IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 17-20388

MUSKET CORPORATION, 

 Plaintiff - Appellant Cross-Appellee

v.

SUNCOR ENERGY (U.S.A.) MARKETING, INCORPORATED, 

 Defendant - Appellee Cross-Appellant

Appeals from the United States District Court

for the Southern District of Texas

USDC No. 4:15-CV-100

Before HIGGINBOTHAM, SMITH, and GRAVES, Circuit Judges.

JAMES E. GRAVES, JR., Circuit Judge:*

Plaintiff-Appellant Musket Corporation (“Musket”) filed suit against 

Defendant-Appellee Suncor Energy (U.S.A.) Marketing, Inc. (“Suncor”) in 

federal court to resolve a dispute arising from a contract for the sale and 

delivery of crude oil. Suncor filed counterclaims against Musket and moved to 

dismiss some of Musket’s claims. The district court granted Suncor’s motion to 

dismiss in part. After the close of discovery, Suncor moved for summary 

judgment on Musket’s remaining claims. The district court granted Suncor’s 

 

* 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.

United States Court of Appeals

Fifth Circuit

FILED

January 8, 2019

Lyle W. Cayce

Clerk

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motion in part. Musket moved for summary judgment on Suncor’s 

counterclaims. The district court granted the motion. Both parties now appeal 

part of the district court rulings on their respective motions. 

For the reasons stated below, we AFFIRM. 

I. BACKGROUND

This case involves two major players in the U.S. crude oil market. 

Musket is a leading commodity supply, trading, and logistics company, and an 

affiliate of Love’s Travel Stops and Country Stores, Inc.; the second largest 

diesel retailer in the United States. A substantial part of Musket’s business 

involves shipping crude oil by rail, generally from terminals located near crude 

oil production sites to refineries. Suncor is a crude oil supply, marketing, and 

trading company based in Colorado, advertised as guaranteed by Suncor 

Energy, Inc.—the first company to develop oil sands1—which remains its 

largest producer. 

A. The Contractual Relationship

In July 2012, Suncor engaged Musket to become the exclusive supplier 

of crude oil to Musket’s Windsor, Colorado terminal (the “Windsor Terminal”). 

Musket alleges Suncor represented that Suncor could, among other things, 

provide 20,000 barrels of crude oil per day to the Windsor Terminal and would 

be able to provide that volume regularly. Musket purportedly made 

infrastructure enhancements to the Windsor Terminal in anticipation of 

receiving 20,000 barrels of crude oil per day from Suncor. On April 1, 2013, 

Musket and Suncor entered into an agreement (the “Agreement”) consisting of: 

(1) a Master Agreement for U.S. Crude Oil Purchase, Sale, or Exchange 

Transactions (the “Master Agreement”)—pursuant to which Musket agreed to 

 

1 Found in Canada, oil sands are a natural mix of sand, water and bitumen (oil that is too 

heavy or thick to flow on its own). Oil Sands, Can. Assoc. Petroleum Producers, 

https://www.capp.ca/canadian-oil-and-natural-gas/oil-sands (last visited Sept. 13, 2018).

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buy, and Suncor agreed to sell and deliver, crude oil; (2) the General Provisions 

Domestic Crude Oil Agreements (the “General Provisions”); and (3) the 

Physical Confirmation Transaction (the “Confirmation”), which established 

the quantities, delivery dates, delivery points, and price of the crude oil Suncor 

was to deliver to the Windsor Terminal. The Agreement was to run from April 

1, 2013 to March 31, 2015.2 As part of the Agreement, Suncor agreed to sell 

and deliver, and Musket agreed to buy and receive, 20,000 barrels of crude oil 

per day during 2014 and the first quarter3 of 2015. New York law governs the 

Agreement.4

B. Conflicts

Musket and Suncor’s arrangement was rocky. The Agreement required 

Musket to provide railcars and storage capacity to receive the crude oil 

supplied by Suncor. Musket also agreed to expand the Windsor Terminal to 

ensure Musket had the capacity to receive the crude oil delivered by Suncor. 

There were times when the Windsor Terminal could not receive the 

committed volumes5 of crude oil as outlined in the Agreement. Musket did not 

accept a full committed volume during the second quarter of 2013, the third 

quarter of 2013, the fourth quarter of 2013, in 2014, or the first quarter of 2015.

Around July 2014, Suncor suffered an interruption6 as defined in the 

 

2 This period is referred to as the “Term” of the Agreement. 

3 A “quarter” as it is used in this context is three months in a calendar year.

4 The parties agree New York law governs the Agreement and Section M of the Master 

Agreement states as much. 

5 “Committed volumes” are the number of barrels per day (“bpd”) to be delivered by Suncor 

during the specified “period of commitment” under the terms of the Agreement. 

6 Under the terms of the Agreement, “Interruption” means:

[I]n respect of a Party or a connection carrier: (i) any shut down, turnaround, 

breakdown, repairs, maintenance, construction change in operations or 

operational issues relating to equipment, machinery, facilities, pipelines or plants; 

(ii), governmental regulations or orders; that may directly or indirectly affect the 

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Agreement.7 The interruption was related to the Williams Overland Pass NGL

pipeline (the “NGL Pipeline”). The NGL Pipeline was an essential part of the 

production of crude oil that Suncor needed to purchase in order to supply 

Musket’s Windsor Terminal. Following the interruption, the wells that 

produced the crude oil Suncor sold to Musket at the Windsor Terminal were 

either slowed down or shut for some time. The interruption hampered Suncor’s 

ability to deliver Musket crude oil in accordance with the Agreement. Suncor’s 

oil supply was negatively affected by the interruption until November 2014. 

Beginning in the spring of 2014, Suncor representatives made 

reassurances to Musket that Suncor had the capacity to meet the committed 

volumes8 under the Agreement and would deliver those volumes to the 

Windsor Terminal. Those reassurances occurred throughout the spring, 

summer, and fall of 2014.9

Suncor could not meet the committed volumes. As a result, the parties 

modified the volumes Suncor was to deliver to Musket. Instead of committed 

 

ability of a Party to fulfill its obligations under this Agreement in whole or in part, 

or to apportion their facilities or acceptance and/or delivery of crude oil.

7 The Agreement contains an interruption provision, found in the Confirmation, which 

states:

The Parties acknowledge and agree that in the event of any Interruption or Force 

Majeure circumstance (as defined in the Master Agreement) lasting longer than 

thirty (30) days: (i) the applicable Committed Volume of Product to be delivered 

will be reduced on a pro rata basis; and (ii) any payment hereunder not already 

due and payable by the Buyer will be excused or proportionately reduced, as 

appropriate, for so long as the party’s performance is so excused; provided that, for 

greater clarity, in the event of any Interruption or Force Majeure circumstance 

lasting for a period of less than thirty (30) days, Buyer shall continue to make 

payment for the Product for each day of the Interruption or Force Majeure 

circumstance up to thirty (30) days.

