Court Opinion

ID: 4357323
Source: CourtListenerOpinion
Date Created: 2019-01-09 20:00:47.1839+00
Date Added: 2024-06-11T14:46:38.001296
License: Public Domain

Case: 17-20388       Document: 00514786353         Page: 1     Date Filed: 01/08/2019

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

                                                                                   FILED
                                       No. 17-20388                          January 8, 2019
                                                                              Lyle W. Cayce
MUSKET CORPORATION,                                                                Clerk

               Plaintiff - Appellant Cross-Appellee

v.

SUNCOR ENERGY (U.S.A.) MARKETING, INCORPORATED,

               Defendant - Appellee Cross-Appellant

                   Appeals from the United States District Court
                        for the Southern District of Texas
                              USDC No. 4:15-CV-100

Before HIGGINBOTHAM, SMITH, and GRAVES, Circuit Judges.
JAMES E. GRAVES, JR., Circuit Judge:*
       Plaintiff-Appellant Musket Corporation (“Musket”) filed suit against
Defendant-Appellee Suncor Energy (U.S.A.) Marketing, Inc. (“Suncor”) in
federal court to resolve a dispute arising from a contract for the sale and
delivery of crude oil. Suncor filed counterclaims against Musket and moved to
dismiss some of Musket’s claims. The district court granted Suncor’s motion to
dismiss in part. After the close of discovery, Suncor moved for summary
judgment on Musket’s remaining claims. The district court granted Suncor’s

       *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 R. 47.5, the court has determined that this opinion should not be
published and is not precedent except under the limited circumstances set forth in 5TH CIR.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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motion in part. Musket moved for summary judgment on Suncor’s
counterclaims. The district court granted the motion. Both parties now appeal
part of the district court rulings on their respective motions.
       For the reasons stated below, we AFFIRM.
                                    I. BACKGROUND
       This case involves two major players in the U.S. crude oil market.
Musket is a leading commodity supply, trading, and logistics company, and an
affiliate of Love’s Travel Stops and Country Stores, Inc.; the second largest
diesel retailer in the United States. A substantial part of Musket’s business
involves shipping crude oil by rail, generally from terminals located near crude
oil production sites to refineries. Suncor is a crude oil supply, marketing, and
trading company based in Colorado, advertised as guaranteed by Suncor
Energy, Inc.—the first company to develop oil sands 1—which remains its
largest producer.
                          A. The Contractual Relationship
       In July 2012, Suncor engaged Musket to become the exclusive supplier
of crude oil to Musket’s Windsor, Colorado terminal (the “Windsor Terminal”).
Musket alleges Suncor represented that Suncor could, among other things,
provide 20,000 barrels of crude oil per day to the Windsor Terminal and would
be able to provide that volume regularly. Musket purportedly made
infrastructure enhancements to the Windsor Terminal in anticipation of
receiving 20,000 barrels of crude oil per day from Suncor. On April 1, 2013,
Musket and Suncor entered into an agreement (the “Agreement”) consisting of:
(1) a Master Agreement for U.S. Crude Oil Purchase, Sale, or Exchange
Transactions (the “Master Agreement”)—pursuant to which Musket agreed to

        1 Found in Canada, oil sands are a natural mix of sand, water and bitumen (oil that is too

heavy or thick to flow on its own). Oil Sands, Can. Assoc. Petroleum Producers,
https://www.capp.ca/canadian-oil-and-natural-gas/oil-sands (last visited Sept. 13, 2018).

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buy, and Suncor agreed to sell and deliver, crude oil; (2) the General Provisions
Domestic Crude Oil Agreements (the “General Provisions”); and (3) the
Physical Confirmation Transaction (the “Confirmation”), which established
the quantities, delivery dates, delivery points, and price of the crude oil Suncor
was to deliver to the Windsor Terminal. The Agreement was to run from April
1, 2013 to March 31, 2015. 2 As part of the Agreement, Suncor agreed to sell
and deliver, and Musket agreed to buy and receive, 20,000 barrels of crude oil
per day during 2014 and the first quarter 3 of 2015. New York law governs the
Agreement. 4
                                           B. Conflicts
       Musket and Suncor’s arrangement was rocky. The Agreement required
Musket to provide railcars and storage capacity to receive the crude oil
supplied by Suncor. Musket also agreed to expand the Windsor Terminal to
ensure Musket had the capacity to receive the crude oil delivered by Suncor.
       There were times when the Windsor Terminal could not receive the
committed volumes 5 of crude oil as outlined in the Agreement. Musket did not
accept a full committed volume during the second quarter of 2013, the third
quarter of 2013, the fourth quarter of 2013, in 2014, or the first quarter of 2015.
Around July 2014, Suncor suffered an interruption 6 as defined in the

