Court Opinion

ID: 2718447
Source: CourtListenerOpinion
Date Created: 2014-08-16 05:00:35.589649+00
Date Added: 2024-06-11T15:33:22.295637
License: Public Domain

Case: 13-20619      Document: 00512735148         Page: 1    Date Filed: 08/15/2014

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT

                                    No. 13-20619                         United States Court of Appeals
                                  Summary Calendar                                Fifth Circuit

                                                                                FILED
                                                                          August 15, 2014
COLLECTIVE ASSET PARTNERS, L.L.C.,                                         Lyle W. Cayce
                                                                                Clerk
                                                 Plaintiff - Appellant
v.

VTRADER PRO, L.L.C.; HERB KURLAN,

                                                 Defendants - Appellees

                   Appeal from the United States District Court
                        for the Southern District of Texas
                              USDC No. 4:12-CV-203

Before DAVIS, BENAVIDES, and PRADO, Circuit Judges.
PER CURIAM:*
       Plaintiff-Appellant appeals the district court’s grant of summary
judgment in this breach of contract action. Finding no error, we AFFIRM.
              I.     BACKGROUND
       This suit stems from a contract to sell a Collateralized Mortgage
Obligation (“CMO”) that was owned by the Plaintiff-Appellant, Collective
Asset Partners, L.L.C. (“Collective Asset”). A CMO is a mortgage-backed bond

       * 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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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                                  No. 13-20619
secured by payment from a pool of mortgages. CMOs are traded through the
Depository Trust Company (“DTC”), which was created as a national system
for clearance and settlement of transactions in securities.        To transfer a
security held by the DTC, the owner of the security must execute a “DTC
Request Form.”
      Defendants-Appellees, VtraderPro, L.L.C. and its CEO, Herb Kurlan
(collectively referred to as “VPRO”), sent a letter to Collective Asset’s managing
member, Ted Peters, asking to purchase a particular CMO for $400,000. The
letter provided in pertinent part as follows:
            Dear Ted,
            This letter will serve as an agreement between Vtrader PRO,
      LLC (VPRO) and Collective Asset Partners for the purchase of
      JPMCC 2007 – LDP11 Cusip #US46631BAH87 with a face value
      of U.S. $500,000,000. The purchase price is $400,000 and this
      amount is to be paid to you within 10 business days from the date
      of transfer of the CMO’s [t]o:

      CITIBANK NY
      DTC 908
      Account 089154 CSC73464
      Further Credit to:
      Collective Asset Partners, LLC
      Beneficiary Deposit Account NR. 840
      BSI SPA San Marino

      Subsequently, Collective Asset hired a broker to make the transfer, and
the broker filled out a “DTC Request Form.” The broker provided information
about the DTC account and the San Marino bank account. However, the
information was incomplete and thus the CMO was transferred to the DTC but
failed to thereafter transfer to the San Marino bank account. VPRO refused to

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                                No. 13-20619
pay for the CMO. The CMO was returned to Collective Asset, and it sold the
CMO to a different buyer for $175,069.41.
      Collective Asset brought the instant lawsuit, alleging that VPRO
breached the contract by failing to pay the agreed purchase price of $400,000
for the CMO. After discovery was conducted, the parties filed cross motions
for summary judgment. The district court granted VPRO’s motion and denied
Collective Asset’s motion.   The district court ruled that the terms of the
contract required Collective Asset to transfer the CMO to the San Marino bank
account. Thus, it held that because the CMO never transferred to the San
Marino bank account, VPRO had no duty to pay Collective Asset. Further, the
court stated that regardless of whether the “contract was bilateral or
unilateral, the undisputed facts in the summary judgment record show that
Collective Asset would not fulfill its contractual obligations until the CMO
reached the San Marino bank account.” Collective Asset now appeals.
             II.   ANALYSIS
      Collective Asset contends that the district court erred in granting VPRO
summary judgment. This Court reviews a grant of summary judgment de
novo, applying the same standards as the district court. Am. Home Assurance
Co. v. United Space Alliance, LLC, 378 F.3d 482, 486 (5th Cir. 2004). “A
summary judgment motion is properly granted only when, viewing the
evidence in the light most favorable to the nonmoving party, the record
indicates that there is no genuine issue as to any material fact, and that the
moving party is entitled to judgment as a matter of law.” Id.; see also FED. R.
CIV. P. 56(a).
      It is undisputed that Texas law applies. Under Texas law, the elements
of a breach of contract claim are: “1) the existence of a valid contract; 2)
performance or tendered performance by the plaintiff; 3) breach of the contract

