### IN THE UNI TED STAT ES COURT OFAPPEALS FOR THE FIF TH CIRCU IT

No. 11-20264

In the Matter of: CAPCO ENERGY INCORPORATED; AMCO ENERGY, INCORPORATED
Debtors

------------------------ ------------------------ ------------------------ ------------------------ ------------ AMCO ENERGY, INCORPORATED, formerly known as Capco Offshore, Incorporated; CAPCO ENERGY INCORPORATED Appellants
v. TANA EXPLORATION COMPANY; TRT HOLDINGS, INCORPORATED; TRISTONE CAPITAL, LLC; RYDER SCOTT COMPANY, L.P. Appellees

Appeal from the United States District Court for the Southern District of Texas

Before CLEMENT, OWEN, and HIGGINSON, Circuit Judges. HIGGINSON, Circuit Judge: In a bankruptcy adversary proceeding, A m co Energy, Inc., f/k/a Capco Offshore, Inc., and Capco Energy, Inc. (together, “Capco”) b r ought claims of fraud and various business torts against Ryder Scott Company, L.P. (“Ryder”), U n i te d S ta te s C o u rt o f A p p ea l s

F i ft h C i rc u i t 

### F I L E D Janu ary30 , 20 12 Lyle W . Cayce Clerk Case: 11-20264 Document: 00511741521 Page: 1 Date Filed: 01/30/2012No. 11-20264

Tana Exploration Company, LLC (“Tana”), TRT H o ldings, Inc. (“TRT”), and Tristone Capital, LLC (“Tristone”). T h e claims arise out of a transaction in which Capco purchased from Tana certain oil and g a s r e s e rves located in the Gulf of Mexico. The bankruptcy court granted summary judgment i n favor of Ryder, Tana, TRT, and Tristone and dismissed the claims. Fo r t h e following
reasons, we affirm the district court’s affirmance of the bankruptcy co u rt ’s ruling.

FACTS AND PROCEEDINGS In early 2006, Tana decided to sell certain oil and gas properties located in the Gulf of Mexico (the “Properties”). Tana engaged Tristone to serve as its financial advisor and agent in marketing and selling the Properties. Tana also retained Ryder to review geological and engineering data, accounts, records, and othe r data in order to prepare a report estimating the reserves, future production, and income attributable to the Properties as of April 1, 2006 (the “April 1, 2006 Report”). Tristone utilized data provided by Tana, including well logs, histor i es, operations data, production, revenues, and the April 1, 2006 Report, to conduct its commercial evaluation of the Properties and prepare a Confidential Evaluation Brochure (“CEB”) for parties interested in placing a bid to purchase the Properties. The CEB made clear that Tana and Tristone disclaimed any warranty as to the accuracy, completeness, or materiality of the information or data contained in the CEB. In particular, the CEB stated that, “[a]ny financial forecasts in this Evaluation Brochure and accompanying materials are based on several estimates and assumptions that are subject to uncertain economic and

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competitive pressures, including future business decis i o n s that are subject to change.” The CEB urged prospective purchasers to cond u c t their own independent investigation and analysis of the Properties and the data set forth in the CEB. In order to receive the information regarding the Properties, Capco signed

a confidentiality agreement on April 11, 2006. In addi t i o n to promising not to disclose information categorized as confidential, Capco accepted Tana’s express and highli gh t e d disclaimer of any responsibility for the accuracy of the information Capco received. Capco also agreed that it would “rely solely on its

own independent evaluation and analys is of the Information when deciding whether or not to submit a bid or offer, enter into a definitive agreement or consummate any Transaction covering one or more of the Properties.” On May 3, 2006, Ca p c o submitted a successful bid to purchase the Properties. Capco acknowledged that i t s b i d was subject to “deal points” attached to the CEB. One specific deal point w a s t h a t, “neither [Tana] nor [Tristone] mak e any r e p r e s e nt atio n or w arr anty a s to the accuracy, completeness

or materiality of any information or data (written or oral) that may be furnished to [Ca p c o ] in connection with this proposed transaction. In entering into this transaction, [Capco] will rely solely on its independent investigation of the Properties.” Following Tana’s acceptance of Capco’s bid, the parties engaged in lengthy negotiations to draft a Purchase and Sale Agreement (“PSA”). The parties executed the PSA on June 2, 2006. The PSA specifically provided:

S E L L E R H E R E BY EXPRESSLY NEGATES AND DISCLAI M S , AND BUYER HEREBY WAIVES, AND ACKNOWLEDGES THAT SELLER HAS NOT MADE, ANY

3 Case: 11-20264 Document: 00511741521 Page: 3 Date Filed: 01/30/2012No. 11-20264 REPRESEN TATION OR WARRANTY, EXPRESS OR I M P L I E D , R E LAT I N G T O ( a) T H E A C C U RA C Y , C O M P L E T E N E S S O R M A T E R I A L I T Y O F A N Y I N F O R M A T I O N , D A TA O R O T H E R MA T E R I A L S (WR ITTEN OR VERBAL) NOW, HERETOFORE, OR HEREAFTER FURNI S H E D T O BUYE R BY O R O N B E HAL F O F S E L L E R O R ( b ) P R O D U C T I O N R A T E S , RECOMPLETION OP P ORTUNITIES, DECLINE RATES, G E O L O G I C A L O R G E O P H Y S I C A L D A T A O R I N T E R P R E TAT I O N S , T H E Q UA L I TY , Q UA N T I TY , RECOVERABILITY OR COST O F RECOVERY OF ANY HYDROCARBON RESERVES, ANY PRODUCT PRICING ASSUMPTIONS, OR THE ABILITY TO SELL OR MARKET ANY HYDROCARBONS AFTER CLOSING. Furthermore, Capco represented that in making the decision to e n ter the agreement and consummate the transactions contemplated, it had relied solely

