Appellee.

_________________________

Appeal from the United States District Court

for the Eastern District of Louisiana

(97-CV-3686-N)

_________________________

October 22, 1999

Before SMITH, BARKSDALE, and

STEWART, Circuit Judges.

JERRY E. SMITH, Circuit Judge: *

Vaulting & Cash Services, Inc. (“V&C”),

appeals a summary ju dgment in favor of

Diebold, Inc. (“Diebold”), in V&C’s suit

against Diebold for breach of contract. V&C

contends that the district court erred in holding

that the contract barred V&C from recovering

los t profits on showing breach of contract.

Finding no error, we affirm.

I.

The suit aro se from the termination of the

ATM Transit and Service Agreement (the

“Agreement”) between V&C and Diebold. Diebold is a major manufacturer of automated

teller machines (ATM’s); V&C is an armored

c a r company that provides cash-handling and

first-line services for ATM owners. 1 In

August 1995, Di ebo ld signed a contract with

First National B ank of Commerce to provide

all-inclusive servicing o f its ATM’s. The

contract required Diebold to provide the cashhandling as well as first- and second-line

serv ices on the bank’s ATM’s. Because

Diebold lacked the capability to provide cashhandling services, it subcontracted them to

V&C.

* Pursuant to 5 T H C IR

. R. 47.5, the court has

determined that this opinion should not be

p ublished and is not precedent except under th e

limited circumst a nces set forth in 5 TH C IR

. R. 47.5.4. 1 There are three types of services performed on

ATM’s: cash-handling services; first-line services;

and second-line services. Cash-handling services

consist of picking up deposits and replenishing the

cash supply at the

AT M’s. First-line servicing

deals with paper shortages, paper jams, currency

jam s, r ibbon shortages, and the like. Second-line

servicing is generally provided by the manufacturer

and consists of providing technical assistance and

performing repairs that are beyond the capabilities

of the cash handlers or first-line servicers.2

The Agreemen t specified a term of three

years but prov ided that either party might

terminate the contract for non-performance

after thirty days’ notice. The Agreement

contained a “rider,” clause three of which

(“Clause Three”) stated:

Notwithstanding anything to th e

contrary, in no event shall Dieb old be

liable to Subcontractor for indirect,

incident a l, consequential or similar

damages, lost profits, [sic] lost business

o pportunities, whether arising under

contract, tort, strict liabilit y o r other

form of action, even if Diebold has been

apprized of

t he possibility of such

damages.

Diebold alleged that, from the beginning of

the Agreement, V&C had fai l ed to perform

satisfactorily, and it claimed further that, from

the first year of the Agreement, it had

informed V&C of its displeasure with V&C’s

quality of service wit hout V&C’s acting to

remedy the situation. Finally, in October

1997, Diebold gave notice to V&C of its intent

to terminat e t he Agreement for nonperformance. V&C responded by suing for

breach of contract, “bad-faith breach,” and for

violat i ons of the Louisiana Unfair Trade

Practices Act (“LUTPA”).

Diebold moved fo r summary judgment on

all claims, or in

t he alternative on V&C’s

claims for lost profits and attorneys’ fees and

its claims under LUTPA. The court granted

this m o t ion in part, ruling that Clause Three

unambi guously denied V&C the opportunity

to recover lost profits for breach of contract. 2

The court clarified that the denial of a lostprofits measure of recovery applied to all lost

profits, whether “direct” or “indirect.” II.

V&C claims the court erred in holding

(1) that Clause Three unambiguously denied

any form of lost-profits measu re o f remedy;

(2) that the Agr eement remained an

enforceable contract, given the decision that

Clause Three unamb i guously denied a lostprofits measure of remedy; and (3) that the

unambiguous Clause Three should be honored

without regard to parol eviden ce of the

conditions surrounding its adopti on. We

consider each contention in turn.

A.

V&C argues that Cl a use Three does not unambiguously deny all lost-profit measures of

remedy for breach of c ontract, and thus that

parol evidence s hould be admitted to

det ermine the clause’s meaning. We agree

with t he district court that this clause is not

ambiguous.

The contrac t is not artfully drafted.

Nonethe less, the words “in no event shall

Diebold be liable to Subcontractor for

. . . lost

profits” es t ablish that at least s ome form of

lost profits are denied in a suit on contr a ct.

The only ambiguity that could possibly remain

is whether the words “indirect, i ncidental,

consequential or similar” mo dify only

“damages,” or also “damages, lost profits, [or]

lost business opportunities.”

Mere complexity

of construction does not

justify a finding of ambiguity. S ee Ellsw orth v.

West

, 668 So. 2d 402 (La. App. 4th Cir), writ

denied , 669 So. 2d 1212 (La. 1996). Neither

is a contr act ual provision ambiguous when

two interpretations are technic a lly possible,

but only one is reasonable. See Texas E.

Transmission Corp. v. Amerada Hess Corp

., 145 F.3d 737 (5t h Cir. 1998). Rather, a

provis ion is considered ambi guous i f

susceptible to mo re than one reasonable

m eaning under the circumstance aft e r application of e stabl

ished rules of construction.