8 For the relevant period, the committed volumes were 20,000 barrels per day. 

9 Musket alleges the reassurances occurred on March 5, 2014; March 14, 2014; June 27, 

2014; July 7, 2014; September 4, 2014; September 9, 2014; September 18, 2014; and October 1, 

2014. 

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volumes of 20,000 barrels of crude oil per day as outlined in the Agreement, 

the parties agreed that Suncor would deliver nominated volumes of 18,000 

barrels per day in August 2014, 16,000 barrels per day in September 2014, 

16,000 barrels per day in October 2014, and 15,000 barrels per day in 

November 2014. Suncor failed to deliver the nominated volumes.

Also during the spring of 2014, Suncor engaged Musket with discussions 

about, among other things, an extension of the Master Agreement and 

presented Musket with pipeline infrastructure plans that would facilitate 

Suncor’s providing an increased crude oil supply to the Windsor Terminal.

Suncor proposed building pipeline infrastructure connecting to the Windsor 

Terminal. Musket contends Suncor’s proposals prevented Musket from 

exploring alternate crude oil suppliers. According to Musket, Suncor demanded 

confidentiality and indicated that any discussion with a third-party crude oil 

supplier would preclude the parties from establishing a long-term 

arrangement. 

Musket asserts that Suncor used the contract extension and pipeline 

connection discussions to distract Musket from collecting on Suncor’s payment 

obligations under Alternative #210 of the Confirmation. Suncor agreed to pay 

Musket $328,716 for its failure to deliver nominated volumes in August 2014—

a discount on the $1.4 million Suncor was obligated to pay under the 

Agreement. Subsequently, Suncor failed to deliver nominated volumes in 

September 2014, and requested the opportunity to combine the August 2014 

payment with the September 2014 payment at a discount. Seeking to maintain 

a relationship with Suncor, Musket agreed to the discounts. Musket contends

that reliance on the infrastructure plans and the positive commercial impact 

those plans could produce, as well as Suncor’s request to be the exclusive crude 

 

10 See infra Section III.B.2 for definition. 

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oil supplier for the Windsor Terminal, left Musket without sufficient crude oil 

to operate the Windsor Terminal efficiently. Musket alleges Suncor never 

intended to pursue a long-term extension of the Master Agreement, a pipeline 

connection, or the infrastructure improvement plan that Suncor presented to 

Musket. 

C. Procedural History

In January 2015, Musket filed a lawsuit alleging Suncor breached the 

Agreement by failing to deliver the agreed upon quantities of crude oil. Suncor 

answered the complaint and asserted counterclaims against Musket alleging 

breach of contract for failure to comply with the terms of the Agreement and 

failure to purchase and receive the agreed upon quantities of crude oil. Musket 

amended the complaint two more times. Musket expanded its original breach 

of contract claim into three parts: (1) breach of contract for failure to deliver 

crude oil; (2) breach of contract for failure to comply with compensation 

provisions; and (3) breach of contract for failure to comply with confidentiality 

provisions. Musket also added claims for fraud, fraudulent inducement, breach 

of the implied covenant of good faith and fair dealing, and punitive damages.

Suncor’s counterclaims against Musket allege breach of contract for

Musket’s failure to purchase or receive the committed volumes of crude oil 

based upon: (1) Musket’s failure to provide sufficient railcars; (2) Musket’s 

failure to ensure the Windsor Terminal could receive the committed volumes 

of crude oil delivered by Suncor throughout the term of the Agreement; and (3) 

damages available for the alleged breaches under § S.

Suncor moved to dismiss Musket’s claims for fraud, fraudulent 

inducement, breach of contract for failure to comply with compensation 

provisions, breach of the implied covenant of good faith and fair dealing, and 

punitive damages, pursuant to Rule 12(b)(6) of the Federal Rules of Civil 

Procedure. The district court denied Suncor’s motion regarding Musket’s 

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breach of contract claim for failure to comply with the compensation provisions,

but granted the motion on the other claims. The fraud claims were the only 

grounds upon which Musket could claim punitive damages. Accordingly, the 

district court dismissed Musket’s claim for punitive damages.

Following the district court’s partial grant of Suncor’s motion to dismiss, 

only Musket’s breach of contract claims remained against Suncor. After 

discovery closed, Suncor moved for summary judgment on the three breach of 

contract claims. The district court granted summary judgment and dismissed 

the breach of contract claims for failure to deliver crude oil and failure to 

comply with the compensation provisions, but denied summary judgment on 

the claim for failure to comply with the confidentiality provisions.

Musket also moved for summary judgment on Suncor’s counterclaims. 

The district court granted summary judgment and dismissed all of Suncor’s 

counterclaims. 

After the district court’s rulings on the respective motions for summary 

judgment, Musket’s breach of contract claim for failure to comply with the 

confidentiality provisions was the only remaining claim in the case. The parties 

filed a joint stipulation of dismissal of the claim, which the district court 

granted. This appeal followed.11

II. STANDARDS OF REVIEW

A. Failure to State a Claim

“We review de novo a district court’s grant of a Rule 12(b)(6) motion, 

‘accepting all well-pleaded facts as true and viewing those facts in the light 

most favorable to the plaintiff.’” Greene v. Greenwood Pub. Sch. Dist., 890 F.3d 

240, 242 (5th Cir. 2018) (quoting SGK Props., L.L.C. v. U.S. Bank Nat’l Ass’n, 

 

11 The district court exercised subject matter jurisdiction over this case based on federal 

diversity jurisdiction under 28 U.S.C. § 1332. This court has jurisdiction over this appeal pursuant 

to 28 U.S.C. § 1291. 

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881 F.3d 933, 943 (5th Cir. 2018)). A Rule 12(b)(6) motion may be granted, and 

the claims dismissed, if a plaintiff fails to allege any set of facts to support the 

claim that establishes the basis for relief. U.S. ex rel. Willard v. Humana 

Health Plan of Texas Inc., 336 F.3d 375, 379 (5th Cir. 2003). However, neither 

conclusory allegations nor “unwarranted deductions of fact,” prevent a motion 

to dismiss from being granted. Id. (quoting Guidry v. Bank of LaPlace, 954 F.2d 

278, 281 (5th Cir. 1992)). 

B. Dismissal Under Rule 9(b)

Rule 9(b) of the Federal Rules of Civil Procedure requires that a plaintiff 

state an alleged fraud with particularity. Fed. R. Civ. P. 9(b). “A dismissal for 

failure to plead fraud with particularity under Rule 9(b) is treated as a 

dismissal for failure to state a claim under Rule 12(b)(6).” U.S. ex rel. 

Stephenson v. Archer W. Contractors, L.L.C., 548 F. App’x 135, 138 (5th Cir. 