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                                 No. 13-20619
by the defendant; and 4) damages to the plaintiff resulting from the breach.”
Lewis v. Bank of Am. NA, 343 F.3d 540, 545 (5th Cir. 2003).
      Here, the parties contend, and we agree, that there was a valid contract
in existence. With respect to the second element, the district court held that
Collective Asset failed to fully perform because the terms of the contract
required the CMO to be transferred to the San Marino bank account. Thus,
VPRO’s refusal to pay was not a breach of the agreement. Collective Asset
argues that the language of the agreement shows that VPRO promised to pay
once the CMO was transferred to the DTC account. Alternatively, Collective
Asset argues that the language is ambiguous.
      Whether a contract is ambiguous is a question of law for the court to
decide by looking at the contract as a whole in light of the circumstances
present when the contract was entered into. In re El Paso Refinery, LP, 302
F.3d 343, 353 (5th Cir. 2002); Friendswood Dev. Co. v. McDade & Co., 926
S.W.2d 280, 282 (Tex. 1996). If the contract terms are susceptible to only one
reasonable construction, the contract is unambiguous and will be enforced as
written. Guar. Nat. Ins. Co. v. Azrock Indus. Inc., 211 F.3d 239, 243 (5th Cir.
2000). “[A] contract is ambiguous only when the application of the applicable
rules of interpretation to the instrument leave it genuinely uncertain which
one of the two meanings is the proper meaning . . . .” R & P Enter. v. LaGuarta,
Gavrel & Kirk, Inc., 596 S.W.2d 517, 519 (Tex. 1980). “The failure to include
more express language of the parties’ intent does not create an ambiguity when
only one reasonable interpretation exists.” Columbia Gas Transmission Corp.
v. New Ulm Gas, Ltd., 940 S.W.2d 587, 591 (Tex. 1996).
      The language of the contract provided that VPRO would pay $400,000
“within 10 business days from the date of the transfer of the CMO’s” to the
DTC account and “Further Credit to” the BSI SPA San Marino bank account.
We do not find these terms to be ambiguous. Moreover, the circumstances
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                                       No. 13-20619
surrounding the performance indicate that both transfers were required under
the contract. 1 The DTC request form filled out by Collective Asset’s broker
attempted to effectuate the transfer to the San Marino bank account.
However, the broker apparently failed to sufficiently identify the San Marino
account.
       When interpreting a written contract, the primary concern of the Texas
courts is to determine the true intentions of the parties as expressed in the
instrument. R & P Enter., 596 S.W.2d at 518. Accordingly, the court should
“consider the entire writing in an effort to harmonize and give effect to all the
provisions of the contract so that none will be rendered meaningless.” Coker v.
Coker, 650 S.W.2d 391, 393 (Tex. 1983) (emphasis in original). Collective
Asset’s interpretation of the contract would not give effect to the term in the
agreement providing that it would “further credit” the CMO to the San Marino
account.     Under these circumstances, we conclude the only reasonable
interpretation is that VPRO was not required to pay until the CMO was
transferred to the San Marino bank account.                 The district court properly
granted summary judgment in favor of VPRO. 2 Thus, the district court’s
judgment is AFFIRMED.

       1  Collective Asset points out that it had no control over the CMO once the CMO was
transferred to the DTC account. However, VPRO likewise did not have control over the CMO
after the transfer to the DTC account.
        2 Further, we agree with the district court that regardless of whether the contract is

a unilateral or a bilateral contract, summary judgment was properly granted for VPRO.
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