Court Opinion

ID: 2670623
Source: CourtListenerOpinion
Date Created: 2014-04-21 18:15:21.612866+00
Date Added: 2024-06-11T09:19:12.960404
License: Public Domain

Case: 13-30680      Document: 00512601409         Page: 1    Date Filed: 04/18/2014

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                             United States Court of Appeals
                                                                                      Fifth Circuit

                                                                                    FILED
                                      No. 13-30680                              April 18, 2014
                                                                               Lyle W. Cayce
AMERIMEX RECYCLING, L.L.C.,                                                         Clerk

                                                 Plaintiff–Appellee
v.

PPG INDUSTRIES, INCORPORATED,

                                                 Defendant–Appellant

                   Appeal from the United States District Court
                      for the Western District of Louisiana
                             USDC No. 2:07-CV-2090

Before REAVLEY, PRADO, and OWEN, Circuit Judges.
PER CURIAM:*
       Plaintiff–Appellee Amerimex Recycling, L.L.C. (“Amerimex”) brought
the underlying action against Defendant–Appellant PPG Industries, Inc.
(“PPG”) seeking monetary damages for an alleged wrongful termination of a
contract between the two parties. Following a bench trial, the district court
found that PPG breached its contract with Amerimex and awarded
$319,255.00 in damages to Amerimex, together with judicial interest and costs.
We affirm.

       * 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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.
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                     I.      FACTS AND PROCEEDINGS
      PPG operates a metal scrap yard and sells surplus scrap metal as part
of its disposal process. Amerimex is a scrap metal recycler and purchases
discarded metals at a reduced rate.
      On August 19, 2005, PPG and Amerimex entered into a written three-
year contract for the purchase of scrap metal (the “Contract”). The Contract is
comprised of (1) a standard “Purchase Order” form (the “Purchase Order”), the
back of which contains certain “Purchase Order General Conditions” (the
“Purchase Order Conditions”), and (2) a set of “Surplus/Used Equipment
Materials Sale - General Conditions” (the “Surplus Conditions”). The Contract
authorized Amerimex to purchase “No. 2 Heavy Melt Scrap Steel and Scrap
Crushed Drums” at a defined price from PPG. Such steel is sometimes referred
to as “scrap steel” or “ferrous” metal, as distinguished from more valuable
“nonferrous” metals such as nickel, aluminum, brass, stainless steel, and
copper. The Contract also required Amerimex “to clean the scrap yard to bare
ground during [certain] months.”
      Among other provisions, the Purchase Order Conditions provide for
indemnification and cancellation.       Specifically, clause eleven provides for
indemnification and states: “Seller agrees to indemnify, defend and hold
harmless Buyer . . . from and against . . . any and all suits, causes of action and
proceedings thereon arising or allegedly arising from or related to the subject
matter of this Purchase Order.” Clause fourteen provides for cancellation and
states: “Buyer reserves the right to cancel this Purchase Order, or any part
thereof, at any time, without cause, by written notice to Seller.”         On the
Purchase Order, PPG signed the “Purchasing Agent” signature line and
Amerimex signed the “Seller’s Signature” line. The parties dispute, however,
which party constitutes the “Buyer” and which the “Seller” as used in the
Purchase Order.
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      Similarly, the Surplus Conditions provide for a limitation on liability,
indemnification, and cancellation. Clause one limits liability: “[The] limit of
Seller’s liability for any claim arising out of this transaction whether in
contract, tort or strict liability shall be the invoice price of the particular
shipment out of which the claim arises and in no event shall seller be liable for
any special, indirect or consequential damages.” Clause three provides for
indemnification and states that “Buyer agrees to indemnify and save Seller” in
certain situations. Finally, clause seven provides for cancellation and states:
“Buyer’s failure to satisfactorily comply with all the conditions of this
Agreement shall entitle the Seller to cancel this Agreement without obligation
by written notice to the Buyer.” There is no dispute that, in the Surplus
Conditions, “Seller” refers to PPG and “Buyer” refers to Amerimex.
      The incident that precipitated PPG’s termination of the Contract
occurred on October 31, 2006. According to PPG, its employees witnessed
Amerimex employees load nonferrous metals onto an Amerimex trailer. The
PPG employees notified their supervisor, Greg Trahan (“Trahan”), who
subsequently called PPG’s contract security service. PPG’s security advisor
did not permit Amerimex to leave the facility and contacted the local sheriff’s
office, who then questioned the Amerimex employees. After this incident, PPG
terminated its contract with Amerimex.
      On October 29, 2007, Amerimex filed suit against PPG and Trahan in
Louisiana state court alleging that PPG wrongfully terminated the Contract,
falsely imprisoned its employees, and defamed Amerimex. Amerimex and
Trahan are Louisiana citizens, whereas PPG is a foreign corporation.
Pursuant to 28 U.S.C. §§ 1441 and 1446, PPG and Trahan removed the case to
federal court on the basis of Trahan’s improper joinder and complete diversity
of citizenship.   PPG then filed its answer denying liability and asserting