       2   This period is referred to as the “Term” of the Agreement.
       3   A “quarter” as it is used in this context is three months in a calendar year.
      4 The parties agree New York law governs the Agreement and Section M of the Master

Agreement states as much.
       5“Committed volumes” are the number of barrels per day (“bpd”) to be delivered by Suncor
during the specified “period of commitment” under the terms of the Agreement.
       6   Under the terms of the Agreement, “Interruption” means:
       [I]n respect of a Party or a connection carrier: (i) any shut down, turnaround,
       breakdown, repairs, maintenance, construction change in operations or
       operational issues relating to equipment, machinery, facilities, pipelines or plants;
       (ii), governmental regulations or orders; that may directly or indirectly affect the
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Agreement. 7 The interruption was related to the Williams Overland Pass NGL
pipeline (the “NGL Pipeline”). The NGL Pipeline was an essential part of the
production of crude oil that Suncor needed to purchase in order to supply
Musket’s Windsor Terminal. Following the interruption, the wells that
produced the crude oil Suncor sold to Musket at the Windsor Terminal were
either slowed down or shut for some time. The interruption hampered Suncor’s
ability to deliver Musket crude oil in accordance with the Agreement. Suncor’s
oil supply was negatively affected by the interruption until November 2014.
          Beginning in the spring of 2014, Suncor representatives made
reassurances to Musket that Suncor had the capacity to meet the committed
volumes 8 under the Agreement and would deliver those volumes to the
Windsor Terminal. Those reassurances occurred throughout the spring,
summer, and fall of 2014. 9
          Suncor could not meet the committed volumes. As a result, the parties
modified the volumes Suncor was to deliver to Musket. Instead of committed

          ability of a Party to fulfill its obligations under this Agreement in whole or in part,
          or to apportion their facilities or acceptance and/or delivery of crude oil.
          7   The Agreement contains an interruption provision, found in the Confirmation, which
states:
          The Parties acknowledge and agree that in the event of any Interruption or Force
          Majeure circumstance (as defined in the Master Agreement) lasting longer than
          thirty (30) days: (i) the applicable Committed Volume of Product to be delivered
          will be reduced on a pro rata basis; and (ii) any payment hereunder not already
          due and payable by the Buyer will be excused or proportionately reduced, as
          appropriate, for so long as the party’s performance is so excused; provided that, for
          greater clarity, in the event of any Interruption or Force Majeure circumstance
          lasting for a period of less than thirty (30) days, Buyer shall continue to make
          payment for the Product for each day of the Interruption or Force Majeure
          circumstance up to thirty (30) days.
          8   For the relevant period, the committed volumes were 20,000 barrels per day.
       9 Musket alleges the reassurances occurred on March 5, 2014; March 14, 2014; June 27,

2014; July 7, 2014; September 4, 2014; September 9, 2014; September 18, 2014; and October 1,
2014.

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volumes of 20,000 barrels of crude oil per day as outlined in the Agreement,
the parties agreed that Suncor would deliver nominated volumes of 18,000
barrels per day in August 2014, 16,000 barrels per day in September 2014,
16,000 barrels per day in October 2014, and 15,000 barrels per day in
November 2014. Suncor failed to deliver the nominated volumes.
      Also during the spring of 2014, Suncor engaged Musket with discussions
about, among other things, an extension of the Master Agreement and
presented Musket with pipeline infrastructure plans that would facilitate
Suncor’s providing an increased crude oil supply to the Windsor Terminal.
Suncor proposed building pipeline infrastructure connecting to the Windsor
Terminal. Musket contends Suncor’s proposals prevented Musket from
exploring alternate crude oil suppliers. According to Musket, Suncor demanded
confidentiality and indicated that any discussion with a third-party crude oil
supplier would preclude the parties from establishing a long-term
arrangement.
      Musket asserts that Suncor used the contract extension and pipeline
connection discussions to distract Musket from collecting on Suncor’s payment
obligations under Alternative #2 10 of the Confirmation. Suncor agreed to pay
Musket $328,716 for its failure to deliver nominated volumes in August 2014—
a discount on the $1.4 million Suncor was obligated to pay under the
Agreement. Subsequently, Suncor failed to deliver nominated volumes in
September 2014, and requested the opportunity to combine the August 2014
payment with the September 2014 payment at a discount. Seeking to maintain
a relationship with Suncor, Musket agreed to the discounts. Musket contends
that reliance on the infrastructure plans and the positive commercial impact
those plans could produce, as well as Suncor’s request to be the exclusive crude