2013) (citing United States ex rel. Thompson v. Columbia/HCA Healthcare 

Corp., 125 F.3d 899, 901 (5th Cir. 1997)). Rule 9(b) requires that a plaintiff 

state the who, what, when, where, and how of the alleged fraud. Id. at 139.

“The frequently stated, judicially-created standard for a sufficient fraud 

complaint . . . instructs a plaintiff to plead the time, place and contents of the 

false representation, as well as the identity of the person making the 

misrepresentation and what that person obtained thereby.” United States ex 

rel. Grubbs v. Kanneganti, 565 F.3d 180, 186 (5th Cir. 2009) (internal quotation 

marks and alteration omitted).

C. Summary Judgment

We review a district court’s grant of summary judgment de novo, 

applying the same standards as the district court. Ezell v. Kan. City S. Ry. Co., 

866 F.3d 294, 297 (5th Cir. 2017). Summary judgment is appropriate only “if 

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

the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); 

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see also Tolan v. Cotton, 134 S. Ct. 1861, 1866 (2014) (per curiam). A dispute

is “genuine” when a reasonable trier of fact, viewing all of the record evidence, 

could rationally find in favor of the nonmoving party. Westfall v. Luna, 903 

F.3d 534, 546 (5th Cir. 2018) (citation omitted). And a fact is “material” if, 

under the applicable substantive law, “its resolution could affect the outcome 

of the action.” Sierra Club, Inc. v. Sandy Creek Energy Assocs., L.P., 627 F.3d 

134, 138 (5th Cir. 2010) (citation omitted). 

We must neither weigh the evidence nor evaluate the credibility of 

witnesses. Boudreaux v. Swift Transp. Co., 402 F.3d 536, 540 (5th Cir. 2005). 

We construe the evidence in the light most favorable to the nonmoving party 

and draw all reasonable inferences in that party’s favor. R & L Inv. Prop., LLC 

v. Hamm, 715 F.3d 145, 149 (5th Cir. 2013). But only where both parties have 

submitted evidence of contradictory facts; we cannot assume, in the absence of 

proof, that the nonmoving party could or would prove the necessary facts. 

McCarty v. Hillstone Rest. Grp., Inc., 864 F.3d 354, 358 (5th Cir. 2017); see also 

Scott v. Harris, 550 U.S. 372, 380 (2007) (“When opposing parties tell two 

different stories, one of which is blatantly contradicted by the record, so that 

no reasonable jury could believe it, a court should not adopt that version of the 

facts for purposes of ruling on a motion for summary judgment.”).

Finally, “[t]he proper interpretation of a contract is a legal determination 

that is reviewed de novo.” ExxonMobil Corp. v. Elec. Reliability Servs., Inc., 868 

F.3d 408, 415 (5th Cir. 2017).

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III. DISCUSSION

A. Dismissal of Musket’s Fraud Claims

Musket appeals the district court’s dismissal of its fraud claims.12 The 

district court analyzed Musket’s claims under two theories of the alleged fraud. 

First, the district court evaluated Musket’s allegation that Suncor 

intentionally misrepresented its capacity to produce and deliver nominated 

volumes to the Windsor Terminal. The district court dismissed this fraud 

claim, finding that the claim concerns the nature of the parties’ obligations 

under the Agreement—Suncor agreed to deliver nominated volumes of crude 

oil to the Windsor Terminal, and Musket agreed to accept the deliveries from 

Suncor. The district court concluded none of the alleged misrepresentations 

forming the basis of the claim are “collateral or extraneous” to the Agreement 

as required under New York law.

Second, the district court evaluated Musket’s allegation that Suncor 

intentionally misrepresented its plans to extend the arrangement with Musket 

and build pipeline infrastructure to improve the efficiency of deliveries to the 

Windsor Terminal. The district court concluded Musket failed to plead the 

claim with particularity as required by Federal Rule of Civil Procedure 9(b). 

The district court noted the extension conversations began in the spring of 

2014 and Suncor requested discounts on payments due for August and 

September 2014. The district court further noted Musket alleged the discounts 

were offered in reliance on Suncor’s alleged misrepresentations. The district 

court determined that Musket states the “who, what, where, when, and how” 

of a proposed infrastructure plan, and the “who, what, and when” of Suncor’s 

request for a discount on Suncor’s payment obligations under the Agreement.

 

12 Musket does not appeal the dismissal of the claims for fraudulent inducement and 

breach of the implied covenant of good faith and fair dealing. Therefore, we will not evaluate the 

district court’s conclusions regarding those claims. 

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The district court concluded, however, Musket failed to plead “who, when, 

where, and how, a conversation, or exchange, took place that would link [the] 

two separate events together that would indicate fraud by Suncor.” The district 

court dismissed the second fraud claim pursuant to Rule 9(b) explaining, 

“[w]ithout satisfying the additional pleading requirements of Rule 9(b) it is not 

plausible to conclude that Suncor knew in the spring of 2014 that it would incur 

additional obligations under the Master Agreement in August and September 

of that year and therefore needed to create a ‘fraudulent scheme’ in order to 

obtain those discounts.” 

We agree with the district court and conclude that both of Musket’s fraud 

theories fail to state a plausible claim for relief. 

Musket argues the district court erred in dismissing the fraud-based 

claims as duplicative of Musket’s breach of contract claim because the fraudbased claims are separate and distinct from its contract claim, and were 

pleaded with sufficient particularity. Musket cites several New York state 

cases and relies on its contentions that, after the Agreement was executed, 

Suncor: (1) misrepresented its ability to meet the delivery obligations; (2) 

promised it would take significant, specific steps to increase supply; (3) 

misrepresented its plans for pipeline infrastructure improvement; and (4) 

misrepresented its objective of being the exclusive crude oil supplier for the 

Windsor Terminal beyond the term of the Agreement.

To establish a claim for fraud under New York law, a plaintiff must 

demonstrate the defendant: (1) knowingly (2) misrepresented a material fact 

(3) to induce reliance on the fact, and (4) there was justifiable reliance on the 

fact, from which (5) damages resulted. Dube-Forman v. D’Agostino, 877 

N.Y.S.2d 740, 741 (2009). However, “[a] cause of action to recover damages for 

fraud does not lie when the only fraud charged relates to a breach of contract.” 