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counterclaims for past-due accounts receivable and enforcement of Amerimex’s
indemnity obligations to PPG under the Contract.
      All parties consented to proceed before a United States magistrate judge.
After receiving no objection from Amerimex, the district court dismissed with
prejudice all claims against Trahan due to Amerimex’s failure to state a cause
of action against him. The court then granted PPG’s motion for summary
judgment as to Amerimex’s false imprisonment and defamation claims, but
denied the motion as to Amerimex’s wrongful termination of contract claim
and PPG’s counterclaim for indemnification. The judgment did not address
PPG’s counterclaim for unpaid accounts receivable.       Amerimex and PPG
consented to have the matter tried without a jury, and trial commenced
September 19, 2011.
      Following the bench trial, the court entered the following findings of
facts and conclusions of law on May 17, 2013. The magistrate judge found that
the contract period ran from August 22, 2005 through July 31, 2008, and that
former PPG employee Jerry Boyles (“Boyles”) and Amerimex co-owner Juan
Cadena (“Cadena”) signed the Contract. Additionally, Boyles testified that
PPG drafted the contract in whole.        According to the magistrate judge,
however, “[t]rial testimony indicated that there were many details, customs,
and practices between the parties that were omitted from the written
agreement.” The contract did not specify, for example, the location or process
by which Amerimex would acquire the scrap steel.
      In light of the omissions, the district court relied upon evidence of
industry custom. Customarily, PPG would prepare a scrap metal pile in its
yard for its scrap metal buyer. As scrap metal was once a part of something
else, it would sometimes still be attached to other metals. Consequently, a
scrap metal pile might include any combination of: (1) scrap metals that were
essentially garbage, (2) scrap steel as identified in the Contract, and (3)
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nonferrous metals with a higher value than the scrap steel. Potential scrap
metal buyers typically viewed a scrap metal pile and bid on the contract to haul
the pile out. Whereas previous scrap buyers would haul out the entire scrap
metal pile and separate it later, Amerimex would customarily first separate a
scrap metal pile into smaller piles of like kind, and remove a pile from PPG’s
yard when a sufficient amount accumulated. The court found that PPG had
never objected to this process during the fourteen months Amerimex performed
under the Contract.
      On September 29, 2006, Trahan became the scrap yard supervisor and,
as the district court noted, “[i]t was exceedingly clear . . . from testimony at
trial that there existed considerable friction between Trahan and Cadena.” In
their first meeting, for example, Trahan admitted that he called Cadena a
“smart ass” and testified that after the confrontation, he “didn’t need
Amerimex in the plant.” Trahan further testified that he felt “uncomfortable”
dealing with Cadena and, for this reason, he no longer communicated directly
with Cadena.
      Regarding the October 31, 2006 incident, the court found that Amerimex
entered the PPG scrap yard and loaded one of its vehicles with metal from the
scrap pile, including nonferrous metals. The court further found that, “[r]ather
than approach the Amerimex employees and question them about their
activities or indicate that they may have been doing something inappropriate,”
the PPG employees, including Trahan, informed their security supervisor that
Amerimex was attempting to steal high-value metals.             PPG’s security
personnel consequently stopped Amerimex’s vehicle at the gate and contacted
the local sheriff’s office.   The Amerimex employees were released after
questioning, but the metal that Amerimex had loaded was not allowed to leave
PPG’s premises.

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      After PPG terminated its contract with Amerimex, PPG awarded the
contract to another scrap buyer, Southern Scrap. Between January 2007 and
July 31, 2008, Southern Scrap removed 8,168,360 pounds of metal from PPG’s
scrap yard, for which it paid PPG $549,679.65.
    Turning to the Contract, the court interpreted it to require cause for
termination and found that PPG did not have such cause. As to damages, the
court projected Amerimex’s net lost profits at $332,843.89, but found that
Amerimex never paid PPG for the loads it removed during October 2006, which
amounted to $13,588.89. The court further found that a liability-limitation
clause did not limit Amerimex’s damages, and that neither indemnification
provision applied.
    Accordingly, the court found that PPG breached its contract with
Amerimex, and that, as a result, Amerimex sustained damages in the amount
of $332,843.89. This amount was reduced by the $13,588.89 Amerimex owed
to PPG for unpaid scrap. On June 14, 2013, the district court entered judgment
finding PPG liable to Amerimex in the amount of $319,255.00 together with
judicial interest and costs. PPG timely appealed.
          II.   JURISDICTION AND STANDARD OF REVIEW
      The district court had subject matter jurisdiction pursuant to 28 U.S.C.
§ 1332. Because PPG seeks review of a final judgment of the district court, this
Court has jurisdiction pursuant to 28 U.S.C. § 1291.
      In an appeal from a final judgment following a bench trial, we review the
district court’s findings of fact for clear error, and conclusions of law and mixed
questions of law and fact de novo. French v. Allstate Indem. Co., 637 F.3d 571,
577 (5th Cir. 2011) (citing Dickerson v. Lexington Ins. Co., 556 F.3d 290, 294
(5th Cir. 2009)). “‘A finding is clearly erroneous if it is without substantial
evidence to support it, the court misinterpreted the effect of the evidence, or
this court is convinced that the findings are against the preponderance of
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credible testimony.’” French, 637 F.3d at 577 (quoting Becker v. Tidewater,
Inc., 586 F.3d 358, 365 (5th Cir. 2009)). “[T]he reviewing court must give due
regard to the trial court’s opportunity to judge the witnesses’ credibility,” Fed.
R. Civ. P. 52(a)(6), and should reverse “under the clearly erroneous standard
‘only if [it has] a definite and firm conviction that a mistake has been
committed,’” French, 637 F.3d at 577 (quoting Canal Barge Co. v. Torco Oil Co.,
220 F.3d 370, 375 (5th Cir. 2000)).
        The district court’s interpretation of contracts is reviewed de novo,
applying the same standards that guided the district court. Musser Davis
Land Co. v. Union Pac. Res., 201 F.3d 561, 563 (5th Cir. 2000) (citing Exxon
Corp. v. Crosby–Miss. Res., Ltd., 154 F.3d 202, 205 (5th Cir. 1998)). But if the
district court relied upon extrinsic evidence to interpret an ambiguous
contract, then its factual findings concerning the parties’ intent are reviewed
for clear error. Preston Law Firm, L.L.C. v. Mariner Health Care Mgmt. Co.,
622 F.3d 384, 392 (5th Cir. 2010). However, “[t]he determination of whether a
contract is clear or ambiguous is a question of law.” Petrohawk Props., L.P. v.
Chesapeake La., L.P., 689 F.3d 380, 393 (5th Cir. 2012) (quoting Sims v.
Mulhearn Funeral Home, Inc., 2007-0054, p.9 (La. 5/22/07); 956 So. 2d 583,
590).
                             III.     DISCUSSION
        PPG presents numerous issues on review, many without legal or factual
support.    We first provide the applicable rules of construction.        Then we
address issues raised relating to the district court’s finding that PPG breached
the Contract; next, those relating to damages; and finally, those relating to
indemnification.
A. Rules of Construction
        State law rules of construction govern in diversity cases. Amica Mut.
Ins. Co. v. Moak, 55 F.3d 1093, 1095 (5th Cir. 1995). Because this action was
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filed in the U.S. District Court for the Western District of Louisiana, this Court
is bound to apply the substantive law of the forum state of Louisiana. See Am.
Elec. Power Co., 556 F.3d at 285–86 n.2.
      Under Louisiana law, the “[i]nterpretation of a contract is the
determination of the common intent of the parties.” La. Civ. Code Ann. art.
2045. If the terms of a contract are unambiguous—i.e., “clear and explicit and
lead to no absurd consequences”—then “no further interpretation may be made
in search of the parties’ intent.” La. Civ. Code Ann. art. 2046. Conversely, “[a]
contract is considered ambiguous on the issue of intent when it lacks a
provision bearing on the issue, its written terms are susceptible to more than
one interpretation, there is uncertainty as to its provisions, or the parties’
intent cannot be ascertained from the language used.” Petrohawk Props., L.P.,
689 F.3d at 393 (citation and internal quotation marks omitted). In that event,
the court may consider extrinsic evidence to determine the parties’ intent. Id.
      The Louisiana Supreme Court has summarized Louisiana’s general
principles of contract interpretation as follows:
      Contracts have the effect of law for the parties and the
      [i]nterpretation of a contract is the determination of the common
      intent of the parties. The reasonable intention of the parties to a
      contract is to be sought by examining the words of the contract
      itself, and not assumed. When the words of a contract are clear
      and explicit and lead to no absurd consequences, no further
      interpretation may be made in search of the parties’ intent.
      Common intent is determined, therefore, in accordance with the
      general, ordinary, plain and popular meaning of the words used in
      the contract. Accordingly, when a clause in a contract is clear and
      unambiguous, the letter of that clause should not be disregarded
      under the pretext of pursuing its spirit, as it is not the duty of the
      courts to bend the meaning of the words of a contract into harmony
      with a supposed reasonable intention of the parties. However,
      even when the language of the contract is clear, courts should
      refrain from construing the contract in such a manner as to lead to
      absurd consequences. Most importantly, a contract must be