on the basis of its own independent due diligence investigation of the Properties and not on any representations or warranties outside of the PSA. On June 4, 2006, Ilyas Chaudh a ry , an employee with Capco, sent an email to Pat McInturff, an employee with Ryder, informing Ryder that Capco had executed a PSA to purchase the Properties. The e-mail also stated, “Union Bank of California will tentatively fund t h i s a c q u i sition. They have requested a meeting in Houston with [Ryder] engineers to revisit Tana & Capco properties. (I believe to determine the loan values).” Consistent with this lender request, 1

Capc o had pr evious ly cont rac ted Ryder to perfor m an analys is of Capc o’s exis ting oil 1 and gas res erves as of De cem ber 31, 2005 (t he “D ece mbe r 3 1 , 2 0 0 5 Repo rt” ). The cont rac t sp ecif ied that : (1) the evaluat ion wo uld enco mp ass both Capc o’s exis ting pr ope rti es as we ll as pr ope rti es Capc o cont em plat ed acqui ring at the tim e; (2) a pr elim inary evaluat ion wo uld tak e over tw o mo nths to com ple te; (3) th e e s tim ated cos t of Ryder ’s se rvice s wo uld be betw een $ 2 5 ,0 0 0 and $35, 000, wi th $12, 500 due im me diat ely bef ore Ryder ’s wo rk wo uld comm ence ; an d (4) Capc o wo uld fur nis h to Ryder se veral batc hes of dat a, inclu ding pr oduc tio n and geologi cal dat a. 4 Case: 11-20264 Document: 00511741521 Page: 4 Date Filed: 01/30/2012No. 11-20264

five days later, a meeting occurred on June 9, 2006, with representatives from Ryder, Union Bank of Cali f o r n i a (“UBOC”), and Capco in attendance. Two represent a t iv es from Ryder, Olga Basanko and Pat McInturff, made a presentation regarding the Properties, which, according to a Capco attendee, i n c l u d e d a detailed review of the April 1, 2006 Report Ryder had prepared for Tana. Following the meeting, Ryder sent an invoice to Capco in the amount of $ 2 , 0 3 2.50 for “services rendered in connection with the review of [Capco ’ s ]

rese rv e s and the Tana Acquisition Reserves with Union Bank of California.” Capco paid the invoice. In preparation for the closing of the transaction scheduled for August 31, 2006, a closing statement was sent to Capco on August 28, 2006, in accordance with the PSA. The closing statement provided Capco with a list of adjustments to the purchase price, including a credit to Capco for approximately $20 million in net production revenue that had accrued since April, 2 0 0 6

. The closing statement also included a footnote: “The August revenue (estimated at $6 million) will be forwarded upo n r e c e ipt as well. The majority of the August revenue will be received the last week of September.” Capco’s acquisition of the Properties closed on August 31, 2006. Months later, in early 2007, Capco hired Ryder to prepare an estimate of the remaining volumes of oil and gas reserve s , future production, and income attributable to the Properties as of December 31, 2006 (the “December 31, 2006 Report”). Capco claims that the December 31, 2006 Repo rt i n di c a ted that

reserves on a majority of the Properties were less than reflected on the earlier April 1, 2006 Report. On April 7, 2008, Capco filed for bankruptcy protection under Chapter 11.

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On August 28, 2008, Capco filed an adversary proceedin g in the U.S. Bankruptcy Court for the Southern District of Texas against Ryder, Tana, TRT, and Tristone

s e e k i n g rescission of the bill of sale and damages. Capco alleged that Ryd e r breached its professional obligations in its alleged contract with Capco. Capco also alleged that Tana, TRT, and Tristone made f raudulent representations regarding the Properties. On June 13, 2011, the bankruptcy court granted summary judgment in favor of Ryder, Tana, TRT, and Tristone. The bankruptcy court ruled that Capco had failed to raise a genuine issue of mater i a l f a c t with respect to whether Capco’s engagement of Ryder for the June 9, 2006 presentation was an implied contract creating a duty on Ryder to advise Capco regarding the purchase of the Properties. Because Capco conceded that all o f i t s c l aims against Ryder were contingent upon a contract between Capco a n d Ry der, the bankruptcy court dismissed Capco’s claims against Ryder. The bankruptcy court also ruled that Capco had failed to raise a genuine issue of material fact with respect to whether it had relied on the alleged m isrepresentations made by Tana, TRT, and Tristone. Accordingly, the bankruptcy court dismi s s e d C ap c o ’ s r e m ainin g cl ai m s against Tana, TRT, and Tristone. In a written decision, the district court affirme d t he judgment of the bankruptcy court. Amco Energy, Inc.; fka Capco Offshore, Inc., et al, v. Tana Exploration Co., et al , No. 10-CV-3846, slip op. at 9 (S.D. Tex. Mar. 24 , 2011)

STANDARD OF REVIEW AND APPLICABLE LAW We review the district court’s decision using the same standard of review that the district court applied to the bankruptcy court’s decisions. See Wells