Marlowe v. Ferrari of Long Island, Inc., 876 N.Y.S.2d 165, 165 (2009). Further, 

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“a claim for fraud will not be recognized where it is based solely upon the 

failure to perform the promises of future acts which constitute the contractual 

obligations themselves.” Microtel Franchise & Dev. Corp. v. Country Inn Hotel, 

923 F. Supp. 415, 417 (W.D.N.Y. 1996) (citing Chase v. Columbia Nat’l Corp., 

832 F. Supp. 654, 660 (S.D.N.Y. 1993)). 

Even if a plaintiff sufficiently pleads a fraud claim under New York law, 

the claim is still subject to dismissal if it fails to meet the particularity 

requirement of Rule 9(b). “State law fraud claims are subject to the heightened 

pleading requirements of Rule 9(b).” Sullivan v. Leor Energy, LLC, 600 F.3d 

542, 550–51 (5th Cir. 2010) (citing Dorsey v. Portfolio Equities, Inc., 540 F.3d 

333, 339 (5th Cir. 2008)); see also Williams v. WMX Technologies, Inc., 112 F.3d 

175, 177 (5th Cir. 1997) (“We see no principled reason why the state claims of 

fraud should escape the pleading requirements of the federal rules . . . .”). The 

who, what, when, where, and how of the alleged fraudulent scheme must be 

pleaded in the complaint. 

1. Fraud Related to the Failure to Deliver

Musket contends the fraud claim related to Suncor’s alleged 

misrepresentations about its capacity to deliver the nominated volumes and 

its efforts to increase the supply of crude oil to the Windsor Terminal are 

separate and distinct from Musket’s breach of contract claims. These 

allegations, as articulated in Musket’s second amended complaint, state: 

“Suncor [represented it had] the capacity to meet nominated volumes and 

Suncor intended to deliver such volumes,” and that “Suncor would increase its 

volumes ‘over the coming weeks’ . . . in order to satisfy the nominated volumes,” 

along with other similar reassurances. 

The district court correctly concluded those allegedly fraudulent 

representations “concern[] the essence of the parties’ obligations under the 

Master Agreement – Suncor’s promise to deliver nominated volumes of crude 

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oil and Musket’s obligation to accept the deliveries.” The terms, rights, and 

obligations outlined throughout the Agreement were designed to initiate and 

facilitate Suncor’s delivery of crude oil to the Windsor Terminal, and this fraud 

theory is based on representations in furtherance of the same goal.

Musket cites Kosowsky v. Willard Mountain, Inc., 934 N.Y.S.2d 545, 548 

(2011), as that court determined that a fraud claim could proceed because the 

“Plaintiffs [did] not merely allege that defendants falsely represented their 

intent” with respect to their contractual obligations, but “repeatedly 

misrepresented or concealed existing facts.” Id. However, Kosowsky also states 

a “misrepresentation premised directly on the same actions giving rise to a 

breach of contract does not give rise to a separate cause of action for fraud.” Id.

Kosowsky involved fraud claims against a defendant who was not a party to 

the original contract in the case, and allegations that the defendant had 

intentionally paid plaintiff less than what was owed under the contract and 

falsified his companies’ annual income reports to correspond with the amounts 

he had paid. Id. In stark contrast, the present case involves alleged 

misrepresentations that pertain directly to the purpose and nature of the 

parties’ Agreement. Kosowsky is unpersuasive. The other cases cited by 

Musket are also distinguishable and unpersuasive. 

The district court correctly dismissed Musket’s fraud claim related to 

Suncor’s failure to deliver nominated volumes because the claim is based on 

promises to do future acts in furtherance of Suncor’s obligations under the 

Agreement. See Microtel, 923 F. Supp. at 417. It is unnecessary to consider 

whether Musket pleaded this claim with sufficient particularity under Rule 

9(b) because the fraud allegations fail to state a claim as a matter of law. 

2. Fraudulent Scheme to Avoid Compliance with the Payment Terms 

of the Agreement

Musket argues the district court erred in concluding Musket’s fraud claim 

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that Suncor concocted a fraudulent scheme, to avoid compliance with its payment 

obligations, was not pleaded with sufficient particularity. The district court 

described the allegations forming the basis of the second fraud claim as: (1) 

“Musket states the conversations took place ‘in the spring of 2014’ during which 

Suncor approached Musket about a contract extension and a proposed pipeline 

plan”; and (2) “Suncor requested a discount on amounts due under the Master 

Agreement for August and September 2014.” The district court further noted, 

“Musket asserts that ‘these discounts were offered in reliance on Suncor’s 

misrepresentations regarding the [future] contract extension and pipeline 

connection.’” The district court dismissed the second fraud claim after concluding 

it was not plausible to conclude that Suncor knew in the spring of 2014 that it 

would incur additional obligations under the Master Agreement in August and 

September of that year, and therefore needed to create a fraudulent scheme to 

obtain discounts. 

The district court’s reasoning is sound. Especially when one considers that 

Suncor suffered an interruption in July of 2014. Musket attempts to combine its 

fraud allegations into one theory, listing the details of the fraud allegations point 

by point. Viewing the alleged facts as true, there is nothing that logically connects 

the spring 2014 discussions and reassurances to the fall 2014 requests for 

payment discounts. Musket’s argument is more aptly considered as support for a 

breach of contract theory, not an allegation of a fraudulent scheme existing before

the interruption and continuing until the fall of 2014. Musket fails to state the 

second fraud claim with particularity.13

 

13 We affirm the district court’s grant of summary judgment on Musket’s claim for punitive 

damages because both fraud claims were properly dismissed. Musket cannot recover punitive 

damages for the breach of contract claims. See Rocanova v. Equitable Life Assurance Soc’y of the 

U.S., 83 N.Y.2d 603, 613 (N.Y. 1994) (holding “[p]unitive damages are not recoverable for an 

ordinary breach of contract”). 

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B. Summary Judgment on Musket’s Breach of Contract Claims

Musket appeals the district court’s grant of summary judgment on the 

two breach of contract claims against Suncor.14 The district court based its 

conclusions on its interpretation of the Agreement, according to New York 

law—which governs the contract terms.

Under New York law, when contract language is clear and unambiguous, 

contracts should be interpreted based on the plain, non-technical meaning of 

the language of the agreement itself. Lopez v. Fernandito’s Antique, Ltd., 760 

N.Y.S.2d 140, 141 (2003). Courts must not consider extrinsic evidence to 

determine the parties’ intentions when contract language is clear. Guggenheim 

Corp. Funding, LLC v. Access.1 Commc’ns Corp.-NY, No. 602376/08, 2009 WL 

5345767, at *9 (N.Y. Sup. Ct. 2009). “The rules of construction of contracts 

require [courts] to adopt an interpretation which gives meaning to every 

provision of a contract or, in the negative, no provision of a contract should be 

left without force and effect.” Black Bull Contracting, LLC v. Indian Harbor 

Ins. Co., 23 N.Y.S.3d 59, 63 (N.Y. App. Div. 2016) (citations omitted). “[T]he 

entire contract must be reviewed and ‘[p]articular words should be considered, 

not as if isolated from the context, but in the light of the obligation as a whole 

and the intention of the parties as manifested thereby. Form should not prevail 

over substance and a sensible meaning of words should be sought.’” Givati v. 

Air Techniques, Inc., 960 N.Y.S.2d 196, 198 (2013) (citations omitted). Where 

a court can determine the parties’ intent from the face of the contract, 

“interpretation is a matter of law and the case is ripe for summary judgment.” 