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     interpreted in a common-sense fashion, according to the words of
     the contract their common and usual significance. Moreover, a
     contract provision that is susceptible to different meanings must
     be interpreted with a meaning that renders the provision effective,
     and not with one that renders it ineffective. Each provision in a
     contract must be interpreted in light of the other provisions so that
     each is given the meaning suggested by the contract as a whole.
            ....
            . . . [W]hen the printed contract provisions irreconcilably
     conflict with the provisions added by the parties, the added
     provisions will control.
Clovelly Oil Co., LLC v. Midstates Petroleum Co., LLC, 2012-2055, pp. 5–6, 7
(La. 3/19/13); 112 So. 3d 187, 192, 193 (footnotes, citations and internal
quotation marks omitted). Additionally, “[i]n case of doubt that cannot be
otherwise resolved, a provision in a contract must be interpreted against the
party who furnished its text. A contract executed in a standard form of one
party must be interpreted, in case of doubt, in favor of the other party.” La.
Civ. Code Ann. art. 2056.
B. Breach of Contract
      PPG contends that it did not breach the contract because it could
terminate the Contract without cause and that, were caused required, it
nevertheless had cause. Amerimex responds that cause was required and that
the district court did not clearly err in finding that PPG did not show cause.
We hold that the Contract required PPG to establish cause to terminate, and
that PPG did not do so.
  1. The Contract Required Cause to Terminate
     We review de novo the district court’s finding that the Contract could not
be terminated without cause. See Musser Davis Land Co., 201 F.3d at 563.

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PPG argues that clause fourteen 1 of the Purchase Order Conditions entitled it
to terminate the Contract without cause and upon written notice. Clause
fourteen of the Purchase Order Conditions, entitled “Cancellation,” provides
that the “Buyer reserves the right to cancel this Purchase Order, or any part
thereof, at any time, without cause, by written notice to Seller.” PPG contends
that, as used in the Purchase Order, “Buyer” refers to PPG and “Seller” refers
to Amerimex. Amerimex responds that it is the “Buyer” and that PPG is the
“Seller” in both the Purchase Order Conditions and the Surplus Conditions.
      On review, the language of the Contract reflects that the parties
intended Amerimex to be the “Buyer” referred to in both the Purchase Order
and the Surplus Conditions. The Purchase Order states that it was “issued to
cover the sale . . . by PPG to Amerimex”; denotes “[t]he price to be paid to PPG”;
and provides that “PPG shall bill the vendor monthly.” Such language plainly
encompasses a sale from PPG to Amerimex, with the price to be paid to PPG
from Amerimex and as billed by PPG to Amerimex. Moreover, PPG does not
dispute that clause seven of the Surplus Conditions, read alone, requires it to
establish cause to cancel the Contract. Yet, to accept PPG’s argument—that
clause fourteen of the Purchase Order allows it to terminate without cause—
would render clause seven meaningless. See Clovelly Oil Co., 112 So. 3d at 192
(stating that “[e]ach provision in a contract must be interpreted in light of the
other provisions” and that the court should not construe the contract in a
manner that leads to “absurd consequences”).
      To be sure, PPG notes that Cadena, Amerimex’s principal, signed the
Acknowledgment Copy of each Purchase Order on the line designated for the
“Seller’s Signature” and that PPG’s representative signed the “Purchasing
Agent” line. But, this is not dispositive. At best, the signatures would render