See id.; see also Lloyds of London v.

Transcontinental G a s Pipe Line Corp.

, 101

F.3d 425 (5th Cir. 1996). These established

rules of construction include the “ordinary

meaning of words” and of the English

language. S ee Slocum-Stevens Ins. A gency, 2 The court denied summary judgment on the

LUTPA claim and on V&C’s “bad-fai th breach”

claim. By the terms of a partial settlement,

however, V&C agreed to dismiss these claims with

prejudice, and Diebold agreed similarly to dismiss

its countercl a ims. Thus, we consider only the

breach of contract claim.3

Inc. v . International Risk Consultants, Inc.

, 666 So. 2d 352 (La. App. 2d Cir. 1995), writ

denied , 669 So. 2d 399 (La. 1996).

The common usages of the English

language render Clause Thr ee susceptible to

one primary interpretation. As a rule, a

nominative adjective modifies the noun t hat

most closely follows it; t he lack of a comma

between the final adjective of a series and the

noun follow ing that series indicates that the

series mo difies the noun immediately

following. 3 When a writer intends an

adjective 

### SS and especially an adjectival

series 

### SS to modify a series of nouns following

the adjective(s), he so signals by insertion of a

colon or other separator between the adjectival

a nd nominative series to indicate the unusual

usage. 4 Lacking such a signal, the Third

Clause should be subjected to th e primary,

common-usage reading: that the adjectival

series “indirect, incidental, co nsequential or

similar” mo difie s “damages” merely, and not

the entire series of nouns fo llowing the

adjectives.

Largely because the clause is poorly

drafted, however, we do not rest our decision

merely on a grammatical parsing. 5 Rather, we

look also to the reasonableness of the

interpretation advan ced by each party. If the reading po sited by Diebold and endorsed by

the district court is applied, then Clause Three

excludes as possible it ems of recovery for

claims on th e contract all indirect, incidental,

and consequential (“indirect”) damages and all

lost profits and all damages arising from claims

of lost business o ppo rtunity. Under this

interpretation, each of the phrases in the clause

carries independent meaning.

If, on the other hand, V&C’s interpretation

is followed, then the phrases “lost profits” and

“lost business opport unit ies” become

surplusage, because, if modified by “indirect”

to mean “indirect lost profits” and “indirect

business opportu nit ies,” then each is wholly

subsumed in the already stated universe of

“ indirect damages.” Moreover, by V&C’s

own admission, the phrase “indirect lost

profits” is doubly meaningless because, as a

matter of law, lost profits are always

considered direct damages in breach-ofcontract actions; thus a contract provision

forbidding recovery of “indire ct lost profits”

would forbid recovery of, by legal definition,

a null set. 6 Reason thus seconds better

grammar, supporting Diebold’s and the district

co urt’s reading of Clause Three: “[I]ndirect,

inci dental, consequential or similar” modifies

“damages” alone, and thus the Clause denies

recovery of all lost profits.

B.

V&C contends, in the alternative to its

interpretation of Clause Three, that should the

district court’s interpretation be adopted, then

the Agre e ment cannot be considered an

enforceable contract against Diebold, because

it allows V&C no remedy should Diebold

breach its obligations. We find no merit in this

contention.

As noted above, the district court’s

interpretation

o f Clause Three effectively

denies V&C recovery of all indirect damages, 3 See B RYAN A. G ARNER

, T HE E LEMENTS OF

L EGAL S TYLE 22 (1991); R U TH P ARLE C RAIG &

V INCENT F. H OPPER

, 1001 P ITFALLS IN E NGLISH

G RAMMAR 1 (3d ed. 1986); cf. T HEODORE M.

B ERNSTEIN

, T HE C AREFUL W RITER : A M ODERN

G UIDE TO E NGLISH U SAGE 20 (1965) (stating that

“intimate .

. . is the relationship of an adjective to

the noun it modifies”).

4 E UGENE E HR L ICH

, T HE B ANTAM C ONCISE

H ANDBOOK OF E NGLISH 166-67 (1986).

5 Had the drafters of Clause Three followed the

conventions of the English lang uage with

exactitude, they not only wou ld have included an

“or” after “lost profits” but als o would have

separated “damages, lost profits, [or] lost business

opportunities” with semi-colons rather than

commas. S ee id. at 166; B ERNSTEIN

, supra n.3, at

362, 373. 6 See Moore v. Boating Indus. Ass’ns, 754 F.2d

698, 717 (7th Cir. 1985), vacated on other

grounds

, 474 U.S. 895 (holding that “[l]ost profits

are considered to be general or direct damages in a breach of contract case”).4

lost profits, and damages for lost business

opportunities. Conceptually, these denials

leave, as a remedy, all direct damages that are

not characterized as lost-profits dama ges or lost-business-opportuni ty dam ages, e.g.,

resti tutory and recissionary measures of

damages. By t he language of Clause Three,

t hen, breach-of-contract damages are mer ely

limited, not wholly denied.