Guggenheim Corp., 2009 WL 5345767, at *9 (quoting Am. Exp. Bank Ltd. v. 

Uniroyal, Inc., 562 N.Y.S.2d 613, 614 (1990)).

 

14 The district court also granted summary judgement in favor of Suncor on Musket’s claim 

for attorneys’ fees, which Musket does not appeal. 

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For the reasons that follow, we conclude that the district court correctly 

granted summary judgment on both breach of contract claims.

1. Whether Musket Can Recover Damages for Suncor’s Failure to 

Deliver

The district court granted Suncor summary judgment on Musket’s 

breach of contract claim for failure to deliver because the district court 

concluded two contract provisions within § S of the Master Agreement preclude 

Musket from establishing or recovering damages for the claim. The district 

court read § S(b) to require Musket to cover—in other words, seek alternative 

sources of crude oil—when Suncor failed to deliver crude oil. The district court 

noted that Musket admitted it did not purchase crude oil from other suppliers. 

The district court rejected Musket’s argument that § S(b) does not govern the 

issue because § S(b) conflicts with the exclusivity provision of the 

Confirmation, which designates Suncor as the lone supplier of crude oil to the 

Windsor Terminal during the full term of the Agreement. The district court 

added, (1) § S(b) does not conflict with the exclusivity provision, and (2) when 

Suncor failed to deliver crude oil and none of the other provisions of the 

Confirmation applied, § S(b) applied. The district court concluded Musket was 

not entitled to damages under § S(b) because Musket did not cover for the 

failure to deliver. 

As additional grounds to support the grant of summary judgment, the 

district court determined that the measures of damages Musket sought in 

connection with the claim are barred by § S(a) of the Master Agreement. The 

district court found that Musket seeks lost profits and other consequential 

damages. Musket argued § S(a) conflicted with the exclusivity provision in the 

Confirmation, but the district court considered Musket’s argument 

unpersuasive. The district court read § S(a) as a bar to either party seeking 

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lost profits or other consequential damages and granted summary judgment in 

favor of Suncor. 

We conclude that the district court properly granted summary judgment 

on Musket’s claim for failure to deliver because § S(a) proscribes the recovery 

Musket seeks. Musket contends the district court erroneously found that §§ 

S(a) and S(b) bar Musket from recovering damages for the breach of contract 

claim for failure to deliver. The district court rejected Musket’s argument that 

the exclusivity clause in the Confirmation renders the entire § S ineffectual 

because §§ S(b) and S(c) require the parties to cover for failed oil deliveries. 

Section S(a) does not have a cover requirement, and Musket’s only argument 

against the applicability of § S(a) is the assertion that other subsections of § S 

conflict with the exclusivity provision.

Section S(a) bars recovery for lost profits and other consequential 

damages. “It is settled that a contractual provision which limits damages will 

be enforced unless a special relationship exists between the parties, or a 

statute or public policy imposes liability despite the restrictions set forth in the 

contract.” Duane Reade v. 405 Lexington, L.L.C., 800 N.Y.S.2d 664, 666 (2005). 

In the commercial setting, where the language of the damages limitation is 

clear, courts are not required to “resort to a magnifying glass and lexicon” 

where no governing statute and no special relationship between the parties 

would warrant relieving the plaintiff of the contract. Florence v. Merchants 

Cent. Alarm Co., 51 N.Y.2d 793, 795 (1980).

Section S begins, “Except as expressly set forth in this Agreement,” and

S(a) states:

under no circumstances will either Party be liable to or required to 

compensate the other Party, in contract, tort, negligence or 

otherwise, for any loss of profits, exemplary incidental, special, 

contingent, incidental, punitive, indirect or consequential loss or 

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damages of any kind, and the Parties waive their rights thereto 

including any waiver required under any statutory provision.

(emphasis added). “It is well settled that a breach of contract is compensable 

by contract damages alone.” Metro. Life Ins. Co. v. Noble Lowndes Int’l, Inc., 

600 N.Y.S.2d 212, 214 (1993), aff’d, 84 N.Y.2d 430 (1994). Under New York 

law, a plaintiff may plead two types of damages in a contract case: (1) general 

damages and (2) consequential damages. PNC Bank, Nat. Ass’n v. Wolters 

Kluwer Fin. Servs., Inc., 73 F. Supp. 3d 358, 370 (S.D.N.Y. 2014). Musket does 

not dispute that it seeks to recover damages that are barred by § S(a) for the 

failure to deliver claim. Further, § S(a) is not in conflict with any other section 

of the Agreement, and Musket has not presented such an argument. 

It would be improper for the court to simply ignore § S(a) as Musket 

suggests. Musket and Suncor do not have a special relationship, nor is there a 

statute that governs damages in this context. In this contractual dispute 

involving two sophisticated commercial actors, we interpret § S(a) to have full 

force and effect, barring Musket’s attempt to recover lost profits and 

consequential damages for a failure to deliver.15 The practical effect of 

enforcing § S(a) as it is written is to bar recovery of lost profits and 

consequential damages for any of the present breach of contract claims.16

 

15 Musket makes several arguments regarding the applicability of § S(b), which is 

arguably in conflict with the exclusivity provision in the Confirmation. While we disagree with 

Musket’s position, we do not address those arguments because § S(a) is not in conflict with any 

other provision of the Agreement and should be read to have full force and effect under New York 

law. 

16 We note that Musket has neither sought nor presented any arguments regarding 

general damages. 

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2. Whether Musket Can Invoke Alternative #2 to Recover Damages 

from Suncor 

The district court granted Suncor summary judgment on Musket’s 

breach of contract claims for failure to comply with compensation provisions 

Alternative #1 and Alternative #2 of the Agreement. Those provisions describe 

specific conditions under which Suncor would compensate Musket for failure 

to deliver nominated volumes of crude oil set forth in the Agreement. Musket 

appeals only the district court’s grant of summary judgment on Musket’s claim 

that Suncor failed to comply with Alternative #2.17 Reading the language of 

Alternative #2 and the Agreement as a whole, the district court determined 

there were two conditions precedent before Alternative #2 could be applied. 

The district court found that Musket and Suncor must have (1) exhausted 

reasonable commercial efforts, and (2) still been unable to identify a profitable 

market for a given committed volume. The decision to grant summary 

judgment was based on the district court’s conclusion that Musket failed to 

provide sufficient evidence that the parties were unable to identify a profitable 

market. 

The district court rejected Musket’s argument that the court should have 

presumed the parties were unable to identify a profitable market on given 

committed volumes or Suncor would have delivered the entire committed 

volumes to Musket. The district court found Musket’s position unpersuasive 

because, while there must have been a market-based reason for the parties’ 

decision to agree on the delivery of fewer barrels than the committed volume 

stated in the Agreement each month, Musket must provide sufficient evidence

indicating there is an issue of material fact that both parties exhausted 

 

17 Musket does not appeal the grant of summary judgment on the claim for failure to 

comply with Alternative #1.