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Fargo Bank of Texas N.A. v. Sommers (In re Amco Ins.) , 444 F.3d 690, 694 (5th Cir. 2006). We review de novo a bankruptcy court’s grant of summary judgment. Ingalls v. Erlewine (In re Erlewine) , 349 F.3d 205, 2 0 9 ( 5 t h Cir. 2003). A bankruptcy court’s grant of summary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Id. (citing Fed. R. Civ. P. 56(c); Bankr. R. 7056). 2

DISCUSSION A. Capco’s claims against Ryder On appeal, Capco ar gu e s t h a t Capco and Ryder entered into an implied contract whereby Ryder was to conduct an indep e n d e n t re-evaluation of the Properties and advise Capco regarding its closing o n the Properties, and that Ryder breached its professional responsibility and caused Capco financial harm because Ryder’s representations at the Jun e 9 , 2 0 06 meeting regarding the
accuracy of the reserve estimates allegedly were erroneous. Capco contends that its June 4, 2006 e-mail invitation to, and then the June 9, 2006 lender meeting with, Ryder representatives, along with its subsequent p ay m e nt for the meeting, sufficiently demonstrate that it impliedly had contracted Ryder to advise it with

Ryder argues that this cour t lack s juris dic tio n over this app eal beca use Capc o fai led 2 to com ply wi th Fede ral Rule of App ellat e Proc edur e 3(c)( 1)( C), wh ich requ ires an app ellant to “nam e t he cour t to wh ich the app eal is tak en. ” Fed. R. App

. P. 3(c)( 1). Ge nera lly, if ther e i s only one cour t to wh ich app ellant can app eal, we have for given a par ty’s fai lure to name this
cour t as the cour t to w hich the app eal is tak en. See e. g. , Uni ted Sta tes v. Ca ntwe ll , 470 F.3d 1087, 1088 (5t h Cir. 2006) (f indi ng this elem ent of Rule 3 me t wh ere only one avenue of app eal exis ts ); Mc Lem ore v. Landr y , 898 F.2d 996, 999 (5t h Cir. 1990) (s ame). But see Uni ted States
v. Pulga ri n-Osp ina , 182 F.3d 913, at *2 (5t h Cir. 1999 ) (unp ublis hed tabl e dec isi on) (d ism iss ing app eal for fai lure to nam e cour t to wh ich def enda nt wa s app ealing)

. Rule 3 mus t be liber ally cons tru ed in favorof app eals

. Smi th v. Bar ry , 502 U. S. 244, 248 (199 2). We fin d Capc o’s no tic e o f app eal suf fic ientt o s atis fy the requ irem ents of Rule3(c) (1)

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respect to its earlier purchase but prior to closing. Capco further contends that, based on such i m p l i e d contract, it had a right to rely on representations made by Ryder regarding the accuracy of reserve estimates in its April 1, 2006 Report. Because Ryder’s reserve estimates allegedly were incorrect, Capco claims Ryder committed professional negligence by representing that Capco could rely on the figures. 3 U n der Texas law, “[t]o establish liability for professional negligence, [ a] plaintiff must show the existence of a duty, a breach of that duty, and damages arising from the breach.” Great Plains Trust Co. v. Morgan Stanley Dean Witter & Co. , 313 F.3d 305, 314 (5th Cir. 2002). “‘The threshold inquiry in a negligence

case is duty.’” Id. (quoting Greater Houston Transp. Co. v. Phillips , 801 S.W.2d 523, 525 (Tex. 1990)); see also Banc One Capital Partners Corp. v. Kneipper , 67 F.3d 1187, 1198-99 (5th Cir. 1995). “The duty owed by a profess i o n a l t o his client derives from their c o n t r a ctual relationship and requires that the professional ‘use the skill and care in th e performance of his duties commensurate with the r e quirements of his profession.’” Fed. Sav. and Loan Ins. Corp. v. Texas Real Estate Counselors, I n c
. , 955 F.2d 261, 265 (5th Cir. 1992) (citing and quoting I.O.I. Sys., Inc. v. City of Cleveland, Texas , 615 S.W.2d 786, 790 (Tex. Civ. App.—Houston [1st Dist.] 1980, writ ref’d n.r.e.)); Dukes v. Philip Johnson/Alan Ritchie Architects, P.C. , 252 S. W

. 3d 586, 594 (Tex. App.—Fort Worth 2008, pet. denied), cert. denied , 129 S. Ct. 1032 (2009).

The bank rup tcy court dis mi ss ed all of Capc o’s clai ms agains t Ryder , inclu ding clai ms 3 of st atut ory f

r a u d , c om mo n law fr aud and fr audul ent indu cem ent, fr aud by non- dis clos ure, negligent mi sr epr es enta tio n, and dec ept ive tra de pr act ices

. On app eal, how ever, Capc o only add res se s the dis mi ss al in the cont ext of its pr ofe ss ional negligenc e clai m. There for e, we only add res s Capc o’s ar gume nts w ith res pec t to Capc o’s p rof es sio nal negligenc e c laim

.

