Pursuant to 5 T H C IR . R. 47.5, the court has determin ed that thi s opinio n should not * be publishe d an d is not precede nt except und er the limit ed circu mstance s set forth in 5 T H C IR . R. 47.5 .4. 

### INTHE UNI TED S TATESCOU RT OFAPPEALS

FORTHE FIFTH CIRCU IT

N o. 08- 20585

T- M VA CU U M PRO D U CT S P l ai n t i f f - A pp el l ee v. TA I S C, I NC D efen d a n t - A p p ell a n t

A pp ealf

rom t h e U n i t ed S t ates D i st ri ctC ou rt f ort he Sout her n D i st r i c tof Texas U SD C N o. 4: 07- C V

- 04108

B efore J O N E S , C h i ef Ju d ge , an d H IG G IN B O T H A M an d H AY N E S , C ir c u it Ju dg es . P E R C U R I A M: * TA I SC, a f

i nanc i ng c o m pa ny, a ppe al s t he t r i al c o ur t ’ s s um m ar y j udg m e nt i n fa v o ro f

T

- M Va c u u m Pr o d u c t s , I n c . , a f u r n a c e man u fa c t u r e r . W e AF FI RM

. Thi s c as e a r i s e s f

r o m a t hr e e - pa r t y t r ans ac t i on to fi n anc e t he s al e a nd l eas e o f t w o c om m er c i alf

urnac es . T- M agr ee d t o de l i vert w o f urnac es t o U l ba M eta l l u rg i ca lP l a n t Join t Sto ck C om p a n y (n ot a p a rty to t h i s ca se) by a d a te
c e r t ai n. TAI SC f

unc t i o ne d as t he f

i nanc i ng ar m by w ayo f a l e as e t r ans ac t i o n. United States Court of App eals

Fifth Circuit 

### F I L E D Jul y 1, 2009 Cha rl es R. F ulb ru g e II I ClerkN o. 08- 20585

Whilethis arran ge ment was n om in al lys t ructured as asal e and lea se of go ods, th e 1 di s tric t c o urt a n aly z e d it a s a f i n a nc i n g tr a n s ac ti o n , a n d th at i s i n d e e d th e e s s enceof the

2 T- M fai l ed t o de l i vert he f urnac es on t i m e. H ow ever, U l ba c ont i nued t o pay TA I SC and ul t i m at el y e nt er ed i nt o a n agr ee m ent w i t h T- M , t o w hi c h T A I SC w as
n ot a p a rty, to ex ten d th e t i m e f or t h e f u rn a ce de l i ve ry . T h a t n ew d a te w a s m et. W h e n T A IS C re fu se d to p a yth e r e m a in in ga m o u n ts d u e for th e fu rn a ce s to T -M , T

- M f i l ed thi s l aw sui t
. Th e di st ri ct court gran t ed su m m ary j u dg m en tt o T

- M f or t h e re m a in in gb a la n c e o n th e p u r c h a s e p r ic e o f t h e fu r n a c e s a n d r e fu s e d T A I S C ’s
c l ai m for return of

t he paym ent s i thad al r eady m ade (t er m ed “ c ondi t i onal pa ym en t s” i n t h e con tra ct) a n d i n t ereston those pay m en t s. TA ISC t h en f i l ed th is a p p e a l. W e re v ie w g r a n ts o f s u m m a r yju d g m e n ts d e n o v o . Mi n t e rv . G r e a tA m. I ns . Co

. of

N. Y. , 4 2 3 F .3 d 4 6 0 , 4 6 4 (5 th C ir . 2 0 0 5 )

. S u m m a r yju d g m e n t is ap propri ate i f, af

t er m ak i n g al li n ferences i n favor of t h e non - m ovan t , t h e rec ord contai n s no gen u i n e i ssue of m ater i alfact , an d the m o v a n t is enti t l ed to a ju d g m e n t a s a m a tt e ro f la w . F ED
. R. C IV
. P. 5 6 (b ); Mi n t er , 423 F. 3d at464- 65. T A IS C ’ s a rg u m e n ts o n a p p e a l ca n b e su m m e d u p a s fo ll o w s: (1) T -M d efau l ted by i ts l a te d elive ryof th e fur n a ces an d , th ere fore, forfeit ed i ts ri gh t t o pa ym en tof