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reasonable commercial efforts and were unable to identify a profitable market 

for a specific committed volume. As evidence that both conditions precedent 

were met, Musket provided statements from a Musket managing director and 

vice president, who testified that the parties could not locate a profitable 

market for the full committed volumes for almost every month of the 

Agreement, and could not identify a profitable market for the committed 

volumes Suncor did not deliver. The district court found those statements 

conclusory and granted summary judgment in Suncor’s favor.

We agree with the district court and conclude that Musket has failed to 

provide evidence that the parties met the conditions precedent to create

obligations under Alternative #2. Alternative #2 of the Confirmation states in 

relevant part:

Alternative #2: Procedure if Parties are unable to identify a 

Profitable Market 

If after exhausting reasonable commercial efforts the Parties are 

unable to identify a profitable market for a given Committed 

Volume then this Alternative #2 applies: 

Seller shall: 

(i) be relieved of its obligation to physically deliver the applicable 

Committed Volume to Buyer; and 

(ii) instead of physical settlement of the applicable Committed 

Volume, there will be deemed delivery to Buyer of the applicable 

Committed Volume, and Seller will pay Buyer $2.50 per barrel 

associated with the said Committed Volume. The foregoing forms 

the basis for the take or pay scenario insofar as Seller is committed 

to delivering a Committed Volume pursuant to this Transaction.

(emphasis added).18 Based on a plain reading of the provision, to trigger 

Alternative #2, the parties must have exhausted reasonable commercial efforts 

 

18 We note that Musket seeks liquidated damages for its failure to comply claim. The 

Agreement does not expressly bar recovery for liquidated damages. Moreover, § S of the Master 

Agreement creates exceptions to § S(a)’s general bar on consequential damages for those 

“expressly set forth in this Agreement.” Therefore, liquidated damages are recoverable under the 

Agreement. “Whether a contractual provision represents an enforceable liquidated damages 

provision or an unenforceable penalty is a question of law.” United Title Agency, LLC v. Surfside-

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and still failed to identify a profitable market for a given Committed Volume.

Musket asserts that the district court “added” the reasonable commercial 

efforts requirement. Musket’s assertion is unpersuasive because the plain “if” 

and “then” language of the provision creates two conditions precedent that 

must be met before Alternative #2 can apply. See Oppenheimer & Co. v. 

Oppenheim, Appel, Dixon & Co., 86 N.Y.2d 685, 691 (1995) (“[T]he . . . 

agreement unambiguously establishes an express condition precedent rather 

than a promise, as the parties employed the unmistakable language of 

condition (‘if,’ ‘unless and until’).”).

Musket contends Alternative #2 is a “take or pay” scenario for Musket, 

which is proof the parties did not have to work together before Alternative #2 

could be invoked. In addition, Musket asserts Alternative #2 could be invoked 

anytime Suncor unilaterally failed to deliver a full committed volume. Musket 

essentially argues Suncor’s failure to deliver alone is proof there was no 

profitable market at a given time. According to Musket, Suncor is required to 

pay the Alternative #2 fees anytime it fails to deliver a full committed volume 

as contemplated by the Agreement. As evidence to support its theory, Musket 

relies on the testimony of its managing director and vice president, who 

articulated the thinking underlying Musket’s profitable market argument. The 

 

3 Marina, Inc., 885 N.Y.S.2d 334, 335 (2009). Parties to an agreement have the right to contract 

for liquidated damages unless the clause is unconscionable or contrary to public policy. Truck 

Rent-A-Ctr., Inc. v. Puritan Farms 2nd, Inc., 41 N.Y.2d 420, 423–24 (1977). Suncor has not 

presented such arguments. Read liberally, Alternative #2 contemplates liquidated damages when 

the provision applies. See id. (“Liquidated damages constitute the compensation which, the 

parties have agreed, should be paid in order to satisfy any loss or injury flowing from a breach of 

their contract.”). Although the provision does not expressly use the word damages, subsection (ii) 

entitles Musket to $2.50 per barrel for Suncor’s breach of the provision. See id. (“[A] liquidated 

damages provision is an estimate, made by the parties at the time they enter into their agreement, 

of the extent of the injury that would be sustained as a result of breach of the agreement.”). 

Because we conclude that Musket did not meet the conditions precedent to trigger payment under 

Alternative #2, we do not address whether Musket could be entitled to liquidated damages. 

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district court noted that Musket submitted some evidence that Suncor was 

unable to identify a profitable market for deliveries, but not evidence that both

parties failed to identify a profitable market after exercising reasonable 

commercial efforts. 

We also disagree with Musket’s presumption theory. There must be 

evidence indicating there is an issue of material fact that both parties 

exhausted commercially reasonable efforts and were still unable to identify a 

profitable market before the court could apply Alternative #2. Musket has not 

provided such evidence, and its reliance on conclusory statements is 

insufficient. 

Accordingly, we affirm the district court’s grant of summary judgment 

on Musket’s breach of contract claim for failure to comply with the 

compensation provisions.19

C. Summary Judgment on Suncor’s Breach of Contract 

Counterclaims

Suncor appeals the district court’s grant of summary judgment on its

breach of contract counterclaims against Musket for failure to purchase and 

receive the nominated volumes of crude oil.20 The district court granted 

 

19 In addition to granting summary judgment on Musket’s breach of contract claims on the 

grounds previously stated, the district court determined, in the alternative, Suncor was entitled 

to partial summary judgment on the breach of contract claims related to delivery deficiencies

because Musket failed to provide written notice of the deficiency claims as § S of the Master 

Agreement requires. On appeal, Musket argues, in part, it consistently provided Suncor with 

updates on the volumes of barrels of crude oil delivered to Musket, which should have made 

Suncor aware it was not complying with the Master Agreement. While we agree with the 

conclusion reached by the district court—that notice of deficiencies is not equivalent to notice of 

claims against Suncor for those deficiencies—we need not elaborate on this alternative ground. 

The grant of summary judgment on Musket’s breach of contract claims was proper. 

20 The district court granted summary judgment in favor of Musket on all of Suncor’s 

counterclaims. The district court did not address Suncor’s request for attorneys’ fees and Suncor 

makes no argument regarding the request for attorneys’ fees on cross-appeal. 

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summary judgment regarding Suncor’s counterclaims on three separate 

grounds. 

We conclude the district court was correct in granting summary 

judgment on Suncor’s counterclaims against Musket, albeit for reasons that 

differ from the district court regarding one of the grounds for dismissal.