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“[A] b i n di n g contract requires ‘(1) an offer; (2) an acceptance in strict compliance with the terms of the offer; (3) a meeting of t h e m i n ds; (4) each party’s consent to the terms; and (5) execution and delivery of the contract with intent that it be mutual and binding.’” Coffel v. Stryker Corp. , 284 F.3d 625, 640 n.17 (5th Cir. 2002) (quoting Co p e la n d v. Alsobrook , 3 S.W.3d 598, 604 (Tex. App. 1999)). “The determination of a meeting of the minds, and thus offer and acceptance, is based on the objective standard of what the parties said and did and n o t o n t h e ir subjective state of mind. Additionally, consideration is a fundamental element of any valid contract.” Cope la n d , 3 S .W.3d at 604 (citations omitted). The par ties do not dispute that a contract existed between Capco and Ryder for Ryder to appear at the June 9, 2006 meet i n g
. The issue before this court is whether Capco presented evid e n c e t o demonstrate a genuine issue of material fact about whether Ryder was contracted to provide an independent ree v a l u a t i on of the Properties and advice at the meeting regarding Capco’s decision to close on the Properties

. The extent of Capco’s relevant summary judgment evidenc e i s : ( 1) Capco’s June 4, 2006 e-mail invitation to a June 9, 2006 meeting for representatives from Capco, Ryder, and UBOC; (2) a July 13, 2006 bill of $2,032.50 for that meeting; and ( 3 ) an affidavit, dated August 20, 2010, from Ilyas Chaudhary (“Chaudhary”), the Capco representative, attesting to his recollections of the meeting. As both lower courts held, none of these pieces of evidence indicates that the implied contract established for the June 9, 2006 meeting was for anything more than Ryder’s presentation of the report it previ o u s ly had been retained by Tana to produce. Agreeing with the lower courts, we hold that nothing further agreed between them has been shown.

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Fi r s t , C a pco relies on the e-mail from Chaudhary to a Ryder representative advising that Capco had executed t h e P SA to acquire the Properties and stating t h a t a p o tential Capco lender had requested a meeting with Ryder engineers to discuss the Tana and Capco properties. In the e-mail, Chaudhary added that he believed the purpose of the meeting was to determine loan values. There is no indication in the e-mail that Capco was seeki n g an independent re-evaluation regarding the earlier purchase of the Properties. There is only a straightforward re-routed request from a potential Capco lender to discuss the Tan a properties, which were the subjects of a report Ryder previously had been retained to produce for Tana. Next, Capco relies on an invoice from Ry d e r to Capco following the meeting “for s e rvices rendered in connection with the review of [Capco’s]

reserves a n d the Tana acquisition reserves with Union Bank of California.” Again, there is no indication Capco contracted Ryder to provide an independent re-evaluation of the Properties regarding closing the transaction. The invoice 4 merely confirms that Ryder presented its pre-existing reports regarding Capco and Tana properties to Capco’s potential lender at this one-day meeting. F i nally, Capco relies on Chaudhary’s August 20, 2011 affidavit wh i c h describes the meeting that took place on June 9, 2006. The affidavit states that Basanko made a detailed prese n t a t i o n regarding the Properties. Chaudhary states a l s o that Basanko reviewed the April 1, 2006 Report in detail and di s cussed the data underlying the report. With respect to Chaudhary’ s professional expectation between Capco and Ryder for this meeting, Chaudhary

N o t ab l y , even thou gh Capc o requ es ted , and the invoic e ref lect s, dis cus sio n of bo t h 4 Capc o and Tana pr ope rti es , Capc o ass ert s that the June 9, 2006 me eti ng its elf wa s an im pli ed cont rac tual enco unte r to re- evaluat e oral ly the Tana pr ope rti es only, not the Capc o pr ope rti es
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states that “Cap co expected to receive the benefit of Ryder Scott’s professional services and independent judgment in this planned m e e ting.” Chaudhary further states, albeit u sing the passive voice, that, “it wa s made clear that the
purpose of the meeting was t o a s s u r e both Capco and UBOC that proceeding with the contemplated acquisition and financing was a sound decision.” Chaudhary’s affidavit extensively describes his and C a pco’s subjective expectations. Noticeably absent from Chaudhary’s affidavit, however, is any indication that Ryder agreed to provide anything beyond a presentation of the Apri l 1, 2006 Report it had prepared for Tana or that Ryder actually provided additional and new information regarding the Properties beyond the scope of the April 1, 2006 Report. Chaudhary’s affidavit fails to provide evidence indicating 5 that there was a meeting of the minds with respect to an indepen d e n t reevaluation Capco hoped it would receive from Ryder at the m e e t i n g
. Instead, when asked several times at his deposition whether he had ever asked anyone at Ryder to perform due diligence for Capco in connection with the Tana acquisition, Chaudhary admitted that he had no memory of a n y s u c h r equest made to Ryder, either verbally or in writing. Further, Chaudhary never asked McInturff and Basanko “to d o a n yt h ing in terms of evaluating the properties independent fr om the April 1, 2006 Ryder Scott report” nor did he request “an

Capc o argues that Ryder did , in fac t, pr ovide info rm atio n outs ide the sc ope of the 5 Apri l 1, 2006 Repo rt beca use Ryder wa s brou ght in to de t e r m i n e l oan values

. Firs t, the pr opo sit ion thatan engineeri ng fir m would be cont rac ted to provid e fina ncial lend ing advic e to a bank is im pr obable

