Court Opinion

ID: 9393227
Source: CourtListenerOpinion
Date Created: 2023-05-09 18:00:24.817647+00
Date Added: 2024-06-11T17:18:51.650941
License: Public Domain

Case: 22-10458        Document: 00516743577             Page: 1      Date Filed: 05/09/2023

             United States Court of Appeals
                  for the Fifth Circuit                                        United States Court of Appeals
                                                                                        Fifth Circuit

                                     ____________                                     FILED
                                                                                     May 9, 2023
                                      No. 22-10458                               Lyle W. Cayce
                                     ____________                                     Clerk

   Gregory A. Blanchard,

                                                                    Plaintiff—Appellant,

                                            versus

   Denise Via; Direct Health Care, Incorporated,

                                              Defendants—Appellees.
                     ______________________________

                     Appeal from the United States District Court
                         for the Northern District of Texas
                               USDC No. 5:20-CV-170
                     ______________________________

   Before Wiener, Stewart, and Engelhardt, Circuit Judges.
   Per Curiam: *
         Plaintiff-Appellant Gregory Blanchard expressed interest in buying
   Defendant-Appellee Denise Via’s business entity, Direct Health Care, Inc.
   (“DHC”). To that end, Blanchard provided services to DHC to ensure its
   health before the purchase. This relationship spanned several years, both
   prior to and after the execution of a Purchase Agreement on February 7, 2019.
   But the sale never happened.

         _____________________
         *
             This opinion is not designated for publication. See 5th Cir. R. 47.5.
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                                      No. 22-10458

          The parties now dispute whether Blanchard is owed compensation for
   his services to DHC during those years. A jury found that DHC owed
   Blanchard $35,000 pursuant to quantum meruit, but the district court
   granted DHC’s renewed motion for judgment as a matter of law and set aside
   that verdict. We affirm.
                         I. FACTS AND PROCEEDINGS
          Via owns and operates DHC, a home health and hospice provider. Via
   first met Blanchard in 2015 and stayed in close contact for the next five years
   regarding the potential sale of DHC. Blanchard continuously expressed
   interest in purchasing DHC. To ensure the business’s continued health,
   Blanchard assisted in DHC’s operations: He paid the deposit for DHC’s new
   office lease, guaranteed and made monthly payments on DHC’s promissory
   notes, reviewed DHC’s financial statements, and provided related advice.
          Blanchard and Via entered into a Purchase Agreement regarding
   DHC on February 7, 2019, which acknowledged:
        That implemented business practices that have been adopted have
        value. That value shall be $100,000/yr beginning in 2017 for the
        purpose of compensation in the event of any termination, breakup,
        liquidation, dispositionany [sic] event which constitutes a material
        change of any kind.
   Blanchard continued to provide his services, largely unchanged, after the
   Purchase Agreement was executed. That included his review of DHC’s
   financials and making monthly payments on the promissory note. 1

          _____________________
          1
            Blanchard was eventually compensated for the payments he made from his own
   pocket, whether it be for the lease or note payments.

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                                    No. 22-10458

          In 2020, the parties’ relationship started to deteriorate. Blanchard and
   Via disagreed on patient care decisions, and the Purchase Agreement was
   terminated.
          The instant action ensued and eventually went to trial. Blanchard’s
   claims included promissory estoppel, negligent misrepresentation, quantum
   meruit, common law fraud, and unjust enrichment. He also sought punitive
   damages for fraud. The jury found for Defendants-Appellees on all claims
   except quantum meruit against DHC, for which it awarded Blanchard
   $35,000. DHC renewed its motion for judgment as a matter of law on
   quantum meruit. The district court agreed with DHC’s position and set aside
   the jury’s verdict. Blanchard appeals that decision.
                           II. Standard of Review
          This court reviews de novo a district court’s ruling on a motion for
   judgment as a matter of law. CBE Group, Inc. v. Lexington Law Firm, 993 F.3d
   346, 349 (5th Cir. 2021). Such motions are granted “only if, when viewing
   the evidence in the light most favorable to the verdict, the evidence points so
   strongly and overwhelmingly in favor of one party that the court believes that
   reasonable jurors could not arrive at any contrary conclusion.” Id. We also
   give credence to “evidence supporting the moving party that is
   uncontradicted and unimpeached, at least to the extent that evidence comes
   from disinterested witnesses.” Reeves v. Sanderson Plumbing Prods., Inc., 530
   U.S. 133, 151 (2000).
                                 III. Analysis
          This appeal presents only issues related to quantum meruit, an
   equitable remedy “based upon the promise implied by law to pay for
   beneficial services rendered and knowingly accepted” in the absence of an
   express agreement. Vortt Expl. Co., Inc. v. Chevron USA, Inc., 787 S.W.2d
   942, 944 (Tex. 1990) (“Vortt”). Here, the district court concluded the

