Court Opinion

ID: 9392074
Source: CourtListenerOpinion
Date Created: 2023-05-04 00:00:31.170802+00
Date Added: 2024-06-11T17:18:43.683943
License: Public Domain

Case: 22-40537      Document: 00516737024         Page: 1    Date Filed: 05/03/2023

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

                                 ____________                                FILED
                                                                          May 3, 2023
                                  No. 22-40537                          Lyle W. Cayce
                                 ____________                                Clerk

   In the Matter of Texxon Petrochemicals, L.L.C.,

                                                                           Debtor,

   Texxon Petrochemicals, L.L.C.,

                                                                       Appellant,

                                       versus

   Getty Leasing, Incorporated,

                                                                         Appellee.
                  ______________________________

                  Appeal from the United States District Court
                       for the Eastern District of Texas
                            USDC No. 4:21-CV-864
                  ______________________________

   Before Clement, Graves, and Higginson, Circuit Judges.
   Stephen A. Higginson, Circuit Judge:
          In late 2020, Appellant Texxon Petrochemicals, LLC (“Texxon”)
   filed for bankruptcy. In that proceeding, Texxon filed a motion to assume
   executory contract, alleging that it entered into a contract with Getty Leasing
   in 2018 to purchase property. Getty Leasing objected to the motion. After an
   evidentiary hearing, the bankruptcy court denied the motion on the grounds
   that, for multiple reasons, there was no valid contract to assume. The district
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                                          No. 22-40537

   court affirmed, finding there was insufficient evidence to show that, as
   required under Texas law, the alleged contract was sufficient as to the
   property identity or comprised an unequivocal offer or acceptance. Texxon
   appeals.
                                                 I.
           While Texxon’s appeal before the district court was pending, the
   bankruptcy court dismissed the underlying bankruptcy proceeding. 1 In
   opposing Texxon’s appeal before the district court, Getty Leasing did not
   address the impact that the dismissal of the underlying proceeding had as to
   the viability of the appeal. In this court, however, Getty Leasing filed an
   opposed motion to dismiss the appeal for lack of jurisdiction. In sum, Getty
   Leasing argues that because the relief sought by Texxon requires a remand to
   the bankruptcy court, the dismissal of the underlying bankruptcy proceeding
   mooted the present appeal. We first address this motion before turning to the
   merits of the appeal.
           Getty Leasing primarily contends that this appeal is mooted by the
   dismissal of the underlying bankruptcy proceeding. 2 In the bankruptcy

           _____________________
           1
              On June 2, 2021, the U.S. Trustee assigned to Texxon’s bankruptcy proceeding
   filed a motion seeking to either convert the case to Chapter 7, dismiss the case with
   prejudice, or subject Texxon to confirmation deadlines after Texxon failed to file required
   documents and pay required fees. On June 6, 2021, with the agreement of the parties, the
   bankruptcy court granted this motion in part, ordering Texxon to either obtain
   confirmation of a plan of reorganization, convert the case to Chapter 7, or move to dismiss
   the case with prejudice for 180 days by October 29, 2021. The bankruptcy court noted that
   failure to adhere to this deadline might result in an order dismissing the case with prejudice
   for 180 days without further notice or hearing. On November 18, 2021, after this deadline
   passed without confirmation or conversion, the bankruptcy court dismissed the case with
   prejudice to re-filing for 180 days. There is nothing in the record indicating that Texxon
   has re-filed or otherwise sought to reopen the bankruptcy proceeding.
           2
            Getty Leasing also contends that Texxon lacks standing to bring this appeal
   because Texxon is no longer a debtor-in-possession and therefore no longer entitled to

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   context, we recognize the judicially created doctrine of “equitable
   mootness,” which is a “kind of appellate abstention that favors the finality of
   reorganizations and protects the interrelated multi-party expectations on
   which they rest.” 3 In re Pac. Lumber Co., 584 F.3d 229, 240 (5th Cir. 2009);
   see also In re Manges, 29 F.3d 1034, 1038–39 (5th Cir. 1994). Getty Leasing
   appears to argue that the dismissal of an underlying bankruptcy proceeding
   operates similar to the confirmation of a reorganization plan and, therefore,
   effectively forecloses judicial relief. Texxon disagrees, arguing that equitable
   mootness does not apply here because the issue on appeal—the validity of
   the contract—involves a matter ancillary to the bankruptcy. 4 See, e.g., In re
   Sundaram, 9 F.4th 16, 21 (1st Cir. 2021) (“The principal exception to the
   general rule provides that an appeal is insulated from mootness following the
   dismissal of the underlying bankruptcy case if the issue on appeal is merely
   ancillary to the bankruptcy.”).