. Sec ond, ther e is no me ntio n anyw here in Chaudha ry’s aff idavit that Ryder rend ere d suc h advic e to UBO C at the me eti ng. Third , it is undi sp uted that no wr itt en ass es sm ent, fina ncial or enginee ring, wa s genera ted for fir st hand use on June 9, 2006, or late r, to me mo rial ize any in dep ende nt find ings off ere d at the me eti ng. 11 Case: 11-20264 Document: 00511741521 Page: 11 Date Filed: 01/30/2012No. 11-20264

updated valuation of the properties after the April 1, 2006 report.” Moreover, 6 Chaudhary admitted that he was unaware of “McInturff doing anything besides reviewing the April 1, 2006 Report.” These circumstances demonstrate that Ca p c o did not contract for the original evaluation of the Properties, did not contract with Ryder independently to re-evaluate their previous Tana evaluation, and did not contract with Ryder for a new evaluation. These conclusions contradict Capco’s present contention that it paid Ryder $2,032.50 for an oral, one-day independent re-evaluation and updated warranty of the accuracy of the figures in the 184-page April 1, 2006 Report. As the courts below held, Capco presents no evidence that Ryder agreed to such a duty. Capco highlights other p o rtions of Chaudhary’s affidavit, arguing that Ryder provided professional services beyond presenting the report by vouching for the credibility of the figures in the April 1, 2006 Report. Specific a lly, Chaudhary attests that Basanko “indicated that the reserve estimates set forth in the April 1, 2006 report were ‘conservative,’ explaining that in the event there

was any question regarding the c h a racterization of any reserves as ‘proved’ or ‘probable,’ Ryder Scott would have characterized such reserves as ‘ p r ob ab le.’”

This adm iss ion is sup por ted by the rela tively palt ry amo unt Capc o paid for an allege d 6 inde pend ent evaluat ion of the Prop ert ies

. Capc o had pr evious ly engaged Ryder to pr ovide an analys is of othe r pr ope rti es in De cem ber, 2005, and the cos t of that evaluat ion wa s es tim ated to be bet we en $25, 000 and $35, 000, not inclus ive of add itio nal travel and oth er expe nse s. It is inco ngruous t hat six mo nths la ter , Ryderagr eedt o p rovid e a n i ndep ende nt re- analys is of the Prop ert ies for $2,0 32.5 0. As the bank rup tcy judge note d, it “d efi es reas on and expe rien ce to ass ert that Plaint iffs paid $2,0 00 for an inde p e n dent evaluat ion of value in a tra nsa cti on to pay $83 mi llion for mi nera l right s. ” In a d d i t i o n to this im plau sib ilit y, we note that an opp os ite c oncl usi on, infe rri ng a pr ofe ss ional re- evaluat ive dut y fr om a pr es enta tio n of an origi nal analys is, pr epa red cont rac tuall y for a dif fe r e nt enti ty, mi ght dis sua de autho rs of pr ofe ss ional rep ort s fr omp res enti ng t heirr epo rts t o a nyone othe r than an o riginalc lient

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Capco claims that because these characterizations were beyond the scope of the report and were unavailable to Capco prior to June 9, 2006, a new contractual relationship was established at the meeting. However, Capco’s own expert admitted that Tana’s prospectus and the April 1, 2006 Report itself set forth the distinction between “proved” and “probable,” and repr esented that the reserve estimates were conservative. Th e r e fore, not only were Basanko’s 7 representations within the scope of t h e Ap r i l 1, 2006 Report, but such categorizations were already available to Capco before the June 9, 2006 meeting. When comparing the April 1, 2006 Report and the June 9, 2006 presentation, there is no evidence that the presentation embellished the reserves report by giving professional assurances beyond the data. A further examination of the Chaudhary affidavit confirms that, though descriptive of Chaudhary’s expectations, it never describes Ryder’s acceptance of a duty to re-evaluate independently the Properties for Capco. To extract such

an engagement from Chaudhary’s affidavit, Capco is obliged to point selectively 8
to: (1) statements abo u t Capco’s expectations that do not contain any assumptions by Ryder of reciprocal obligations; (2) statements uttered after the

Acco rding to the “[ p] enult i m a t e p a r a grap h of Page 7 of Tana’s pr os pec tus and the 7 def init ion of Unp rovedr es erves includ ed in theApril 1str epo rt, 1s t par agrap h”: “Tana et al
ass ured any pot enti al pur chas er that Ryder Sco tt had dow ngrad ed any res erves wh ere ther e coul d be ques tio nable unde rlying dat a, suc h as uncer taint ies regar ding res ervoi r lim its and ulti mat e rec overi es , to Probable and Pos sib le res erves leaving only thos e wi thou t thes e uncer taint ies wi thin the Proved cat egory. This is a rep res enta tio n that the res erve es tim ates are cons ervat ive. ” Again, the tw o-m onth old rep ort is 184 pages long; a sim ilar engagem ent be tw een 8 thes e sam e partie s six mo nths earl ier cos t Capc o betw een $ 2 5 , 0 00 and $35, 000; and, as the bank rup tcy court highlighted , one wo uld have to ass ume that Capc o engaged Ryder for suc h
a cons equent ial r e - e v a luati on of the Prop ert ies aft er execut ing the PSA and wi thou t cont em plat ion of eit her a w rit ten cont rac t or wr itt en pr oduc t fr omt he engagem ent. 13 Case: 11-20264 Document: 00511741521 Page: 13 Date Filed: 01/30/2012No. 11-20264

meeting by a Ryder employee positioning himself for a po t e n t i al employment opportunity with Capco; and (3) statements which do not confirm a pre-existing contractual agreement, but instead describe the discussion occurring at the meeting itself. Capco argues that a general professional relationship existed between Capco and Ryder sufficient to confer professional liability on Ryder. It is the specific nature of the professional relationship, however, that determines what duty Ryder owed to Capco. See Fed. Sav. and Loan Ins. Corp. , 955 F.2d at 265 (“The duty owed by a professional to his cl i e n t derives from their contractual relationship