      10   See infra Section III.B.2 for definition.

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oil supplier for the Windsor Terminal, left Musket without sufficient crude oil
to operate the Windsor Terminal efficiently. Musket alleges Suncor never
intended to pursue a long-term extension of the Master Agreement, a pipeline
connection, or the infrastructure improvement plan that Suncor presented to
Musket.
                           C. Procedural History
      In January 2015, Musket filed a lawsuit alleging Suncor breached the
Agreement by failing to deliver the agreed upon quantities of crude oil. Suncor
answered the complaint and asserted counterclaims against Musket alleging
breach of contract for failure to comply with the terms of the Agreement and
failure to purchase and receive the agreed upon quantities of crude oil. Musket
amended the complaint two more times. Musket expanded its original breach
of contract claim into three parts: (1) breach of contract for failure to deliver
crude oil; (2) breach of contract for failure to comply with compensation
provisions; and (3) breach of contract for failure to comply with confidentiality
provisions. Musket also added claims for fraud, fraudulent inducement, breach
of the implied covenant of good faith and fair dealing, and punitive damages.
      Suncor’s counterclaims against Musket allege breach of contract for
Musket’s failure to purchase or receive the committed volumes of crude oil
based upon: (1) Musket’s failure to provide sufficient railcars; (2) Musket’s
failure to ensure the Windsor Terminal could receive the committed volumes
of crude oil delivered by Suncor throughout the term of the Agreement; and (3)
damages available for the alleged breaches under § S.
      Suncor moved to dismiss Musket’s claims for fraud, fraudulent
inducement, breach of contract for failure to comply with compensation
provisions, breach of the implied covenant of good faith and fair dealing, and
punitive damages, pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure. The district court denied Suncor’s motion regarding Musket’s
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breach of contract claim for failure to comply with the compensation provisions,
but granted the motion on the other claims. The fraud claims were the only
grounds upon which Musket could claim punitive damages. Accordingly, the
district court dismissed Musket’s claim for punitive damages.
       Following the district court’s partial grant of Suncor’s motion to dismiss,
only Musket’s breach of contract claims remained against Suncor. After
discovery closed, Suncor moved for summary judgment on the three breach of
contract claims. The district court granted summary judgment and dismissed
the breach of contract claims for failure to deliver crude oil and failure to
comply with the compensation provisions, but denied summary judgment on
the claim for failure to comply with the confidentiality provisions.
       Musket also moved for summary judgment on Suncor’s counterclaims.
The district court granted summary judgment and dismissed all of Suncor’s
counterclaims.
       After the district court’s rulings on the respective motions for summary
judgment, Musket’s breach of contract claim for failure to comply with the
confidentiality provisions was the only remaining claim in the case. The parties
filed a joint stipulation of dismissal of the claim, which the district court
granted. This appeal followed. 11
                             II. STANDARDS OF REVIEW
                              A. Failure to State a Claim
       “We review de novo a district court’s grant of a Rule 12(b)(6) motion,
‘accepting all well-pleaded facts as true and viewing those facts in the light
most favorable to the plaintiff.’” Greene v. Greenwood Pub. Sch. Dist., 890 F.3d
240, 242 (5th Cir. 2018) (quoting SGK Props., L.L.C. v. U.S. Bank Nat’l Ass’n,

        11 The district court exercised subject matter jurisdiction over this case based on federal

diversity jurisdiction under 28 U.S.C. § 1332. This court has jurisdiction over this appeal pursuant
to 28 U.S.C. § 1291.