V&C nevertheless argues that Louis i ana

l aw permits, as breach-of-contract recover y

, only the damage re medies that Clause Three

eliminates, thereby render ing its retained

damage rem

edies nugatory. V&C contends

that L A

. C IV

. C O DE art. 1995 indicates that

“the only damage for breach of this contract is

lost profits.” This, however, represents an

unrealistic misreading of a one-sentence code

provision that reads in full: “Damages are

measured by the loss sustained by the obligee

and the profit of which he has been deprived.”

Id. (emphasis added). Thus, the code did not

deny V&C the resti

tutor y and recissionary

remedies permitted by Clause T hree and did

not leave V&C without remedy. 7

The Civil Code defines a c ontract as “an

agreement between two or more parties

whereby obligations are created, modified, or

extinguished,” L A

. C IV

. C ODE art. 1906, and

an onerous contract (as op posed to a

gratui tous one) as one by which “eac h of the

parties obtains an advantage in exchange fo r

his obligation,” id. art. 1909. The Agreement,

then, Clause Three inclusive, does remain a

contract. Duties applied to both parties under

the Agreement, and remedie s for breach of

duty remained to each party. If V&C chose to

charac t erize its damages claims in a manner

denied by the terms of the contract, or if it had

no damages claims other than those it agreed

to forego under the terms of the con tract, i t

shall not complain of its error in pleading or of its mi scal cul ation of contractual risk

obligation.

C.

V&C contends that the summary judgment

o n the breach-of-contract question is error

becaus e a material dispute arises with regard

t o t he parol evidence surrounding the

circumstances of th e interpretation and

adopti on of the contract, particularly Clause

Three. The parol evidence is inadmissible,

however.

Louisiana law bars parol evidence to

evaluate contractual intent “[w]hen the words

of a contract are clear and explicit and lead to

no abs u rd consequences.” 8 L A

. C IV

. C ODE

art. 2046. Because, as we have noted, Clause

Three is not ambiguous, parol evidence is not

admissible to determine intent. 9

V&C contends, however, that in Louisiana,

parol evidence must be considered because, in

V&C’s words, “[f]or a waiver of recoverable

damages to be effective it must be (1) wri tten

in clear and unambiguous terms; (2) contained

in the contract; and ( 3 ) brought to the

at t ent ion of and explained to the parties

against whom it is t o be enforced” (citing

Fontenot v. F. Holli er & Sons , 478 So. 2d

1379, 1386 (La. App. 3d Cir. 1985), affirmed

as amended

, 491 So. 2d 624 (La. 1986); Gulf

7 See, e.g., Southwestern Eng’g Co. v. Cajun

Elec. Power Co-op, Inc.

, 915 F.2d 972 (5th Cir.

1990) ( allowing recovery of “unabsorbed

overhead” by a company follow ing breach of

contract by the other contracting party that resulted

in the idling of the company’s plant). 8 V&C contends that an “absurd consequence”

as per the terms of this article would be reached by

a contract in which one party was left by the terms

of the contract with no damage remedy in the case

of the other party’s breach. Because, as we have

discussed above, the Agreement does not foreclose

all damage measures, we need not add ress this

contention.

9 V&C correctly notes that Louisiana does

allow parol evidence to determine a claim of fraud

against a partner in contract. S ee L A

. C IV

. C ODE

A NN

. art. 1848; see also Harnischfeger Sale Corp.

v. Sternberg Co., 154 So. 10 (1934); Broussard v. Sudrique

, 4 La. 347 (1832). V&C overlooks,

however, that it ha s

, by consent, dismissed all its

claims ag ainst Diebold except the breach-ofcontract claim, so it is not availed by this exception

to the parol evidence rule.5

Am. Indus. v. Airco Indus. Gases

, 573 So. 2d

481, 573 (La. App. 5th Cir. 1990)). We first

note that Fontenot deals not with a contractual

waiver of remedies, but wi t h a waiver of

warranties by a “poorly educated” farmer. S ee

Fontenot

, 478 So. 2d at 1386. The holding of

Fontenot was part ially adopted by the G ulf

A merican court and applied, as modified, to

cases of waiver of breach-of-contract

remedies, but was not

adopted and applied as

V&C indicates.

The Gulf American court held that “[f]or a

waiver of recoverable damages to be effective

. . . it must be 1) written in clear and

unambiguous terms; 2) contained in the

contract; 3) brought to the attenti on of the

parties against whom it is t o be enforced.”

Gulf American

, 573 So. 2 d at 489 (emphasis

added). The immediately preceding sentence,

ho wever, explains that when a contract

co nt emplates merely “a l imitat ion o n

recoverable damages, . . . such an agreement

must clearly indicate t he intentions of the

parties.” I

d. (emphasis added). As we have

said, Clause Three limit s, rather than wa i ves entirely, available damage remedies. Thus, the

latter “clarity” s tandard, not the form er “brought to the attention” standard, is relevant

to this case.

AFFIRMED.