      1   In its brief, PPG refers to “clause 19,” but this appears to have been a mistake.
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clause fourteen ambiguous in light of the plain language of the Purchase Order
and the existence of clause seven of the Surplus Conditions. Such ambiguity
must be resolved against PPG, the drafter of the Contract. See La. Civ. Code
Ann. art. 2056. Either way, clause fourteen of the Purchase Order did not
allow PPG to terminate the Contract without cause. Instead, clause seven of
the Surplus Conditions required cause for PPG to terminate the Contract, and
the district court did not err in so finding.
  2. PPG Did Not Establish Cause to Terminate
      The district court’s interpretation of the contract based on custom is
reviewed for clear error. See Preston Law Firm, 622 F.3d at 392. Likewise, its
ultimate determination that PPG breached the contract for lack of cause to
terminate is a finding of fact that is reviewed for clear error. See Flint Hills
Res. LP v. JAG Energy, Inc., 559 F.3d 373, 375 (5th Cir. 2009). Here, the
district court concluded that PPG did not have cause to terminate the contract
because custom allowed Amerimex to take the nonferrous metals included in
the scrap metal piles.
      Neither party appears to dispute that the Contract lacks a provision and
is ambiguous as to how Amerimex should process the higher valued nonferrous
metals that may be included in a scrap pile. Indeed, as the district court noted,
the Contract does not detail “how or in what manner Amerimex would come
into contact with the metals it was allowed to remove or what procedure it was
to use to separate out anything that did not qualify as ‘No. 2 heavy melt scrap
and crushed drums.’” The district court thus turned to extrinsic evidence, and
found that:
            The uncontested evidence offered at trial was that PPG
      created a scrap pile in its yard that was mostly [scrap steel] to be
      disposed of by Amerimex. It is also uncontested that routinely
      PPG would inspect the piles and remove from them items such as
      high quality metals inadvertently placed there.

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            ....
             Amerimex was to remove all materials left in the scrap pile.
      In fact, the contract requires that Amerimex “clean the scrap yard
      to bare ground.” On occasion Amerimex would notice items, more
      valuable than [scrap steel] and would notify PPG. PPG would then
      reclaim these items. PPG never contracted to have Amerimex sort
      through the scrap pile. . . . Further, the evidence adduced at trial
      clearly indicated that it was the customary practice of PPG’s scrap
      metal buyers, before, after, and during Amerimex’s contract to
      take everything in the scrap metal pile. PPG employees testified
      that scrap buyers before Amerimex would use large mechanical
      arms to indiscriminately grab portions of the scrap pile to load into
      their trucks for hauling out. PPG knew of this practice and knew
      that pieces of high value metal would be taken along with the
      [scrap steel].
PPG does not argue that the district court clearly erred in any one of these
factual findings.
      PPG argues instead that it had sufficient cause to terminate the contract
because Amerimex took high-value metals that Amerimex knew it was not
supposed to, and failed to “clean the scrap yard to bare ground” as required
under the Contract. Amerimex responds that the only cause cited in the
termination notice was Amerimex’s attempted removal of high-value metal on
October 31, 2006. Custom and PPG’s contract, Amerimex continues, permitted
the attempted removal. We agree and find substantial evidence in the record
to support the district court’s finding that custom permitted Amerimex to take
the entire scrap pile, including any nonferrous metals in the pile.
      To begin, the record shows that PPG’s custom was to make a scrap pile
for the scrap buyer. The pile invariably contained metals other than scrap
steel, including nonferrous metals. Cadena testified that, when he worked at
Southern Scrap on its PPG contract, “[t]he pile was bidded out as is . . . . And
then you would go in there and just pick everything up [because] it wasn’t
feasible for anybody to sit there and separate all that.”       Cadena further

