Opinion ID: 2717726
Heading Depth: 4
Heading Rank: 1

Heading: Foreseeability as Requisite for Force

Text: Majeure to Excuse Non-Performance T-Mobile also argues that VICI failed to prove that the condition preventing performance—the damage to the racecar—could not have been foreseen at the time the parties entered the Agreement. It contends that there was no evidence in the record suggesting that the automobile crash and the subsequent damage caused by it could not have been foreseen and thus that the force majeure provision does not apply. VICI responds that neither the type of damage to the car, the type of repairs needed as a result of that damage, nor the lack of parts available to do those repairs, could have been foreseen. As a preliminary point, we note that the force majeure provision in the Agreement imposes three conditions—that “(1) the prevented obligation is a nonmonetary obligation that is prevented by a condition beyond a party’s control; (2) the 24 affected party provides prompt notice of the interference, its nature, and expected duration; and (3) performance of the prevented obligation resumes as soon as the interference is removed”—none of which mention foreseeability. VICI Racing, 921 F. Supp. 2d at 333. Nevertheless, some courts have inferred such a condition even where the contract makes no mention of it. However, because T-Mobile did not raise the foreseeability issue below, see, e.g., J.A. 78, it may not secure appellate relief on this issue. In re Diet Drugs (Phentermine/Fenfluramine/Dexfenfluramine) Prod. Liab. Litig., 706 F.3d 217, 226 (3d Cir. 2013). “It is axiomatic that arguments asserted for the first time on appeal are deemed to be waived and consequently are not susceptible to review in this court absent exceptional circumstances.” Tri-M Grp., L.L.C. v. Sharp, 638 F.3d 406, 416 (3d Cir. 2011) (internal quotation marks omitted). This waiver rule serves several important judicial interests, such as “protecting litigants from unfair surprise; promoting the finality of judgments and conserving judicial resources; and preventing district courts from being reversed on grounds that were never urged or argued before them.” Id. (alternation and internal quotation marks omitted). Because T-Mobile did not present the foreseeability argument to the District Court, we deem it waived. Even if T-Mobile had not waived the foreseeability argument, we would be required to predict how the Delaware Supreme Court would rule on this question, since that Court has yet to address the issue. The only Delaware court to address the topic is the Court of Chancery in Stroud. There, the Chancery Court interpreted a contract for the acquisition of two townhouses in the process of being built. The contract included a force majeure clause that enumerated several types of events that would fall within the provision’s scope, but also 25 included a catch-all phrase: “or any other reason whatsoever beyond the control of” the party. Stroud, 2004 WL 1087373, at . The real estate developer argued that the force majeure clause excused its performance due to a series of delays caused by the inspection and rejection of the water detention pond and delays in obtaining the final County approval. Id. at -7. The Chancery Court rejected these arguments, noting that such delays were “almost inevitable in the real estate development setting” and that “every event that, in some sense, ‘delays’ progress is not the meat of a force majeure clause.” Id. at , . In light of those considerations, the Court reasoned that, [u]ltimately, the most likely expectation of the parties to the Agreement [was] that the force majeure clause encompasses two concepts: first, that the delay-causing event was beyond the reasonable control of [the development company] and, second, that the event was not reasonably foreseeable in the ordinary course of real estate development. Id. at . At no point did the Court in Stroud suggest that all force majeure clauses must be read to incorporate the concept of foreseeability. Rather, the Chancery Court engaged in standard contractual analysis to determine the intent of the contracting parties, and found that, given the nature of the real estate industry, the parties expected the clause to include such a concept. Other courts have found that contractual force majeure provisions that do not discuss whether the excusing event must be unforeseeable should be construed to require unforseeability. Indeed, in Gulf Oil Corp., 706 F.2d at 453, 26 this Court considered a force majeure provision in a gas warrant contract and observed that: “To support a definition of force majeure in a warranty contract, we must stress the element of uncertainty or lack of anticipation which surrounds the event’s occurrence and must affect the availability and delivery of gas.” Id. In reaching the result, we expressly rejected petitioner’s argument “that the contract terms are to protect the parties from both foreseeable and unforeseeable events.” Id. Again, the opinion made much of the specific circumstances of the gas industry, even stating that “[o]ur decision is based on the contract’s daily warranty.” Id. at 453. There is some rationale to suggest that a racecar crash during a competitive car race, as the mechanical breakdowns and maintenance repairs at issue in Gulf, should not constitute a force majeure because “their frequent, almost predictable, occurrence takes them outside of a force majeure excuse to non-performance.” Id. at 454. Nevertheless, because the Agreement does not expressly incorporate a non- foreseeability condition into its terms and because T-Mobile did not raise the issue at the trial level, we decline to reach the issue here. It would be ill-advised to wade into the uncharted waters of Delaware state law without a fully developed record on the issue at the trial level.10 For example, there are facts in 10 The Court notes that certain arguments by VICI suggest that the parties were aware of the possibility of a racecar accident and the consequences that would result. In VICI’s opening statement, counsel stated that Ron Meixner explained to T-Mobile representatives that “if we have one car and the car has a problem, we can be out of racing for a while.” J.A. 142. Counsel additionally argued that, after the accident, Mr. Meixner then told T-Mobile: “I told you this would be a problem.” J.A. 145. 27 the record to suggest that T-Mobile did not notify VICI that it considered the failure to race to constitute a breach and did not terminate the contract upon VICI’s failure to breach, which might suggest either that T-Mobile deemed the nonperformance to be either non-material or excused by the force majeure provision. Moreover, the application of the waiver doctrine here serves to protect at least the three judicial interests noted above: “protecting [VICI] from unfair surprise; promoting the finality of judgments and conserving judicial resources; and preventing district courts from being reversed on grounds that were never urged or argued before them.” Tri-M Group, LLC, 638 F.3d at 416 (alternation and internal quotation marks omitted). Because a factual record on this line of argument was not developed, and in view of the judicial interests that the waiver doctrine is designed to protect, the most prudent course of action is to deem the foreseeability issue waived. Therefore, we affirm the District Court’s findings on this issue. The consequences of this holding are discussed below in the context of VICI’s cross-appeal.