           _____________________
   assume any contract under the Bankruptcy Code. Put another way, Getty Leasing argues
   that the dismissal of the underlying bankruptcy has made it impossible for us to grant relief
   to Texxon. This argument is best considered as one relating to mootness, however, not
   standing. See Env. Conservation Org. v. City of Dallas, 529 F.3d 519, 525–26 (5th Cir. 2008)
   (“Mootness is the doctrine of standing in a time frame. The requisite personal interest that
   must exist at the commencement of litigation (standing) must continue throughout its
   existence (mootness).” (citation and internal quotation marks omitted)).
           3
             We assess three factors when determining whether equitable mootness should be
   applied: “(1) whether a stay was obtained, (2) whether the plan has been ‘substantially
   consummated,’ and (3) whether the relief requested would affect either the rights of parties
   not before the court or the success of the plan.” In re Pacific Lumber Co., 584 F.3d 229, 240
   (5th Cir. 2009) (citation and internal quotation marks omitted).
           4
             Most of the authority cited by Texxon in support of its position addresses whether
   a bankruptcy court may retain jurisdiction over pending matters, specifically adversary
   proceedings, when the underlying bankruptcy case is dismissed. See, e.g., Porges v. Gruntal
   & Co., Inc. (In re Porges), 44 F.3d 159, 162–63 (2d Cir. 1995); Empire State Building Co. LLC
   v. New York Skyline, Inc. (In re N.Y. Skyline), 471 B.R. 69, 78 (Bankr. S.D.N.Y. 2012);
   Stardust Inn, Inc. v. Doshi (In re Stardust Inn), 70 B.R. 888, 890 (Bankr. E.D. Pa. 1987).

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           Although Getty Leasing phrases the issue in terms of constitutional
   mootness, Getty Leasing does not dispute that the primary issue on appeal—
   the validity of the alleged contract—still exists between the parties, and that
   Texxon still has an interest in its resolution. See Already, LLC v. Nike, Inc.,
   568 U.S. 85, 91 (2013) (“A case becomes moot—and therefore no longer a
   ‘Case’ or ‘Controversy’ for purposes of Article III—when the issues
   presented are no longer ‘live’ or the parties lack a legally cognizable interest
   in the outcome.” (internal quotation marks omitted)). We therefore
   understand Getty Leasing’s core argument—that the dismissal has the effect
   of making it such that we “cannot order effective relief even though a live
   dispute remains”—to be based in equitable mootness. In re Hilal, 534 F.3d
   498, 500 (5th Cir. 2008).
           Resolution of this dispute raises unsettled questions in bankruptcy
   law, none of which was brought up or briefed by the parties. 5 Because we may
   affirm on the merits, we leave those issues for another day. See In re Pac.
   Lumber, 584 F.3d at 239 & n.14 (considering a motion to dismiss on the basis
   of equitable jurisdiction first because it “logically precedes” consideration of
   the merits of the appeal and comparing In re Continental Airlines, 91 F.3d 553,
           _____________________
           5
             For instance, it is unclear whether the bankruptcy court could properly determine
   the validity of the contract in the context of a motion to assume or whether the bankruptcy
   court should have required this dispute to be settled through a separate adversary
   proceeding. Compare Orion Pictures Corp. v. Showtime Networks, Inc. (In re Orion), 4 F.3d
   1095, 1099–1100 (2d Cir. 1993) (holding that contract issues, where one party has not
   violated a specific contractual clause, may not be decided as part of a motion to assume);
   with In re Transcom Enhanced Servs., LLC, 427 B.R. 585, 589 (Bankr. N.D. Tex. 2005)
   (stating that Orion should “not be read to limit a bankruptcy court’s authority to decide a
   disputed contract issue as part of hearing an assumption motion” and then resolving, as
   part of a motion to assume, whether the debtor qualified as a certain type of provider for
   purposes of the contract), vacated by AT&T Corp. v. Transcom Enhanced Servs., LLC, No.
   3:05-CV-1209-B, 2006 WL 8437448 at *3 (N.D. Tex. 2006) (finding the dispute moot and
   therefore declining to address whether the bankruptcy court acted correctly in addressing
   the contractual issue).

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   568–72 (3d Cir. 1996) (en banc) (Alito, J., dissenting) (reviewing the origin of
   equitable mootness and concluding that it does not present a jurisdictional
   question requiring consideration before the merits)); see also Lifemark Hosp.
   of La., Inc. v. Lijeberg Enters., Inc., No. 98-30610, 1999 WL 195247 at *2 (5th
   Cir. 1999) (“Because we reach the merits of this case, we need not consider
   [the appellee’s] motion to dismiss on the basis of equitable mootness, and
   this motion is therefore denied.”); Duff v. Central Sleep Diagnostics, LLC,
   801 F.3d 833, 841 (7th Cir. 2015) (“Because [the appellant’s] appeal is
   patently frivolous on the merits, however, we need not come to a firm
   conclusion about equitable mootness.”).
                                         II.
          “We review the decision of a district court, sitting in its appellate
   capacity, by applying the same standards of review to the bankruptcy court’s
   findings of fact and conclusions of law as applied by the district court.” In re
   Dean, 18 F.4th 842, 843–44 (5th Cir. 2021) (citation omitted). Accordingly,
   “[w]e review conclusions of law and mixed questions of law and fact de novo
   and review findings of fact for clear error.” Id. at 844. Here, Texxon appeals
   the bankruptcy court’s denial of a motion to assume an alleged contract to
   purchase real estate from Getty Leasing.
          Before declaring bankruptcy, Texxon had operated a gas station,
   convenience store, and car wash on the property located at 5301 North Lamar
   Boulevard (the “Leased Property”) in Austin, Texas. Texxon rented this
   space from Getty Realty Corporation. In 2018, Saravana Raghavan, who
   testified that he was Texxon’s owner, had a two-email exchange with Gary
   Bendzin, an asset manager from Getty Realty (not Getty Leasing, the
   appellee). Both below and on appeal, Texxon argues that this exchange
   constituted a contract between Texxon and Getty Leasing to purchase the
   Leased Property.