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testified that when he worked at Calcasieu Recycling, another scrap steel
buyer, their procedure was to take from PPG the entire pile, including
nonferrous metals.
      PPG’s own employees testified to the same effect.           Andrew Guidry
(“Guidry”), the supervisor prior to Trahan, agreed that “contractors prior to
Amerimex [were] of the custom of coming in with their equipment [and] picking
up whatever was in [the scrap] pile and taking it out of PPG’s facility.” Guidry
testified that the prior contractors would use a “large grab arm [to] pick [up
the scrap] and put it in the trailer” and agreed that the contractors would “grab
whatever they could in [the scrap] pile and throw it in their truck,” including
“metal other than No. 2 heavy melt.” James Gregory Arceneaux (“Arceneaux”),
a laborer in PPG’s scrap yard, agreed that Southern Scrap, before and after
Amerimex had the contract, “grabbed whatever was in the pile” even if “it was
[a nonferrous metal]” and “left the plant.”
      Such testimony from Cadena, Guidry, and Arceneaux supports the
district court’s finding that the scrap pile buyer customarily took everything in
the scrap pile, including nonferrous metals. Indeed, the contract required
Amerimex to “clean the scrap yard to bare ground.” In view of the record as a
whole, PPG’s citation to two statements from Cadena’s testimony—
purportedly reflecting his knowledge that he was not to take nonferrous
metals—does not evince “a definite and firm conviction that a mistake has been
committed.” See French, 637 F.3d at 577 (internal quotation marks omitted);
see also Fed. R. Civ. P. 52(a)(6) (“[T]he reviewing court must give due regard to
the trial court’s opportunity to judge the witnesses’ credibility.”).
      Accordingly, the district court did not clearly err when it found that that
custom permitted Amerimex to remove the entire scrap metal pile, including
nonferrous metals. The district court properly found that PPG did not have
cause to terminate the Contract.
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C. Damages
      Where the district court has not committed a legal error, “this court
reviews the district court’s award of damages for clear error only. If the award
of damages is plausible in light of the record, a reviewing court should not
reverse the award even if it might have come to a different conclusion.” In re
Liljeberg Enters., Inc., 304 F.3d 410, 447 (5th Cir. 2002) (footnotes and internal
quotation marks omitted).
      The district court found that, “[d]ue to the many variables, such as the
various types of metals at issue, uncertain amounts, and fluctuating values, a
precise measure of damages owed to Amerimex cannot be calculated with
mathematical certainty.”     In light of such uncertainty, the district court
correctly cited La. Civ. Code Ann. art. 1999 in noting that, “[w]hen damages
are insusceptible of precise measurement, much discretion shall be left to the
court for the reasonable assessment of these damages.” The district court
therefore calculated Amerimex’s lost profits based upon Amerimex’s historical
performance under the Contract in the 2006 fiscal year, because 2006 was the
only full year during which Amerimex performed under the Contract. Based
on Amerimex’s 2006 tax return, the district court calculated Amerimex’s 2006
cost of goods sold to gross sales ratio (“COGS-to-Sales ratio”) to be 50.7%, and
its expense to gross sales ratio (“Expense-to-Sales ratio”) to be approximately
18.6%. To project the quantity and COGS that Amerimex would have removed
during the unexpired portion of the Contract, the court considered the quantity
of scrap that Amerimex’s successor, Southern Scrap, removed in that period.
During that time period, Southern Scrap had hauled 8,168,360 pounds of scrap
metal, for which it paid PPG $549,679.65.
      Projecting Southern Scrap’s $549,679.65 COGS as Amerimex’s own
COGS during the same period, the district court calculated Amerimex’s lost
profits utilizing its historical COGS-to-Sales and Expense-to-Sales ratios.
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First, Amerimex’s gross sales were projected by dividing the estimated COGS,
or $549,679.65, by the COGS-to-Sales ratio of 50.7%. This projected gross sales
to be $1,084,180.77. Next, the COGS was subtracted from gross sales to derive
gross profit of $534,501.12. Third, the district court multiplied gross sales by
the Expense-to-Sales ratio to produce estimated expenses of $201,657.62.
Projected net profits for that time period would then be gross profits less
expenses, or $332,843.89. The district court reduced this amount by the sum
owed to PPG by Amerimex for unpaid scrap, $13,588.89. Thus, the court
awarded Amerimex $319,255.00 together with judicial interest and costs.
     PPG challenges the district court’s damages award on a number of
grounds.     First, PPG disagrees with the court’s evidentiary basis for the
damages figure. Second, PPG contends that its liability is limited under the
Contract.     Third, PPG briefly mentions a hodgepodge of arguments to
otherwise preclude or offset the award. Finally, PPG challenges the court’s
prejudgment interest award. Because the award of damages is plausible in the
light of the record, we reject each attempted challenge.
   1. Evidentiary Basis for Damages
       PPG raises multiple challenges to the baseline figures the district court
used to arrive at its award of $319,255.00 in lost-profit damages. 2 First, the
bulk of PPG’s challenge relies upon its assertion that, had PPG stopped
Amerimex from taking the more valuable nonferrous metals during the
damages period, then Amerimex would have actually generated a net loss on

       2 PPG also argues that “[t]he magistrate should have granted PPG’s motion in limine
and trial objections excluding Amerimex’s speculative lay testimony on lost profits and
should have denied any award of damages to Amerimex.” PPG, however, does not specify
what lay testimony the magistrate judge relied upon that PPG believes is speculative.
Accordingly, this argument is waived. See, e.g., In re Repine, 536 F.3d 512, 518 n.5 (5th Cir.
2008) (finding argument waived “due to inadequate briefing” where appellant “fail[ed] to
explain” the argument and did not “cite any authority to support her position” (citing L & A
Contracting Co. v. S. Concrete Servs., Inc., 17 F.3d 106, 113 (5th Cir. 1994))).
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the Contract. Second, PPG contends that Amerimex, in light of its historical
performance and limited machinery and employees, could not have removed as
much scrap as Southern Scrap, and even if Amerimex could, there was no
evidence that Amerimex would have in fact done so. Finally, PPG takes issue
with the historical ratios that the district court used, asserting instead that
the district court should have used a Profit-to-COGS ratio. According to PPG,
the Profit-to-COGS ratio was 17.22% for the fourteen months Amerimex
performed the Contract, whereas the Profit-to-COGS ratio of the damages
awarded amounted to 97.21%.
      None of PPG’s arguments demonstrate that the district court’s damages
award was not plausible in light of the record. PPG’s first argument is wholly
speculative, asserting in its brief that “Trahan certainly could and would have
exercised his and PPG’s right to stop that practice, limiting Amerimex to the
money-losing proposition actually provided in the contract.”        As its only
evidence, PPG quotes the magistrate judge’s comment that PPG could have
told Amerimex “we need to redo the way we’ve been doing this,” and
misleadingly attempts to construe it as, in PPG’s words, the court’s
“acknowledg[ment] that PPG could certainly have required Amerimex to abide
by the actual terms of the contract.” The court, however, made its comment in
urging the parties to “explore informal resolution,” and stated simply that “this
whole thing could have been avoided if somebody at PPG would have just sat
Mr. Cadena down . . . and said: You know what, we need to redo the way we’ve
been doing this.” This does not amount to evidence that PPG “certainly could
have and would have” stopped Amerimex from taking the higher value metals.
To the contrary, as the district court did in fact find, custom allowed Amerimex
to take everything in the scrap pile. See supra Part III(B)(2).
      As to PPG’s second argument, the district court squarely addressed
Amerimex’s historical performance and capacity to remove steel, and we reject
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                                 No. 13-30680
PPG’s position for the same reasons the district court cited. First, Amerimex’s
historical performance is not representative of its potential capacity because
the scrap pile at PPG grew substantially around the time Amerimex was
terminated.     Second, evidence demonstrated that Amerimex ordered
additional equipment in response to the increased supply of scrap. Although
PPG appears to dispute the date when such equipment was ordered, PPG does
not explain the relevance of the disputed date.        Finally, had PPG not
terminated the Contract, Amerimex would have had two months more than
Southern Scrap to clear the scrap. PPG does not argue, nor does it offer any
evidence to show, that any of these findings rebutting PPG’s position were
clearly erroneous.
      Similarly lacking in support is PPG’s argument that there is “no basis to
assume Amerimex would have performed as Southern Scrap did.”                PPG
contends that testimony “shows [Amerimex] was not even fully devoting the
extremely limited manpower it did have to trying to fulfill [the Contract].”
Even if Amerimex did not “fully” devote its manpower in the past, however,
PPG does not contend that Amerimex would have had to fully devote its
manpower to remove as much scrap as Southern Scrap did. On the contrary,
as Amerimex points out, Cadena testified that he could have hired additional
lay laborers to pick up that amount of metal.
      Finally, as to PPG’s proffered Profit-to-Sales ratio, PPG admits that it
omitted the cost of six loads because “Amerimex provided no proof of how much
Amerimex received on resale of these loads, and therefore no proof of any profit
from these loads,” and because there was no evidence that “the six
‘unaccounted’ loads from PPG were in fact materials purchased from PPG.” On
the record as a whole, the district court plausibly rejected both of these
assertions.