. . . .”). Capco’s evidence demonstrates only two engagements with Ryder prior to the closing of the acquisition: (1) Capco’s earlier, written contract with Ryder to produce the December 31, 2005 Report that was estimated to cost b e t w e en $25,000 and $35,000, and estimated to take over two mont h s t o p r o d u c e ; and (2) Capco’s June 4, 2006 e-mail invitation to Ryder to present o n June 9, 2006, for $2,032.50, the April 1, 2006 Report that Tana contracted Ryder to produce. By preparing the December 31, 2005 Report for Capco, and then by
p r e s e n t i ng the contents of the Capco December 31, 2005 Repor t as well as th e Tana April 1, 2006 Report to UBOC, Ryde r f u l f i lled its contractual duties to Capco. 9 Absent evidence demonstrating a me etin g of th e min d s b etw een Capco and Ryder speci f

i c a l l y establishing a duty beyond presenting the contents of the

C a p c o a l so rais es the iss ue of “w heth er the Bank rup tcy Court err ed in finding that 9 the acqui sit ion of the Tana Prop ert ies by Capc o wa s com ple ted on June 2, 2006. ” Becaus e the bank rup tcy cour t’s find ing doe s not aff ect our det erm inati on of wh ethe r a sp ecif ic pr ofe ss ional rela tio nshi p exis ted betw een Capc o and Ryder , we do not add res s this finding. Ho we ver, the pos t- PSA tim ing of the June 9, 2006 me eti ng doe s sup por t the conc lus ion that this wa s not an engagem ent to cond uctan inde pend ent re- evaluat ion of the Prop ert ies

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December 31, 2005 Report and the April 1, 2006 Report at one meeting, Capco cannot establish that Ryder owed a duty to Capco independently to re-evaluate the reserves of the Pro p e r t i e s with the skill and care commensurate with the requirements of t he profession to anyone but Tana, the party who originally contracted it to produce the April 1, 2006 Report. B. Capco’s claims against Tana, TRT, and Tristone Capco claims that Tana committed actionable fraud when it sent Capco a closing statement on August 28, 2006, in which Tana estimated that the revenue for August would be $6 million. Capco claims that in reliance on this fraudulent representation, Capco proceeded to close the acquisition to its detriment. Under Texas law, one of the elements of a fraud claim is reliance. Fluorine On Call, Ltd. v. Fluorogas Ltd. , 380 F.3d 849, 858 (5th Cir. 2004); Ernst & Young, L.L.P. v. Pac. Mut. Life Ins. Co. , 51 S.W.3d 573, 577 (Tex. 2 001). However, when knowledgeable parties elect to include an unambiguous waiverof-reliance provision, courts will enforce such provision. See Forest Oil Corp. v. McAlle n , 2 68 S.W.3d 51, 58 (Tex. 2008) (citing Schlumberger Tech. Corp. v. Swanson , 959 S.W.2d 171, 181 (Tex. 199 7)) . In the ins t ant case, at several points during the transactional process, Capco signed agreements waiving its reliance on representations made by Tana, TRT, and Tristone. In particular, in signing the PSA, C ap c o s p e cifically accepted Tana’s disclaimer of any represen t a t i o n regarding the accuracy of any information “now, heretofore, or hereafter furnished to [Capco] by or on behalf of [Tana].” Furthermore, C apco agreed that in deciding to enter the PSA and consummate the acqu i s i t i o n , Capco “relied solely on the basis of its own independent due diligence investigation of the Assets, upon the representations

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and w a rranties made in [the PSA], and not on any other representations or warranties of [Tana] or any other person or entity.” Even assuming that Tana’s estimate of August revenues was in fact false, the PSA provisions now prevent Capco from asserting reliance on such representation. Capco argu es that because Tana allegedly committed fraud in overestimating the August 20 0 6 revenue, the waiver-of-reliance provision is unenforceable. In support of its argument, Capco cites Lyn-Lea Travel Corp. v. Am. Airlines, Inc. , 283 F.3d 282, 289 (5th Cir. 2002) in arguing that a fraudulently i nduced party is not bound by the contract’s terms because the fraud vitiates the requisite mutual assent. Legally, Lyn-Lea is distinguishable because the pertinent issue in that case was whether a fraudulent inducement defense is preempted by the Airline Deregulation Act. Id. at 289-90. Capco’s argument also fa il s factually because the representation at issue, even if fraudulent, occurred on August 28, 2006, after the PSA had been signed on June 2, 2006. Therefore, Capco could not fraudulently have been induced to sign the PSA because the alleged fraud had not yet taken place. Capco also claims that Tana, TRT, and Tristone committed fraud when they “repeatedly invited Capco to rely upon the April 1, 2006 Ryder Scott reserve

r e p o rt” prior to the execution of the PSA. Notwithstanding Capco’s characterization of Tana’s representations as “invi t a tions to rely,” Capco 1 0

The “invit atio ns to re l y” to wh ich Capc o ref ers cons ist of thr ee e-m ail 1 0
com mun icat ions

