* 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.

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 07-20522

CANATXX ENERGY VENTURES, INC.,

Plaintiff-Appellee,

v.

GENERAL ELECTRIC CAPITAL CORP.,

Defendant-Appellant.

Appeal from the United States District Court

for the Southern District of Texas

USDC No. 4:99-cv-04425

Before BARKSDALE, BENAVIDES AND DENNIS, Circuit Judges.

FORTUNATO P. BENAVIDES, Circuit Judge:*

Appellant General Electric Capital Corporation (“GECC”) appeals from the

district court’s judgment, following a jury trial, awarding actual and exemplary

damages for breach of fiduciary duty, constructive fraud, unfair competition, and

civil conspiracy. For the following reasons, we reverse the judgment of the trial

court and render judgment in favor of Appellant on all claims. 

United States Court of Appeals

Fifth Circuit

F I L E D

October 16, 2008

Charles R. Fulbruge III

Clerk
No. 07-20522

2

I. 

Plaintiff-Appellee Canatxx Energy Ventures, Inc. (“Canatxx”), is a

Texas-based energy project developer. In November 1996, Canatxx and General

Electric Power Systems, Inc.(“GEPSI”), signed a memorandum of understanding

(“MOU”) initiating the early stages of a joint project, conceived by Canatxx, to

integrate a gas turbine electric power plant with a nearby gas storage facility

near Fleetwood, England. The MOU also included another prospective power

plant location in Anglesey, Wales. Under the MOU, Canatxx was the developer

of the project and initially owned the project assets, while GEPSI provided

funding and was thereby able to accrue up to a fifty percent equity interest in

the project. The MOU named "GE Capital Capital Markets Group" as the

financial advisor to the project. In July 1997, Canatxx and GEPSI signed an

exclusive financial advisory agreement (“FAA”) with the "Capital Markets Group

of GE Capital Ltd.," which is described therein as an affiliate of Appellant

GECC. 

Disagreements arose and Canatxx and GEPSI signed an agreement ending

the joint project (“Dissolution Agreement”). Under the terms of the Dissolution

Agreement, Canatxx received the gas storage portion of the joint project (the

“Gas Storage Project”), the Anglesey power project, and approximately $3.6

million, while GEPSI received the Fleetwood power project. The Dissolution

Agreement contained a release and indemnification provision that granted

releases to each party and their respective affiliates for any claims “arising from

or in connection with”the assets they received. Appellant GECC was not a party

to the Dissolution Agreement. 

In November 1999, Appellee Canatxx sued GEPSI in federal district court,

alleging breach of fiduciary duty, constructive fraud, unfair competition, and

civil conspiracy. GEPSI moved to compel arbitration under an arbitration clause

contained in the Dissolution Agreement. Canatxx added identical claims against
No. 07-20522

1 After Canatxx rested and before GECC opened its case, GECC orally moved for

judgment as a matter of law based on the release clause in the Dissolution Agreement. At the

conclusion of the trial and before the case was submitted to the jury, GECC again presented

its motion for judgment as matter of law. The district court denied both motions. 

3

Appellant GECC. The district court granted GEPSI's arbitration motion, but

refused to stay the claims against GECC or compel their arbitration. This court

reversed in part, holding that GECC was entitled to a stay but was not entitled

to an order compelling arbitration. Hill v. Gen. Elec. Power Sys., 282 F.3d 343

(5th Cir. 2002). Canatxx then dismissed with prejudice its claims against

GEPSI, allowing the instant litigation against GECC to proceed. 

The district court prohibited the parties from filing any summary

judgment motions in the underlying proceedings. During the course of the trial,

Canatxx argued that GECC conspired with GEPSI to force Canatxx out of the

joint project, prevented Canatxx from obtaining crucial third-party project

funding, and used its status as financial advisor to deter third-party financing

offers while failing to perform its assigned tasks under the FAA. The jury found

GECC committed a breach of its fiduciary duty to Canatxx, constructive fraud,

unfair competition, and civil conspiracy, and awarded $136,000,000 in actual

damages. It also awarded $700,000 in exemplary damages based on a finding

that GECC engaged in malicious, wilful, fraudulent, or recklessly indifferent

conduct.

After the jury verdict was rendered, GECC filed a renewed motion for

judgment as a matter of law and a motion for a new trial.1In its motion for

judgment as a matter of law, GECC asserted, inter alia, that the language ofthe

release and indemnification provision ofthe Dissolution Agreement had released

GECC—as an affiliate of signatory GEPSI—from any liability for the claims

asserted by Canatxx. The district court overruled both of GECC's motions and

reasoned that, with regard to the release, GECC had provided no evidence that

it was an affiliate of GEPSI. This appeal followed. For the reasons explained
No. 07-20522

2 GECC notes in its brief that the Dissolution Agreement is governed by New York law

under the agreement’s choice-of-law provision, but concedes that the interpretation of the

agreement is the same under both Texas and New York law and cites predominantly Texas

cases. 

4

below, the district court erred in overruling GECC’s motion for judgment as a

matter of law. 

II.

The district court's denial of a motion for judgment as a matter of law is

reviewed de novo. Fluorine on Call, Ltd. v. Fluorogas Ltd., 380 F.3d 849, 855

(5th Cir. 2004). The Court reviews de novo the interpretation of a contract.

