Court Opinion

ID: 4194670
Source: CourtListenerOpinion
Date Created: 2017-08-10 00:01:06.785859+00
Date Added: 2024-06-11T07:47:18.275568
License: Public Domain

Case: 17-50139      Document: 00514109515         Page: 1    Date Filed: 08/09/2017

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

                                    No. 17-50139
                                                                                  FILED
                                                                             August 9, 2017
                                  Summary Calendar
                                                                             Lyle W. Cayce
                                                                                  Clerk
INTERNATIONAL CORRUGATED AND PACKING SUPPLIES,
INCORPORATED,

              Plaintiff - Appellee

v.

LEAR CORPORATION; LEAR MEXICAN SEATING CORPORATION,
formerly known as Lear Trim, L.P.,

              Defendants - Appellants

                   Appeal from the United States District Court
                        for the Western District of Texas
                             USDC No. 3:15-CV-405

Before HIGGINBOTHAM, PRADO, and HAYNES, Circuit Judges.
PER CURIAM:*
       Lear Corporation and Lear Mexican Seating Corporation, formerly
known as Lear Trim, L.P., (collectively, “Lear”) appeal the district court’s
denial of a motion to reconsider its order denying Lear’s motion to compel
arbitration. For the reasons explained below, we VACATE and REMAND.

       * 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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.
    Case: 17-50139     Document: 00514109515      Page: 2   Date Filed: 08/09/2017

                                  No. 17-50139

                                I. Background
      Lear purchased packaging materials from International Corrugated and
Packing Supplies, Inc. (“Intercorpac”) from April 2007 to November 2014.
Intercorpac subsequently sued Lear in state court for unpaid invoices related
to these transactions. Lear removed to federal court, and around eight months
later Lear moved to compel arbitration pursuant to an arbitration clause
contained in terms and conditions that were referenced in its purchase orders.
      On December 21, 2016, the district court denied Lear’s motion to compel
because Lear failed to establish the existence of an agreement to arbitrate by
a preponderance of the evidence. It concluded that, because the evidence
lacked “sufficient details regarding how and when the underlying contracts
were formed,” Lear failed to show that the terms and conditions containing the
arbitration clause were incorporated into the parties’ contracts.
      The district court found that Lear’s only competent evidence of the
parties’ contractual relationship was (1) an affidavit from its Vice President of
North American Purchasing, declaring that all of Lear’s purchases were made
pursuant to purchase orders and (2) copies of the purchase orders. The district
court also considered Intercorpac’s evidence, which consisted of an affidavit
from its operations manager explaining how the transactions between the
parties occurred: Lear ordered its materials by calling or emailing Intercorpac
with a delivery request and then Lear sent payment by direct deposit after the
products were delivered. The district court criticized Lear’s affidavit for failing
to explain the process by which materials were ordered and when, if ever, the
purchase orders were sent to Intercorpac during that process. It also observed
that Lear failed to address any potential issues with the Texas Business and
Commerce Code’s signed writing requirements, given that some of the
purchase orders concerned the sale of goods of $500 or more but were never
signed by Intercorpac.

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    Case: 17-50139    Document: 00514109515      Page: 3   Date Filed: 08/09/2017

                                  No. 17-50139

      On February 10, 2017—more than fifty days after the denial of the
motion to compel arbitration and less than two weeks before trial—Lear filed
a motion to reconsider the district court’s order denying its motion to compel
arbitration. Lear argued that newly discovered emails showed that the role of
Lear’s purchase orders in the transactional process was that of an offer to
purchase materials, and the subsequent delivery of the requested materials
operated as Intercorpac’s acceptance of that offer, obviating the need for a
signed writing under the Texas Business and Commerce Code. Moreover, Lear
maintained that this new evidence would also show that Intercorpac had
proper notice of the terms and conditions containing the arbitration clause at
the time of contract formation.
      As to the basis of the newly discovered evidence, Lear explained that it
had searched a “previously-unaccessed e-mail archive . . . and identified 704 e-
mails between Lear and Intercorpac.” Of those emails, however, Lear cited
only three relevant email chains and discussed only one of them. The email
exchange Lear discussed involved an email to Intercorpac that attached a
purchase order and requested confirmation of receipt from Intercorpac. The
email contained a notice underneath the signature block explaining that “all
Lear purchases are governed by Lear’s Purchase Order Terms and Conditions
available at http://lear.covisint.com . . . .” Intercorpac responded “Received!!”
Lear also cited, but did not discuss, two additional emails: one that attached a
purchase order and requested receipt of delivery but with no response from
Intercorpac and another requesting rush delivery for an outstanding order
related to a different purchase order.
      The district court denied Lear’s motion to reconsider citing to Federal
Rule of Civil Procedure 54(b), which applies to motions to reconsider
interlocutory orders. Observing that “the precise standard for evaluating a
motion to reconsider under Rule 54(b) is unclear,” the court looked to the

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    Case: 17-50139     Document: 00514109515      Page: 4   Date Filed: 08/09/2017

                                  No. 17-50139

standard for Federal Rule of Civil Procedure 59(e)—relating to final orders—
to “inform [its] analysis.” In denying the motion to reconsider, the district court
explained that “at this late stage in the proceedings,” it would not entertain an
“attempt to address . . . issues that could and should have been properly
addressed in [Lear’s] Motion to Compel Arbitration.” Lear now appeals the
denial of its motion to reconsider.
                           II. Standard of Review
      We review a district court’s denial of a motion to reconsider for abuse of
discretion. Calpetco 1981 v. Marshall Expl., Inc., 989 F.2d 1408, 1414 (5th
Cir. 1993). An abuse of discretion occurs when a district court bases its
ruling “on an erroneous view of the law or a clearly erroneous assessment of
the evidence.” United States v. Yanez Sosa, 513 F.3d 194, 200 (5th Cir. 2008)
(quoting United States v. Ragsdale, 426 F.3d 765, 774 (5th Cir. 2005)).
                                III. Discussion
      A district court abuses its discretion when it relies on an incorrect rule
of civil procedure to deny a motion to reconsider an interlocutory order. Austin
v. Kroger Tex., L.P., --- F.3d ----, 2017 WL 1379453, at *8 (5th Cir. Apr. 14,
2017) (per curiam). Although the district court cited to the correct rule, it
incorrectly assumed that Rule 59 was sufficiently analogous that its standards
apply by analogy and then proceeded to apply Rule 59 standards. The district
court did not have the benefit of our opinion in Austin clarifying the difference
between these standards. Rather than engage in a proper Rule 54(b) analysis
in the first instance, we conclude that the district court should have the
opportunity to do so applying the proper standards. Accordingly, we VACATE
the order denying the motion to reconsider and REMAND for reconsideration.
We express no opinion on the ultimate outcome of this case.
      VACATED and REMANDED.

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