1. Whether Suncor Can Recover Damages for Musket’s Failure to 

Provide Sufficient Railcars at the Windsor Terminal

First, the district court determined paragraph (ii) of the additional 

provisions section of the Confirmation applied to Suncor’s breach of contract 

counterclaim for Musket’s failure to provide sufficient railcars, and found the 

claim required proof of a mutual agreement on the Alternative Buyer/Delivery 

Point as defined in the Confirmation. The district court concluded Suncor failed 

to raise a genuine issue of material fact to establish the existence of such a 

mutual agreement and granted Musket summary judgment on the claim.

We agree. Paragraph (ii) of the additional provisions states:

If Buyer’s failure to provide rail cars, as averaged over three (3) 

consecutive months, unreasonably interferes with Seller’s ability to 

ratably deliver Product to the Windsor Terminal causing Seller to 

deliver to Alternate Buyer/Delivery Point, then Buyer agrees to pay 

Seller $1.50 for each barrel associated with the said three (3) 

month period that Seller delivered to such Alternate 

Buyer/Delivery Point.

(emphasis added).21 The district court noted that the court had to determine 

whether the “Alternate Buyer/Delivery Point” required mutual agreement 

before the court could consider any evidence of such an agreement. Suncor 

 

21 As an initial matter, this provision contemplates liquidated damages when paragraph 

(ii) applies. See supra note 17; see also Truck Rent-A-Ctr., 41 N.Y.2d at 423–24 (“Liquidated 

damages constitute the compensation which, the parties have agreed, should be paid in order to 

satisfy any loss or injury flowing from a breach of their contract.”). We conclude that Suncor did 

not meet the conditions precedent to trigger payment under paragraph (ii). Therefore, we do not 

address whether Suncor could be entitled to liquidated damages.

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argues that the district court’s determination was based on an incorrect 

interpretation of the Agreement, and nevertheless, Suncor presented more 

than enough evidence to establish a genuine issue of fact that the parties did 

reach a mutual agreement for delivery to at least one of three alternative buyer

points. Suncor’s underlying contention is that the district court applied an 

incorrect definition to “Alternative Buyer/Delivery Point.” 

The definition of “Alternate Buyer/Delivery Point” is unambiguous when 

one considers the Agreement in its entirety. There is no definitions section in 

the Confirmation, however, “Alternative Buyer/Delivery Point” appears in 

paragraph (ii) and in Alternative #1. The term is capitalized and in bold the 

first time it appears, in Alternative #1. The provision states:

Seller is relieved of its obligation to sell such applicable Committed 

Volume to Buyer and may sell the applicable Committed Volume 

directly to a third party and at a mutually agreed upon alternate 

delivery point (“Alternate Buyer/Delivery Point”); provided 

that, Seller will reimburse Buyer for all of its direct cost associated 

with Buyer’s operation of the Windsor Terminal, including freight, 

terminal fees, rail car leases at the rate of $1,200.00 (per rail car 

per month) plus a $2.75 per barrel fee.

In the district court, Musket argued that the definition is “a third party and at 

a mutually agreed upon alternate delivery point.” Suncor argued that the 

“mutually agreed upon” portion of that phrase does not make sense—basically 

asserting that “Alternate Buyer/Delivery Point” means “a different buyer and 

delivery point.” Considering how terms are defined throughout the Agreement, 

Suncor’s definition is incorrect. 

When considering whether a contract term “is unambiguous, language 

should not be read in isolation because the contract must be considered as a 

whole.” NRT New York, LLC v. Harding, 16 N.Y.S.3d 255, 258 (N.Y. App. Div. 

2015) (citations omitted). “If the language of the contract is susceptible of more 

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than one reasonable interpretation, the contract will be considered 

ambiguous.” Id. The question of whether a contract—and its terms—is 

unambiguous, is a question of law. Id. A court should not allow extrinsic and 

parol evidence of the parties’ intent to be admitted when the contract is 

unambiguous on its face. Id.

Throughout the Agreement, important terms—such as “Term”, 

“Committed Volumes,” and “Windsor Terminal”—are bold and capitalized the 

first time the term appears, signaling that the terms are defined terms of the 

Agreement when they first appear. The same is true of the “Alternate 

Buyer/Delivery Point.” As the district court noted, if these sophisticated parties 

wanted the term to have a different definition in paragraph (ii), they would 

have used a different uncapitalized and nonbold term in each paragraph.

We agree with the district court’s conclusion that, in entering the 

Agreement, Suncor agreed to obtain a mutual agreement before diverting its 

crude oil to another delivery point when Musket could not receive the full 

shipment; as the definition of “Alternate Buyer/Delivery Point’ expressly states 

in Alternative #1. We now turn to Suncor’s contention that it provided 

sufficient evidence of mutual agreement to survive summary judgment.

Suncor provides evidence that it delivered crude oil that Musket could 

not receive to three alternate buyers or delivery points. Suncor directs this 

court to a declaration made by its crude oil trader stating that Musket never 

prohibited Suncor from unilaterally delivering barrels of crude oil to the 

alternate points when the Windsor Terminal could not take the barrels. Suncor 

also presents strings of emails—transmitted during December 2013; February 

2014; April 2014; May 2014; June 2014; and February 2015—that highlight a 

host of problems with capacity at the Windsor Terminal and that indicate 

Musket would turn trucks away after the terminal reached capacity. The 

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emails also indicate that Suncor employees had internal discussions about 

diverting barrels of crude oil to at least three other locations. There are also 

emails that indicate at least one Musket employee knew of at least one of the 

alternate delivery points used by Suncor. 

The evidence provided by Suncor does not raise an issue of material fact 

as to whether there was a problem with the railcars at the Windsor Terminal 

for a period of three months that caused both parties to agree on alternate 

buyers at alternate delivery points during that period. At most, the evidence 

indicates that such an agreement existed on at least one day for at least one 

shipment. The evidence is insufficient to create a genuine issue of material fact

that an agreement existed to trigger the obligations of paragraph (ii). 

The district court was correct in granting summary judgment on the 

breach of contract counterclaim for failure to provide sufficient railcars. 

2. Whether Suncor Can Recover Damages for Musket’s Failure to 

Receive

Second, the district court concluded that the Agreement does not support 

Suncor’s general breach of contract counterclaim seeking damages under § S. 

Because Suncor seeks lost profits or consequential damages for the general 

breach of contract counterclaim, we agree.

Suncor requests “actual damages” as recovery for the breach of contract 

counterclaims. However—as stated previously—under New York law, a party

may plead two types of damages in a contract case: (1) general damages and 

(2) consequential damages. PNC Bank, Nat. Ass’n v. Wolters Kluwer Fin. 

Servs., Inc., 73 F. Supp. 3d 358, 370 (S.D.N.Y. 2014). A party alleging breach 

of contract is not required to specifically plead general damages, as those 

damages directly flow from and are considered the “natural and probable”

consequence of the alleged breach. See Bi-Econ. Mkt., Inc. v. Harleysville Ins. 