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                                  No. 13-30680
      As to the amount Amerimex received on resale of the six unaccounted
loads, Amerimex asserts that the six unaccounted loads collected from PPG
correspond to three sales of nonferrous metals that were close in time to the
collection dates of the six unaccounted loads. PPG responds that the three
sales do not correspond to the six unaccounted loads because the weights do
not match. Combined, the three sales amounted to 50,120 pounds of metal and
allegedly reflects the sale of the six unaccounted loads, which totaled 40,610
pounds. This 19% difference does not appear insubstantial, even considering
that the excess metal sold may have come from previous collections.
Nevertheless, as the district court noted and PPG does not dispute, because “a
precise measure of damages owed to Amerimex cannot be calculated with
mathematical certainty,” “much discretion shall be left to the court for the
reasonable assessment of these damages” (quoting La. Civ. Code Ann. art.
1999). In light of this discretion, there was enough correlation between the
weights and dates of the six unaccounted loads and three sales for the district
court to plausibly reject PPG’s attempt to wholly exclude the six loads and
instead find that those three sales accounted for, at least in part, the six loads.
      Moreover, the evidence plausibly demonstrates that Amerimex received
from PPG most, if not all, of its nonferrous metals comprising the six
unaccounted loads. Although Katie Cadena, an Amerimex employee, testified
that one could not “exactly” tell how much nonferrous metal sold by Amerimex
came from PPG, Minerva Cadena (“Minerva”), who owns the majority of
Amerimex, testified that Amerimex received most, if not all, of its nonferrous
metals from PPG. Specifically, Minerva testified that Amerimex was not in
the business of buying and selling nonferrous metals prior to the contract with
PPG, and that Amerimex “started getting [nonferrous metals] when we started
[the Contract] with PPG. We might have had a little bit of [nonferrous metals
before PPG] here and there, but really I don’t remember any large amounts
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                                  No. 13-30680
coming in.” When asked instead whether she “remember[ed] large amounts
[of nonferrous metals] coming in from PPG,” Minerva responded yes.
Moreover, when asked if there was any “other vendor from whom y’all would
acquire [nonferrous metals] in the 2005, 2006 period,” Minerva answered no.
      Based on the evidence that Amerimex attained most, if not all, of its
nonferrous metals from PPG, and the evidence that tended to show some
correlation between the six unaccounted loads and the three sales, the district
court plausibly rejected PPG’s complete omission of those six loads and instead
included the six unaccounted loads in calculating damages.
  2. Liability-Limitation Clause
      We review de novo the district court’s finding that clause one of the
Surplus Conditions did not limit Amerimex’s damages. See Musser Davis Land
Co., 201 F.3d at 563. PPG argues that the lost-profit damages the district court
awarded constitute special, indirect, and consequential damages, which clause
one of the Surplus Conditions precluded. Clause one provides, in relevant part:
      The limit of Seller’s liability for any claim arising out of this
      transaction whether in contract, tort or strict liability shall be the
      invoice price of the particular shipment out of which the claim
      arises and in no event shall seller be liable for any special, indirect
      or consequential damages.
PPG alternatively relies on clause one to limit the damages to “the invoice price
of the particular shipment out of which the claims arises,” which PPG alleges
is the October 31, 2006 shipment totaling $1,033.15. Amerimex contends that
this liability-limitation clause does not apply to the underlying action because
clause one attempts to limit liability for damage claims arising from “particular
loads of scrap metal.” In contrast, the underlying action did not make a claim
as to the quality of goods or to a particular shipment, but instead made a claim
as to PPG’s premature termination of the Contract as a whole.

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                                   No. 13-30680
      We decline PPG’s invitation to broadly construe clause one as a limit on
liability as to all claims arising out of the Contract. Clause one is narrower
than PPG suggests and is limited to particular loads. As the district court
reasoned, clause one is comprised of two sentences: the first “clearly disclaims
all warranties of the product that PPG is selling,” and the second, quoted
above, “limits the remedies available to Amerimex [to] claims arising from a
particular shipment [but] does not necessarily apply to claims arising out of a
breach of the contract as a whole.” Construed in this manner, clause one
cannot be read to apply here, where the underlying claims arose out of PPG’s
premature termination of the Contract as a whole, not out of a particular
transaction.
      Even if this construction were not the clear intent of the parties, clause
one is at least ambiguous because it may be subject to two reasonable
interpretations: narrowly, as found here, or broadly, as PPG suggests. Because
clause one is part of a standard form PPG drafted, the ambiguity must be
resolved against the drafter and in favor of Amerimex. See La. Civ. Code Ann.
art. 2056. The district court did not err when it found that clause one did not
limit PPG’s liability in this action.
  3. Additional Offsets to Damages
      PPG attempts to preclude or limit the damages award on a number of
other grounds.     First, PPG argues that the available remedy of specific
performance precluded damages. Second, PPG contends that the district court
should have accounted for work that Amerimex took on after the termination
of the Contract or, alternatively, that Amerimex failed to mitigate its damages.
Finally, PPG argues that it cannot be held liable for Trahan’s personal
misconduct. Each argument lacks merit.