. The fir st is an e-m ail fr om Tris tone to T a n a , dat ed Apri l 30, 3006, conf irm ing that , “ [ a] l l o ff ers sho uld be bas ed on revie w of the [p revio usl y pr ovide d] info rm atio n.” Th e s e c o n d is an inte rnal Tana e-m ail, dat ed May 25, 2006, info rm ing tra nsa cti on team me mbe rs that Capc o and Tana had dis cus s e d a varianc e betw een Tana’s act ual pr oduc tio n and the Ryder rep ort for ecas t. The e-m ail cont inues that Tana and Tris tone expla ined to Capc o that Tana wa s “ri ght on Ryder Sco t t ’ s p rod uct ion pr oject ion. ” The thir d is an e-m ail fr om Tana to Capc o, dat ed May 26, 2006, st ating that , “[t] here is no ques tio n that 16 Case: 11-20264 Document: 00511741521 Page: 16 Date Filed: 01/30/2012No. 11-20264

waived its right to rely on such representations. Where the parties have signed

a contract with a clause that expressly disclaims reli a n c e on prior representations, such clause negates a fraudulent inducement claim. See LHC Nashua P’ship, Ltd. v. PDNED Sagamore Nashua, L.L.C. , 659 F.3d 450, 4 6 0 (5th Cir. 2011) (citing and discussing Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am. , 341 S.W. 3d 323, 333-37 (Tex. 2011)). Here, not only does the PSA provide that Tana expressly disclaimed any representation of accuracy with respect to p r e vi o us information provided to Capco, but also Capco specifically represented in the PSA th a t it had relied solely on its own due diligence investigation and had not relied on any representations made by Tana, TRT, and Tristone. Because the PSA contains a clear intent to disclaim reliance, the lower courts correctly held that Capco is unable to claim fraudulent inducement based

on the prior representations of Tana, TRT, and Tristone. See Armstrong v. Am. Home Shield Corp. , 333 F.3d 566, 571 (5th Cir. 2003); Forest Oil , 268 S.W.3d at 58-61; Schlumberger Tech. Corp. , 959 S.W.2d at 179-80.

CONCLUSION For the foregoin g r e a s o ns, the judgment of the district court is AFFIRMED.

wear e s potonorahe ad of RyderS cot t’s p rod uct ion for ecas t. ” 17 Case: 11-20264 Document: 00511741521 Page: 17 Date Filed: 01/30/2012No. 11-20264

OWEN, Circuit Judge, concurring and dissenting. I concur in the panel’s majority opinion to the extent of its disposition of the issues regarding Tana, TRT, and Tristone. H o w ever, I respectfully part
company with the disposition of the p rof e s s io n al negligence claim that Capco has asserted against Ryder Scott. The majority opinion characterizes Capco’s contentions n arrowly and does not accurately capture the arguments that Capco has asserted in the district

cour t a n d in this court. The majority opinion significantly contracts Capco’s argument by repeatedly stating that Capco is contending that it retained Ryder S c ott to conduct “an independent re-evaluation” of the properties it agreed to purchase from Tana. T h a t is not the overarching claim that Capco has made. Capco’s Amended Complaint in the bankruptcy court reflects that Capco desired

assurances from Ryder Scott that t h e Ap r i l 1, 2006 Report prepared for Tana

was “accurate, complete, reliable, and compiled in accordance with acceptable industry standards applicable to petroleum engineers.” Capco could not rely on its review of that Report as part of the data that Tana furnished because Capco expressly agreed in the purchase and sale agreement that it would not and could not so rely. In order to obtain the assurances that it desired, Capco contracted directly with Ryder Scott to obtain Ryder Scott’s p rofessional judgment regarding the April 1, 2006 Report. Capco did not ask Ryder Scott to update the inform a tion contained in the April 1, 2006 Report. Capco wanted to hear directly from Ryder Scott that Ryder Scott stood be h i n d t h a t Report and that Capco could rely on it in moving forward to close the transaction with Tana. Ryder Scott provided what Capco retained it to provide. As Capco alleged in the district court and in its briefing before our court, the principal author of

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the Ryder Scott Report, Olga Basanko, attended the June 9, 2006 meeting with Capco and its potential lender. Ba s a n k o “w e n t over the April 1, 2006 reserve report in detail, and p r e s ented a great deal of data underlying that report, including geologic maps, well logs, r e p orts, and similar documents. Ms. Basanko stated that Ryde r S c o t t ’ s reserve estimates reflected in the April 1, 2006 [Report], were accurate and reliable. She further stated that Ryder Scott’s work

was thorough and complete.” That this information was provided by Ryder Scott and that th ese representations were made is undisputed. This is not “an independent re-evaluation” of the Tana properties. This is an undertaking by Ryder Scott to provide its professiona l o p i n i on to Capco that the April 1, 2006 Report was accurate as of April 1, 2006, and was pr e p a red in accordance with accepted standards. Basanko supported her opinion regarding the accuracy of the Report, as of April 1, 2006, with detailed data. This is precisely the stuff of which a contract for p r o f e s s i onal services is made. At the risk of unnecessary repetition, the only way that Capco could obtain the professional o p inion of Ryder Scott for Capco’s direct consumption was to retain Ryder Scott di r e c t l y . Capco was otherwise foreclosed by the purchase agreement with Tana from relying on Ryder Scott’s professional opinions set forth in the April 1, 2006 Report. The majority opinion’s fundamental misunderstanding of Capco’s claim is exhibited in the statement that

n o t only were Basanko’s representations within th e scope o f t he April 1, 2006 Report, but such categorizations were already available to Capco before the Jun e 9 , 2006 meeting. When comparing the April 1, 2006 Report and the June 9, 2006 presentation, there is no evidence that the presenta tion embellished the

