Opinion ID: 10012
Heading Depth: 2
Heading Rank: 3

Heading: Quest's breach of contract claim

Text: 50 Apprill argues the district court, upon remand, erred by entering judgment for Quest on its breach of contract claim without addressing his affirmative defenses under Rule 10b-5 and the TSA. In the first appeal, however, a panel of this court affirmed Quest's breach of contract claim, stating: On the facts of this case, Apprill ratified the Stock Purchase Agreement as a matter of law and was barred from asserting his mistake and fraud defenses to the contract. Quest Medical, Inc. v. Apprill, No. 92-1067, slip op. at 8, 998 F.2d 1014 (5th Cir. July 16, 1993). In a footnote, the panel further concluded that Apprill voluntarily withdrew his TSA affirmative defense at the first trial and that any claim to the contrary was not preserved for appeal. Id., slip op. at 9 n. 4. 51 The law of the case doctrine precludes reexamination of issues decided on appeal, either by the district court on remand or by the appellate court itself upon a subsequent appeal. Conway v. Chemical Leaman Tank Lines, Inc., 644 F.2d 1059, 1061 (5th Cir.1981). This rule applies whether the issue was decided expressly or necessarily by implication. Id. The law of the case doctrine, however, is not inviolable; an appellate court decision is to be followed in all subsequent proceedings in the same case unless evidence in the subsequent trial is substantially different, the prior decision was clearly erroneous and would work manifest injustice, or controlling authority has in the interim made a contrary rule of law applicable. Illinois Cent. Gulf R.R. Co. v. International Paper Co., 889 F.2d 536, 539 (5th Cir.1989). 52 The earlier panel of this court sustained Quest's breach of contract claim and rejected Apprill's affirmative defenses. It remanded only the question of the amount of damages for the breach. The district court granted summary judgment on the damages issue, rejecting Apprill's asserted defenses under the law of the case doctrine. The district court properly invoked the doctrine.
53 The district court awarded Quest prejudgment interest on its breach of contract damages at a rate of 10% per annum, compounded daily. Apprill argues the appropriate rate is 6% simple interest. 54 State law governs the award of prejudgment interest. FSLIC v. Texas Real Estate Counselors, Inc., 955 F.2d 261, 270 (5th Cir.1992). Under Texas law, prejudgment interest may be awarded under either contractual or equitable theories. Perry Roofing Co. v. Olcott, 744 S.W.2d 929, 930 (Tex.1988). Judgments based on contracts earn interest at the rate specified in the contract. Tex.Rev.Civ.Stat.Ann. art. 5069-1.05 § 1(1) (West Supp.1996). If the contract specifies no rate of interest, interest at the rate of six percent per annum shall be allowed on all ... contracts ascertaining the sum payable. Tex.Rev.Civ.Stat.Ann. art. 5069-1.03 (West 1987). If the sum payable is not ascertainable from the contract, prejudgment interest may be appropriate in equity, the rate being that specified in Tex.Rev.Civ.Stat.Ann. art. 5069-1.05 (West Supp.1996). 22 Perry Roofing Co., 744 S.W.2d at 930. See also Axelson, Inc. v. McEvoy-Willis, 7 F.3d 1230, 1234 (5th Cir.1993). 55 Apprill admits the Agreement did not specify any rate of interest, but argues the sum payable for breach of the contract was reasonably ascertainable from the contract in light of the circumstances, such that Article 5069-1.03's 6% rate applies. Quest contends the agreement is silent on the measure of damages, thus a 10% rate is proper. Whether the Agreement is a contract ascertaining the sum payable within the meaning of Article 5069-1.03 is controlling. 56 The requirement that the contract set out a sum payable is liberally construed. La Sara Grain Co. v. First Nat'l Bank of Mercedes, 673 S.W.2d 558, 567 (Tex.1984). In fact, [i]t is sufficient ... if the contract provides the conditions upon which liability depends and fixes a measure by which the sum payable can be ascertained with reasonable certainty, in the light of the attending circumstances. Id. (quoting Federal Life Ins. Co. v. Kriton, 112 Tex. 532, 249 S.W. 193, 195 (1923)). However, [i]f the contract does not 'unambiguously [ ] establish the amount owed,' article 5069-1.05 applies. Axelson, Inc., 7 F.3d at 1234. Review of the method by which the district court arrived at the breach of contract damages amount reveals that the measure of damages was not discernable from the face of the Agreement. 23 Thus, the district court correctly awarded Quest prejudgment interest at 10% per annum, compounded daily. Lafarge Corp. v. Hartford Casualty Ins. Co., 61 F.3d 389, 401-02 (5th Cir.1995); Axelson, Inc., 7 F.3d at 1234.