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                                   No. 13-30680
         a. Specific Performance
      PPG argues that if specific performance is available as a remedy for
breach of contract of an obligation to deliver an item, then Louisiana law
precludes the remedy of damages. In support, it cites La. Civ. Code Ann. art.
1986, and Lombardo v. Deshotel, 94-1172, p. 6 (La. 11/30/94); 647 So. 2d 1086,
1090. In PPG’s view, it could have continued delivering scrap and steel drums
to Amerimex under the Contract, thereby precluding the district court’s
damages award.
      Amerimex responds that, as explained in comment (a) to the article,
Article 1986 gives the obligee the option of requiring specific performance, but
does not mandate it. Further, Amerimex contends that PPG waived this
argument because it is an affirmative defense that PPG did not plead. Finally,
Amerimex asserts that specific performance is impossible because the amount
of metals and allocation of higher value metals were not defined in the contract
and PPG had already hired a contractor who removed over two million pounds
of the existing scrap.
      PPG replies that comment (a) to Article 1986 cited a Louisiana Supreme
Court case, Girault v. Feucht, 117 La. 276, 41 So. 572 (1906), which itself
interpreted former Articles 1926 and 1927 and “allowed the plaintiff to obtain
specific performance.” In contrast, according to PPG, “present La. C.C. Art.
1986 allows only specific performance as a remedy for the type of breach
alleged by Amerimex, unless ‘specific performance is impracticable.’”
      We reject PPG’s argument. While comment (a) does cite Girault and its
interpretation of former Articles 1926 and 1927, comment (a) states: “This
Article is new, but it does not change the law. It restates a principle contained
in C.C. Arts. 1909, 1926, and 1927 (1870).” La. Civ. Code Ann. art. 1986, cmt.
(a). Moreover, in flat contradiction to PPG’s assertion, present Article 1986
provides that “the court shall grant specific performance plus damages for
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                                 No. 13-30680
delay if the obligee so demands.” La. Civ. Code Ann. art. 1986 (emphasis
added). PPG’s citation notwithstanding, Lombardo actually confirms that the
obligee has the option to demand specific performance. Lombardo, 647 So. 2d
at 1090 (citing La. Civ. Code Ann. art. 1986) (stating that the obligee has the
“right to exact, insofar as practicable, specific performance” (emphasis added));
see also Ogea v. Merritt, 2013-1085, p.21 n.11 (La. 12/10/13); 130 So. 3d 888,
902 n.11 (“[I]n a civil case, an aggrieved party may prefer specific performance
of an obligation rather than the payment of money.” (citing La. Civ. Code Ann.
art. 1986)). In other words, Amerimex had the option of demanding specific
performance, but was not required to do so.       Accordingly, whether or not
specific performance was an available remedy, Article 1986 does not preclude
Amerimex’s damages.
         b. Mitigation
      PPG argues, on the one hand, that the magistrate failed to account for
“more lucrative nonferrous business” that Amerimex turned to after the
termination of the Contract. On the other hand, PPG suggests that “[i]f . . .
Amerimex had not sought other business to replace the lost PPG business,”
then the damages award should be reduced for Amerimex’s failure to mitigate
damages. Thus, PPG continues, Amerimex should only be entitled to damages
for a period reasonably necessary to secure replacement business, “at most
perhaps a month or two.”
      PPG cites no legal authority to support its argument that the magistrate
judge should have accounted for the nonferrous metal business that Amerimex
allegedly turned its resources to. PPG’s factual support is equally lacking.
There is no evidence that Amerimex was able to shift its resources from
working on the Contract to other work. At best, PPG’s citations to the record
demonstrate that only one laborer was able to find work in Amerimex’s
nonferrous business. There were, however, at least two other laborers on the
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                                  No. 13-30680
Contract, and PPG cites no evidence that they also switched to Amerimex’s
nonferrous business. In fact, Cadena testified that the laborers worked “full
time” only in the sense that “they were on salary,” but that he “had to pay them
[their full-time salaries]” even though “[i]t was very hard to keep them busy.”
      In the alternative, PPG speculates that “if” Amerimex had not sought
other business, then the damages period should be “perhaps a month or two.”
Beyond this speculation, PPG makes no argument that Amerimex actually
failed to mitigate its damages. Mere speculation will not satisfy PPG’s burden
to prove that Amerimex did not make reasonable efforts to mitigate damages.
See Brassette v. Exnicios, 2011-1439, p. 10 (La. App. 1 Cir. 5/14/12); 92 So. 3d
1077, 1083–84 (stating that “[a]n obligee must make reasonable efforts to
mitigate the damage caused by the obligor’s failure to perform” and that “the
burden of proof is on the party asserting the [affirmative] defense [of a failure
to mitigate damages]” (quoting MB Indus., LLC v. CNA Ins. Co., 2011-0303, p.
10 (La. 10/25/11); 74 So. 3d 1173, 1180–81)).
         c. Trahan’s Misconduct
      PPG argues that the district court could not hold PPG liable “based on
Trahan’s alleged conduct” when the district court had found “‘no possibility of
recovery’ against Trahan himself.” PPG offers no legal authority in support
and no citations to the record suggesting that the district court held PPG
responsible for Trahan’s personal misconduct. PPG has waived this argument.
See, e.g., In re Repine, 536 F.3d at 518 n.5.
  4. Interest on Damages
      PPG argues that circuit precedent permitting the award of prejudgment
interest under state law—see, e.g., Bost. Old Colony Ins. Co. v. Tiner Assocs.,
288 F.3d 222, 233–34 (5th Cir. 2002)—is contrary to the language of 28 U.S.C.
§ 1961 and Federal Rule of Appellate Procedure 37, and should be overruled.
However, PPG fails to explain the manner in which circuit precedent is
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                                 No. 13-30680
contrary to section 1961 and Rule 37, and offers no other argument or legal
authority in support. Nor does PPG argue that there has been an intervening
change in law that would permit this panel to decline to follow the precedent
PPG cites. See, e.g., Jacobs v. Nat’l Drug Intelligence Ctr., 548 F.3d 375, 378
(5th Cir. 2008) (“It is a well-settled Fifth Circuit rule of orderliness that one
panel of our court may not overturn another panel’s decision, absent an
intervening change in the law, such as by a statutory amendment, or the
Supreme Court, or our en banc court.” (citation omitted)). Because of this
inadequate briefing, PPG has waived this argument. See, e.g., In re Repine,
536 F.3d at 518 n.5.
      In sum, the district court did not err in its damages award.
D. Indemnification Clauses
      We review de novo the district court’s construction of the Contract’s
indemnification clauses. See Musser Davis Land Co., 201 F.3d at 563. PPG
points to two indemnity provisions—clause eleven of the Purchase Order
Conditions and clause three of the Surplus Conditions—to extinguish its
liability for damages and to be awarded its costs in defending itself against the
suit. The district court found that neither clause indemnified PPG.
      PPG’s argument concerning clause eleven of the Purchase Order
Conditions is quickly disposed of. Clause eleven provides that “Seller agrees
to indemnify . . . Buyer . . . from and against any and all damages.” As above,
PPG is the “Seller” and Amerimex is the “Buyer.” See supra Part III(B)(1).
Clause eleven therefore does not require Amerimex to indemnify PPG.
      Nor does clause three of the Surplus Conditions require Amerimex to
indemnify PPG. It states in full:
      3. Indemnity: Buyer agrees to indemnify and save Seller, its
      subsidiaries and affiliates, harmless from any and all judgments,
      orders, decrees, awards, costs, expenses, including attorneys’ fees
      and claims on account of damage to property (including claims
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                                 No. 13-30680
      under      the     Comprehensive       Environmental       Response,
      Compensation and Liability Act [“CERCLA”], the Resource
      Conservation and Recovery Act [“RCRA”] and similar federal,
      state or local laws) or personal injury (including death) which may
      be sustained by the Buyer, the Buyer’s employees, or the Seller, or
      the Seller’s employees, or third persons, and arising out of or in
      connection with this sale, or the use or handling of the equipment
      or material sold whether such loss, damage, injury or liability is
      contributed to by the negligence of Seller or its subsidiaries or
      affiliates or their employees (except that this indemnity shall not
      apply to damages, injuries or the cost incident thereto to the extent
      caused by the sole negligence of the Seller).
PPG cites Wallace v. Shreve Memorial Library, 79 F.3d 427, 429–30 (5th Cir.
1996), and Anderson v. Orleans Parish School Board, 340 F. Supp. 2d 716, 720
(E.D. La. 2004), for the proposition that “a contract with a definite term and
terminable only for cause is a species of property.” Therefore, PPG contends,
the termination of the contract constitutes damage to its property. In response,
Amerimex argues that the “general, plain and popular meaning of damage to
property would be damage to our possessions, our car, our boat, our home and
the like.”
      Neither Wallace nor Anderson support PPG’s assertion that “a contract
with a definite term and terminable only for cause is a species of property.”
Rather, those cases decided a different question: whether a plaintiff’s public
employment contract constituted a property interest warranting a pre-
deprivation hearing under the Due Process Clause. See Wallace, 79 F.3d at
429; Anderson, 340 F. Supp. 2d at 719–20. PPG does not offer any explanation
as to how such a “property interest,” in the context of procedural due process,
is applicable here. Indeed, PPG does not cite any evidence suggesting that the
parties intended “property” to include intangible property interests as used in
Wallace and Anderson or otherwise.