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          The exchange went as follows. On March 28, 2018, Bendzin emailed
   Raghavan with the subject line “Lamar Blvd., Austin, Texas.” Bendzin
   wrote, “Saravana, We are interested in selling the property for $350,000.
   You would need to pay the open A/R balance as well.” Attached to the email
   was a lease ledger from “Getty Reality Corp.” for Texxon Petrochemicals,
   LLC. The next day, March 29, 2018, Raghavan replied, writing:
          Gary
          Sure. Thanks for your help man. Michael always help on the real
          estate closer. We both will work with you and get this done asap.
          Michael – Lets meet today and discuss this property.
   Neither party took any further action to finalize and effectuate a sale of the
   Leased Property.
          Only three years later, in 2021, did Texxon first seek to execute the
   alleged contract, when it filed a motion to assume the alleged contract and
   consummate the sale. Getty Leasing opposed this motion, arguing that it
   never entered into a contract to sell the Leased Property. After a hearing, the
   bankruptcy court found there was no contract and denied the motion.
          In so finding, the bankruptcy court determined there was insufficient
   or no evidence that (1) the debtor was a party to the proposed contract, (2)
   the debtor signed the proposed contract, (3) the proposed contract was
   sufficient as to property identity, (4) there was an unequivocal offer or
   acceptance, (5) the proposed contract contained the date certain for
   performance, and (6) the expiration of two years without performance by
   Texxon was reasonable or sufficient for contract formation. The district
   court, finding that the contract was insufficient as to property identity or
   comprised an unequivocal offer or acceptance, affirmed.

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          As with the bankruptcy and district courts, we similarly hold that this
   brief email exchange did not demonstrate an offer or acceptance, as required
   for a contract to be binding under Texas law. See Angel, Tr. for Gobsmack Gift
   Tr. v. Tauch, 642 S.W.3d 481, 488 (Tex. 2022). “To prove that an offer was
   made, a party must show (1) the offeror intended to make an offer, (2) the
   terms of the offer were clear and definite, and (3) the offeror communicated
   the essential terms of the offer to the offeree.” Domingo v. Mitchell, 257
   S.W.3d 34, 39 (Tex. App.—Amarillo 2008, pet. denied).
          Texxon fails to show that the email exchange satisfied any of the three
   required elements of an offer. A statement that a party is “interested” in
   selling a property is not an offer to sell that property—it is an offer to begin
   discussions about a sale. See Brown v. Haywood, No. 07-02-0424-CV, 2004
   WL 757962 at *4 (Tex. App.—Amarillo Apr. 8, 2004) (pet. denied) (holding
   that a request asking whether a party has an “interest” in a proposal was not
   an offer but rather an inquiry into the desire of the other party). Nor were the
   terms of the offer clear or definite—indeed, the emails do not clearly identify
   Getty Leasing as the supposed seller, as Bendzin represented Getty Realty
   and nothing else in the emails suggest Getty Leasing’s involvement. See
   Maddox v. Vantage Energy, LLC, 361 S.W.3d 752, 757 (Tex. App.—Fort
   Worth 2012) (“Traditionally, Texas courts have presumed that a party
   contracts only for its own benefit…”).
          Finally, the alleged offer failed to identify the property to be conveyed.
   See Naumann v. Johnson, No. 03-19-00380-CV, 2021 WL 2212725 at *3 (Tex.
   App.—Austin June 1, 2021) (“In the sale of real property, the essential
   elements required, in writing, are the price, the property description, and the
   seller’s signature.” (citation omitted)). For a property description to be
   sufficient, “the writing must furnish within itself, or by reference to some
   other existing writing, the means or data by which the land to be conveyed
   may be identified with reasonable certainty.” Morrow v. Shotwell, 477 S.W.2d

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   538, 539 (Tex. 1972); see also Davis v. Mueller, 528 S.W. 3d 97, 101 (Tex. 2017)
   (describing this rule as “well settled” at the time Morrow was decided and
   noting that “[n]othing since then has occurred to call the rule into
   question”). Yet here, the alleged offer referenced, at most a Getty-owned
   property on Lamar Boulevard in Austin, Texas. 6 Put plainly, this is not
   enough information by which a person could identify the Leased Property
   with “reasonable certainty.”
           For these reasons, Texxon is unable to show the existence of a binding
   contract. Accordingly, we AFFIRM.

           _____________________
           6
            Although Texxon argues that the offer is more specific, namely, that it refers to a
   Getty-owned Texxon gas station and convenience store on Lamar Boulevard in Austin,
   Texas, there is nothing in the text of emails conveying such information.

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