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Co. of New York, 10 N.Y.3d 187, 192 (2008) (“[T]he nonbreaching party may 

recover general damages which are the natural and probable consequence of 

the breach.”); see also Keefe v. Lee, 197 N.Y. 68, 71 (1909) (noting a plaintiff 

“may recover such damages as necessarily, usually and immediately flow [from 

injury], under a general allegation in the complaint that damages have been 

sustained by him by reason of such injury”). Conversely, consequential 

damages must be alleged. Vista Food Exch., Inc. v. BenefitMall, 31 N.Y.S.3d 9, 

11 (N.Y. App. Div.), leave to appeal denied, 28 N.Y.3d 902 (2016). 

The district court determined that the Agreement does not support 

Suncor’s general claim for damages outside of the provisions of paragraph (ii) 

and paragraph (iii) of the Confirmation, without addressing Suncor’s failure to 

specify its claim for damages. On appeal, Suncor argues that its general breach 

of contract counterclaim for Musket’s alleged failure to purchase and receive 

nominated volumes of crude oil is “essentially the mirror image” of Musket’s 

breach of contract claim against Suncor for failure to deliver. Despite this 

acknowledgment, Suncor contends § S(a) of the Master Agreement 

unambiguously prevents recovery of the sought after damages for all the 

breach of contract claims related to the delivery and receipt of nominated 

volumes of crude oil shipments. Further, Suncor contends that it would be 

inconsistent for this court to allow one of the claims to remain while affirming 

the dismissal of the other. We interpret the arguments presented by Suncor as 

a concession that it too is seeking lost profits and other consequential damages 

for its general breach of contract counterclaim. Accordingly, we conclude that 

§ S(a) bars recovery for Suncor’s breach of contract counterclaim for lost profits 

and other consequential damages in this case.22

 

22 As acknowledged above, general damages are assumed to flow naturally from an 

alleged breach of contract. Because neither party has presented arguments regarding general 

damages related to the breach of contract claims for failure to deliver and failure to receive, 

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We affirm the grant of summary judgment on Suncor’s general breach of 

contract counterclaim for Musket’s failure to purchase and receive the 

nominated volumes of crude oil. 

3. Whether Suncor Can Recover Damages for Musket’s Failure to 

Receive Because the Windsor Terminal Lacked Sufficient Capacity

Finally, the district court determined that paragraph (iii) of the 

additional provisions applied to the counterclaim for failure to ensure the 

Windsor Terminal had sufficient capacity to receive the nominated volumes of 

crude oil and found that counterclaim required proof Musket failed to use 

reasonable commercial efforts in attempting to comply with its obligations 

regarding the Windsor Terminal. The district court concluded Suncor failed to 

present evidence Musket did not use reasonable commercial efforts and 

granted summary judgment on the counterclaim in favor of Musket.23

For reasons that differ from the district court’s, we affirm. Suncor’s 

counterclaim for Musket’s failure to maintain and expand the Windsor 

Terminal seeks damages under § S in connection with Musket’s failure to 

purchase and receive the committed volumes of crude oil. Therefore, the 

Agreement does not support Suncor’s request for damages on that 

counterclaim. 

Under the terms of the Confirmation, Suncor’s remedy for deficiencies 

related to the capacity and expansion of the Windsor Terminal was contract 

termination. As much is stated in the provision discussing expansion of the

terminal and the additional provisions. The district court also acknowledged

 

any arguments addressing general damages are waived. See Sama v. Hannigan, 669 F.3d 

585, 589 n.5 (5th Cir. 2012) (noting that issues not argued on appeal are waived).

23 The district court granted summary judgment in favor of Musket on all of Suncor’s 

counterclaims. The district court did not address Suncor’s request for attorneys’ fees and Suncor 

makes no argument regarding the request for attorneys’ fees on cross-appeal.

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that the Agreement granted Suncor the right to terminate the Agreement for 

any reason if Musket did not meet its obligations regarding the Windsor 

Terminal. Significantly, the Confirmation states that Suncor’s right to 

terminate the contract would not limit “its rights and remedies” under the 

Agreement.

During the district court proceedings, Suncor described its counterclaim 

related to the Windsor Terminal as a claim against Musket “for breach of the 

Agreement based on Paragraph (iii) of the Additional Provisions and Musket’s 

liability under § S.” Suncor further stated that “[t]hese provisions deal with 

Musket’s obligation to purchase the crude oil sold by Suncor and to make the 

Windsor Terminal capable of ratably receiving the agreed-upon volumes of 

crude oil.” The district court interpreted Suncor’s explanation to mean that 

Suncor alleged breaches of paragraph (ii) and (iii) and damages available for 

the alleged breach of paragraph (iii) under § S. Later, in response to Musket’s 

argument that Suncor did not have evidence that Musket failed to use 

“reasonable commercial efforts” as required by paragraph (iii), Suncor argued 

that its counterclaim was not limited by the “reasonable commercial efforts” 

clause because the Agreement required Musket to receive the nominated

volumes and expand the Windsor Terminal to be able to receive the nominated

volumes. The district court determined that Suncor failed to show an issue of

material fact that Musket did not use reasonable commercial efforts in 

ensuring the Windsor Terminal had sufficient capacity to receive the

nominated volumes of crude oil. 

The district court did not need to evaluate whether Musket used 

reasonable commercial efforts to comply with paragraph (iii) because § S does 

not provide the damages remedy Suncor seeks for the alleged breach. A plain 

reading of the Agreement indicates that the parties did not contemplate 

damages under § S for a failure to maintain or expand the Windsor Terminal. 

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Section S only authorizes damages for Musket’s failure to purchase or receive

the committed volumes under § S(c). That section contains a cover 

requirement—authorizing damages in an amount equal to the positive 

difference between the amount Musket would have paid under the Agreement 

for a non-purchased volume (referred to as “Quantity” in the Agreement) and 

the amount Suncor received in covering the non-purchased volume by selling 

to a third party. That amount would be the only damages that would naturally 

flow from Musket’s alleged breach and Suncor has not presented that claim for 

damages at any stage in this case.

Therefore, despite the attempt to disguise its counterclaim, Suncor seeks 

damages outside the scope of § S(c) as a remedy for the alleged breach of 

paragraph (iii). There has been no evidence provided to indicate the 

sophisticated parties in this case contemplated the damages Suncor seeks. 

Since lost profits and other consequential damages are barred by § S(a), Suncor 

has not presented a valid damages claim for Musket’s alleged failure to ensure 

the Windsor Terminal had sufficient capacity to receive the nominated 

volumes of crude oil.

We affirm the district court’s grant of summary judgment on other 

grounds.

IV. CONCLUSION 

For the reasons stated above, the district court’s partial grant of Suncor’s 

motion to dismiss is AFFIRMED, the district court’s partial grant of Suncor’s 

motion for summary judgment is AFFIRMED, and the district court’s grant of 

Musket’s motion for summary judgment is AFFIRMED. 

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