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                                  No. 13-30680
      On the contrary, reading the clause as a whole, “property” plainly refers
to tangible property.    For example, clause three includes as examples of
“damages to property” CERCLA and RCRA, both of which are acts intended to
combat damage to the environment—i.e., tangible property. See, e.g., 42 U.S.C.
§ 6902(a) (“The objectives of [the RCRA] are to promote the protection of health
and the environment and to conserve valuable material and energy
resources . . . .”); Lyondell Chem. Co. v. Occidental Chem. Corp., 608 F.3d 284,
289 (5th Cir. 2010) (“CERCLA is Congress’s answer to the serious
environmental and health risks posed by industrial pollution and was designed
to promote the timely cleanup of hazardous waste sites and to ensure that the
costs of such cleanup efforts were borne by those responsible for the
contamination.” (footnotes and internal quotation marks omitted)). Moreover,
clause three applies only for damage “arising out of or in connection with this
sale, or the use or handling of the equipment or material sold,” further
suggesting that the provision concerns damage to tangible property, e.g.,
equipment or material.
      In any event, even if the Contract could reasonably be considered a
“species of property,” the Contract is ambiguous as to whether the term
“property” in clause three refers to tangible property, intangible property
interests, or both. Given this ambiguity, clause three must be interpreted
against the drafter, PPG. See La. Civ. Code Ann. art. 2056. Accordingly, the
breach of contract claim here is not “damage to property” and, thus, clause
three does not indemnify PPG in this case.
                            IV.    CONCLUSION
      For the reasons herein, we AFFIRM the district court in all respects.

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