t h e pu rchase pri ce bal an ce; an d ( 2) T A ISC i s enti t l ed to i n t ereston t he condi t i onalpaym ent s i tm ade t o T- M f ort he t i m e pe r i od be t w ee n t he o r i gi nal del i ver y dat e a nd t he ac t ualdel i ver y dat e. Bot h part i es a gr ee t hat Texas l aw a p p lie s to o u ra n a ly s is

. Iti s un n ecess ary t o deci de w h et he rT

- M ’ s or i gi n all ate del i very consti t u t es an eve nt of

defaul tunder t he par t i es ’c ont r ac t , be c ause w e c onc l ude t hat T A ISC ’ s c on t i n u ed acceptan ce of perf orm an ce u n der t h e f i n an ci n g contract p r e v e n t e d T AI S C f r o m u s i n gt h e d e fa u l ta s a n e x c u s e f o ri t s o wn
n o n p e r fo r m a n c e . S e e G u p ta v . E . I

d a h o Tu m o rIn s t., In c ., 140 S. W

. 3d 747, 756 ( T ex. A p p . -- H o u ston [ 14th D i st
. ] 200 4, pet. den i ed). A s t h e di st ri ctcourt 1N o. 08- 20585

a gre em ent b etwe enTAI SC , T -M , a n d Ulb a . Thu s, liketh e partie s an d th e di strictc ourt , we analyze it as such. 3 corr ect l y exp l ai n ed, T

- M ’ s del ay d i d n otexcuse T A IS C ’ s p erf orm an ce because TA I SC c ont i nued t o payT- M and ac c eptl eas e pay m ent s f r om U l ba. Texas l aw i s c l eart hat , “ [ i ] f

t he non- br eac hi ng par t y e l ec t s t o t r eatt he c ont r ac tas c o nt i nui ng andi ns i s t s t he par t y i n de faul tc o nt i nue pe r f o r m anc e , t he pr e vi o us b r e a c h co n s tit u te s n o e x c u s e fo rn o n p e r fo r m a n c e o n th e p a r t o f th e p a r ty n o t in d efau l t an d the con tract con ti n u es in force f or th e b en efi t of

bo th pa rti es.” I

d. D e s p ite its d e m a n d le tt e r , T A IS C ’ s a c tio n s d id n o t tr e a t T -M a s b e in gin defaul taf

t er t h e ori gi n alfailu re to t i m el y del i ver. T-M ’ s del ay i n del i very p r o v id e d T A IS C o r U lb a w ith th e o p p o r tu n ity to c a n c e l th e c o n tr a c t s b y t h e ir
ow n t erm s. B ot h decl i n ed to do so, i n st ead t reat i n g T

- M ’ s obl i gati on s t o del i ver t h e f u rna ces as conti n u in g . T A ISC conti n u ed to m ak e pay m en t s t o T

- M f or ne ar l y f o ur m o nt hs af

t e r no t i f yi ng T- M o f i t s “ de faul t s , ” T- M m anufac t ur e d a nd d elive red the f

u rn a ces, U l b a acce p ted th em , a n d U lb a m a d e th e lease pa ym en ts t o T A ISC

. A f

t er el ect i n g t o conti n u e contr actperf orm an ce, T A ISC cann otnow rel y on T

- M ’ s i n i t i aldel ay as an excuse f or t h e fai l u re t o m ak e f u l lpay m en t
. For t he s am e r e as o n, w e a l s o a gr e e w i t h the di s t r i c tc o ur t ’ s de c i s i o n r e ga r di ng in te r e s t o n th e c o n d itio n a l p a y m e n ts
. T A IS C a ls o h a s fa ile d to e s ta b lis h th a t it
w a s d a m a g e d b ya n yd e la y . A c c o r d in g ly , th e d is tr ic t c o u r t’s ju d g m e n t is A F F IR M E D

.