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reserves report giving professional assurances beyond the data. 1 In signing the purchase and sale agreement on June 2, 2006, Capc o had expressly disclaimed reliance on any information that Tana provided regarding the properties that were the subject of the acquisition, incl u di n g i nformation that Ryder Scott had provided and Ryder Scott’s April 1, 2006 Report. At that point in time, Capco had no relationship with Ryder Scott regarding the Tana properties and had no recourse again Ryder Scott if the Report was inaccurate. The April 1, 2006 Report was not “available” to Capco as a professional opinion

on which it could rely as of June 2, 2006. No “assurances” were given to Ryder Scott by the April 1, 2006 Report as of the June 2, 2006 signing of the purchase and sale agreement beca u s e C a pco disavowed any such assurances as part of that agreement. The very next d ay after the June 2, 2006 agreement was signed, Capco contacted the individuals at Ryder Scott with whom it had a preexisting professional relationship to retain Ryder Scott directly to provide professional services to C a p co regarding the Tana properties. Professional services regarding the Tana properties were provided directly to Capco on June 9, 2006, seven days after Capco has signed the purchase and sale agreement. The majority opinion summarily dismisses the undisputed evidence that other direct, material representations by a Ryder Scott employee were made to Capco regarding the T a n a properties after the June 9, 2006 meeting. Shortly after the June 9 meeting, the president of Capco had lunch with Pat McInturff,

a Ryder Scott engineer with whom Capco had a pre-existing r e l a t ionship thro u gh th e r e s erve report Ryder Scott had prepared analyzing Capco’s reserve s
.

Anteat

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McInturff had been present at the June 6, 2006 meeting a n d heard Basanko’s presentation. At the lunch meeting with McInturff, Capco’s president indicated that he was “satisfied with the [Ryder Scott] prese n t a t i on regarding the Properties,” and that Capco was inclined to move forward with the acquisition. M c I n t urff “indicated” to Capco’s president “that he believed that was a sound decision.” McInturff “ m a de several positive comments

. . . regarding the Properties, including st at e m e nt s th at h e b eli eved they were ‘good properties’ and that they would be a ‘good fit’ for Capco.” This Ryder Scott employee “also stated that Ryder Scott’s estimate of the Properties’ proved reserves was conservative and that the Properties had significant ‘upside potential.’” The majority opinion
sweeps this evidence aside by describing it as “sta t e m e nts uttered after the meeting by a Ryder employee positionin g h i m self for a potential employment

o p p o rtu nity with C apco.” Regardless of McInturff’s p o s s ib l e p er s o n al m otiv atio n , he was an employee and agent of Ryder Scott when these statements were made. His statements are some evidence of professio n a l o pinions rendered by Ryder Scott within the scope of its engagement by Capco. Capco’s a r gu m e n t is and has consistently been that before it was even

aware of the Tana propert i e s , it had a professional relationship with Ryder Scott. Capco retained Ryder Scott to prepare a report of Capco’s reserves as of December 31, 2005. Capco felt “comfortable” with asking Ryder Scott directly for its professi o n a l o p inion regarding the April 1, 2006 Report pertaining to Tana’s reserves because of this pre-existing relationship. Capco alleges that if Ryder Scott had not vouched for t h e accuracy and reliabilit y o f the April 1, 2006 Report, Capco would not have closed the acquisition from Tana. Capco asserts that it had the option of withdrawing from

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the transaction after it signed the purchase and sale agreement with Tana and before the August 31, 2006 closing, w i t h forfeiture of its 10% deposit as its maximum possible loss. It a l l e g es that its losses from proceeding to close the transaction were far greater. Af t e r t he Tana acquisition closed, Capco again retained Ryder Scott in 2007 to prepare a reserve report as of December 31, 2006. Capco alleges that it

was this subsequent report that “ s howed less that [sic] $12 million in PDP

reserves [for the properties acquired from Tana], a shocking decline of $35-$40 million, net of interim production.” Capco asserts that when it received this report, it di s c o v e red that representations made by Tana and Ryder Scott regarding “the Properties’ hydrocarbon reserves had been false and grossly overstated.” The principal, though not exclusive, focus of the professional n e gl i g ence claim is that the April 1, 2006 Report was “riddled with negligence.” Capco did not retain Ryder Scott to prepare that report or even to re-evaluate that Report. Capco retained Ryder Scott to vouch for the April 1, 2006 Report and to provide its professi o n a l opinion that the report had been prepared without negligence and in accordance with accepted principles. Ryder Scott billed Cap c o f o r that opinion, and Capco paid for it. The majority opinion erects a straw man by again erroneously stating that Capc o c ontends it contracted for an independent re-evaluation of the Tana

reserves. The majority opinion then dismantles the straw man in arguing that it is “incongruous” that Ryder Scott would agree “to provide an independent reanalysis of the Properties for $2032.50" when Capco paid Ryder Scott between

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$25,000 and $35,000 for the report on Capco’s reserves as of December 31, 2005. 2 Capco does not contend that it paid Ryder Scott to prepare another, new reserve report regarding the Tana properties. Capco wanted Ryder Scott’s professional opinion and judgment regarding the reliability of the work that it had performed for Tana, which was contained i n t h e e xisting April 1, 2006 Report for which Ryder Scott would have no accountability to Capco absen t an agreement to provide professional opinions and j u d g m ents regarding that Report to Capco directly. The only basis on which Ryder Scott sought summary judgment with

res pect to the professional negligence claim was lack of privity between Capco and Ryder Scott. No one disputes that a contract wi th C a p c o e xisted. Ryder Scott simply disput e s t h e scope of that contract. With great respect to the majority, I cannot fathom how one can conclude that there was no contract for professional services regarding the April 1, 2006 Report and its reliability. For that reason, I must dissent.

Anteat

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