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                                          No. 22-10458

   Purchase Agreement was not an enforceable contract because Blanchard did
   not provide independent consideration in exchange for the option period
   within the Purchase Agreement. In Texas, a claim for quantum meruit
   requires that: “1) valuable services were rendered or materials furnished; 2)
   for the person sought to be charged; 3) which services and materials were
   accepted by the person sought to be charged, used and enjoyed by him; 4)
   under such circumstances as reasonably notified the person sought to be
   charged that the plaintiff in performing such services was expecting to be paid
   by the person sought to be charged.” Id.
           The instant parties dispute the fourth element—whether DHC had
   “reasonable notice” that Blanchard expected payment for his services. Texas
   law on quantum meruit is well-established. 2 Texas courts have denied
   recovery under quantum meruit when the plaintiff rendered services to gain
   a business advantage or opportunity. See Anubis Pictures, LLC v. Selig, No.
   05-19-00817-CV, 2021 WL 805214, at *12 (Tex. App.—Dallas Mar. 3, 2021,
   no pet.) (“Finally, it is elementary in the law governing quantum meruit that
   no recovery can be had for preliminary services that are performed with a
   view to obtaining business through a hoped-for contract.”); Peko Oil USA v.
   Evans, 800 S.W.2d 572, 576-77 (Tex. App.—Dallas 1990) (“We conclude
   that an expectation of a future business advantage or opportunity cannot form
   the basis of a quantum meruit claim.”). This is a widely adopted aspect of
   quantum meruit across jurisdictions. See Anderson v. Iceland Seafood Corp.,
   No. 94-60862, 1996 WL 46554, at *2 & n.11 (5th Cir. 1996) (“[A] claimant is
           _____________________
           2
              After considering the relevant factors, we conclude that Blanchard’s requested
   certification to the Texas Supreme Court is unnecessary. See Troice v. Greenberg Traurig,
   LLP, 921 F.3d 501, 504 (5th Cir. 2019) (citing Florida ex rel. Shevin v. Exxon Corp., 526 F.2d
   266, 275 (5th Cir. 1976)). Although that state’s highest court has not directly examined this
   principle, ample sources of state caselaw on this issue exist, and the parties have not
   presented cases inapposite. Furthermore, the stakes at issue here do not warrant the
   additional expenditure of that court’s resources to resolve.

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   not entitled to recover in quantum meruit when services have been rendered
   with the expectation that a future business opportunity or contract—rather
   than direct compensation—will be forthcoming.”) (collecting cases).
          The instant record is replete with evidence that Blanchard wished to
   gain a business advantage or opportunity. He provided services to improve
   DHC’s financial health prior to his purchase of it. At no point were these
   services rendered for cash payment, and Via testified that Blanchard did not
   ask for compensation in return for his pre-execution services. Blanchard
   himself stated that he provided his services with the expectation that he
   would ultimately buy DHC. He admitted on cross examination that, at the
   times he provided services to DHC in 2017 and 2018—before the execution
   of the Purchase Agreement—he did so without an expectation of payment.
   After the Purchase Agreement was executed, his services were identical to
   those he provided prior to its execution.
          The district court thoroughly examined Texas caselaw—as it is well
   equipped to do—in coming to its decision on quantum meruit. That court’s
   treatment of Texas caselaw regarding reasonable notice hardly qualifies as a
   disregard of Vortt, which the district court distinguished from the instant
   case. See Vortt, 787 S.W.2d at 944. In Vortt, the parties engaged in
   negotiations regarding a joint operating agreement but did not reach an
   agreement. Id. The Texas Supreme Court’s relatively brief majority opinion
   does not treat the aforementioned principle of business advantage, but
   instead considers only “whether the trial court’s findings of fact were
   sufficient to allow [Vortt] to recover under quantum meruit for seismic
   information provided by Vortt to [Chevron].” Id. at 943. Vortt provided that
   information to encourage Chevron’s participation in the deal to develop the
   land jointly. Here, we observe that Blanchard did not provide his services to
   encourage Via’s participation in the sale. He did so instead for his own benefit
   in receiving both a more favorable rate and the benefits of a healthier DHC.

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            The issue was framed well by the district court: “whether a plaintiff
   can recover in quantum meruit where he negotiates for the sale of a business
   . . . but does not, at the outset, provide reasonable notice to the defendant
   that he expects compensation for any services subsequently provided.” The
   parties here are businesspeople who engaged in a lengthy courtship regarding
   the sale of a company. Under such circumstances, one party cannot suddenly
   spring obligations for payment on the other. Although the question should
   have been taken away from the jury earlier, the mechanism for a renewed
   motion for judgment as a matter of law exists for a reason. FED. R. CIV. P.
   50(b).
                                IV. Conclusion
            The district court’s judgment is AFFIRMED.

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