Advocare Int'l LP v. Horizon Labs., Inc., 524 F.3d 679, 685 (5th Cir. 2008).

Under Texas law, a release is subjectto the rules of construction governing

contracts.2 See Williams v. Glash, 789 S.W.2d 261, 264 (Tex. 1990). To

effectively release a claim, the releasing instrument must “mention” the claim

to be released—meaning that the claim must come within the contemplation of

the release provision when viewed in the context of the contract in which the

release provision is contained. Stinnett v. Colorado Interstate Gas Co., 227 F.3d

247, 255 (5th Cir. 2000) (applying Texas law). A release discharges only those

persons or entities that it names or specifically identifies. McMillen v.

Klingensmith, 467 S.W.2d 193, 196 (Tex. 1971).

Section 8.1 of the Dissolution Agreement entered into by GEPSI and

Canatxx states "GEPSI and its Affiliates shall incur no liability . . . for any loss,

cost, expenses or claims whatsoever arising from or in connection with . . . the

Gas Storage Project whether such loss, cost, expenses, or claims prior to or post

the Effective Date." The term “Affiliate” is defined in § 1.3 of the Dissolution

Agreement as any entity “which is owned or controlled by an entity or person

which owns or controls, a Party.” “Own” is defined as "the ownership, directly

or indirectly, of a property interest in an asset, company, partnership or other
No. 07-20522

3 We note that in addition to the statements in the pre-trial order, GECC points to

factual assertions made by Canatxx in their pleadings, testimony by Canatxx's principals

(including its CEO), and admissions by Canatxx’s counsel during trial—all of which confirm

that GEPSI and GECC were both owned by General Electric Company. In light of this

additional evidence, the panel is at a loss to understand the district court’s determination that

there was no evidence to support GECC’s affiliate status. 

4 GECC also submitted additional documentary evidence of its affiliate status with its

motion for judgment as a matter of law. The district court excluded the evidence. Because the

pre-trial order establishes GECC’s affiliate status, there is no need to determine the

admissibility of the evidence submitted by GECC with its motion. 

5

entity." Therefore, if GECC is an affiliate of GEPSI, as that term is defined in

the Dissolution Agreement, GECC was released from all claims arising from or

in connection with the Gas Storage Project.

In the pre-trial order, Canatxx specifically admitted that GEPSI and

GECC are affiliates. A joint pretrial order “supersedes all pleadings and governs

the issues and evidence to be presented at trial.” McGehee v. Certainteed Corp.,

101 F.3d 1078, 1080 (5th Cir. 1996); Loose v. Offshore Nav., Inc., 670 F.2d 493,

498 (5th Cir. 1982) (holding that an admission in a pre-trial order is a waiver of

the assertion of a contrary position). Specifically, Canatxx's proposed statement

of the case states "[a]mong [GE's] businesses are a unit called GE Power . . . and

a unit called GE Capital . . . . All the GE companies are part of the General

Electric Corporation and they all work together toward enhancing GE

Corporation's bottom line."3 Canatxx thereby admitted that both GECC and

GEPSI are either owned or controlled by General Electric Company (“GE”), and

thus qualify as “Affiliates” under the plain language of the Dissolution

Agreement.4

Furthermore, the claims asserted by Canatxx fall within the scope of the

release contained in § 8.1 of the Dissolution Agreement. Canatxx argues that

§ 8.1 of the Dissolution Agreement is not a release, but merely an

indemnification provision. However the language of the section, which states

that GEPSI and affiliates "shall incur no liability"—and makes no mention of
No. 07-20522

6

indemnity—is clearly indicative of a release. In addition, it would be illogical to

construe § 8.1 as an indemnity provision when § 8.2, immediately following the

provision at issue, constitutes a fully formed indemnity provision. 

The release contained in § 8.1 expressly relieves GEPSI and its affiliates

of all claims and liability “arising from or in connection with” the Gas Storage

Project. Under Texas law, phrases such as “arising from” or “related to” require

only an incidental“causal connection [with] or relation [to]” the described event

or object. RLI Ins. Co. v. Union Pacific R.R. Co., 463 F. Supp. 2d 646, 650–51

(S.D. Tex. 2006) (citing Utica Nat'l Ins. Co. v. Am. Indem. Co., 141 S.W.3d 198,

203 (Tex. 2004)). Here, all of Canatxx’s claims relate to alleged wrongdoing by

GECC in relation to the proposed joint project—defined as the integration of the

Gas Storage Project and the Fleetwood power plant. Certainly, there is at least

the required incidental relationship between Canatxx’s claims and the Gas

Storage Project for the claims to fall within the scope of the release. 

III.

The pre-trial order and the release provision ofthe Dissolution Agreement

establish that Appellant GECC was effectively released from the claims asserted

by Appellee Canatxx in the instant litigation. In light of the foregoing, we hold

that the district court erred in denying Appellant’s motion for judgment as a

matter of law on the grounds of release. Canatxx moved for leave to file

supplemental briefing but did not do so until after oral argument. The motion

for leave to file supplemental briefing is DENIED. We REVERSE the judgment

of the trial court and RENDER judgment in favor of Appellant on all claims.