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881 F.3d 933, 943 (5th Cir. 2018)). A Rule 12(b)(6) motion may be granted, and
the claims dismissed, if a plaintiff fails to allege any set of facts to support the
claim that establishes the basis for relief. U.S. ex rel. Willard v. Humana
Health Plan of Texas Inc., 336 F.3d 375, 379 (5th Cir. 2003). However, neither
conclusory allegations nor “unwarranted deductions of fact,” prevent a motion
to dismiss from being granted. Id. (quoting Guidry v. Bank of LaPlace, 954 F.2d
278, 281 (5th Cir. 1992)).
                        B. Dismissal Under Rule 9(b)
      Rule 9(b) of the Federal Rules of Civil Procedure requires that a plaintiff
state an alleged fraud with particularity. Fed. R. Civ. P. 9(b). “A dismissal for
failure to plead fraud with particularity under Rule 9(b) is treated as a
dismissal for failure to state a claim under Rule 12(b)(6).” U.S. ex rel.
Stephenson v. Archer W. Contractors, L.L.C., 548 F. App’x 135, 138 (5th Cir.
2013) (citing United States ex rel. Thompson v. Columbia/HCA Healthcare
Corp., 125 F.3d 899, 901 (5th Cir. 1997)). Rule 9(b) requires that a plaintiff
state the who, what, when, where, and how of the alleged fraud. Id. at 139.
“The frequently stated, judicially-created standard for a sufficient fraud
complaint . . . instructs a plaintiff to plead the time, place and contents of the
false representation, as well as the identity of the person making the
misrepresentation and what that person obtained thereby.” United States ex
rel. Grubbs v. Kanneganti, 565 F.3d 180, 186 (5th Cir. 2009) (internal quotation
marks and alteration omitted).
                             C. Summary Judgment
      We review a district court’s grant of summary judgment de novo,
applying the same standards as the district court. Ezell v. Kan. City S. Ry. Co.,
866 F.3d 294, 297 (5th Cir. 2017). Summary judgment is appropriate only “if
the movant shows that there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a);
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see also Tolan v. Cotton, 134 S. Ct. 1861, 1866 (2014) (per curiam). A dispute
is “genuine” when a reasonable trier of fact, viewing all of the record evidence,
could rationally find in favor of the nonmoving party. Westfall v. Luna, 903
F.3d 534, 546 (5th Cir. 2018) (citation omitted). And a fact is “material” if,
under the applicable substantive law, “its resolution could affect the outcome
of the action.” Sierra Club, Inc. v. Sandy Creek Energy Assocs., L.P., 627 F.3d
134, 138 (5th Cir. 2010) (citation omitted).
      We must neither weigh the evidence nor evaluate the credibility of
witnesses. Boudreaux v. Swift Transp. Co., 402 F.3d 536, 540 (5th Cir. 2005).
We construe the evidence in the light most favorable to the nonmoving party
and draw all reasonable inferences in that party’s favor. R & L Inv. Prop., LLC
v. Hamm, 715 F.3d 145, 149 (5th Cir. 2013). But only where both parties have
submitted evidence of contradictory facts; we cannot assume, in the absence of
proof, that the nonmoving party could or would prove the necessary facts.
McCarty v. Hillstone Rest. Grp., Inc., 864 F.3d 354, 358 (5th Cir. 2017); see also
Scott v. Harris, 550 U.S. 372, 380 (2007) (“When opposing parties tell two
different stories, one of which is blatantly contradicted by the record, so that
no reasonable jury could believe it, a court should not adopt that version of the
facts for purposes of ruling on a motion for summary judgment.”).
      Finally, “[t]he proper interpretation of a contract is a legal determination
that is reviewed de novo.” ExxonMobil Corp. v. Elec. Reliability Servs., Inc., 868
F.3d 408, 415 (5th Cir. 2017).

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                                    III. DISCUSSION
                      A. Dismissal of Musket’s Fraud Claims
       Musket appeals the district court’s dismissal of its fraud claims. 12 The
district court analyzed Musket’s claims under two theories of the alleged fraud.
       First, the district court evaluated Musket’s allegation that Suncor
intentionally misrepresented its capacity to produce and deliver nominated
volumes to the Windsor Terminal. The district court dismissed this fraud
claim, finding that the claim concerns the nature of the parties’ obligations
under the Agreement—Suncor agreed to deliver nominated volumes of crude
oil to the Windsor Terminal, and Musket agreed to accept the deliveries from
Suncor. The district court concluded none of the alleged misrepresentations
forming the basis of the claim are “collateral or extraneous” to the Agreement
as required under New York law.
       Second, the district court evaluated Musket’s allegation that Suncor
intentionally misrepresented its plans to extend the arrangement with Musket
and build pipeline infrastructure to improve the efficiency of deliveries to the
Windsor Terminal. The district court concluded Musket failed to plead the
claim with particularity as required by Federal Rule of Civil Procedure 9(b).
The district court noted the extension conversations began in the spring of
2014 and Suncor requested discounts on payments due for August and
September 2014. The district court further noted Musket alleged the discounts
were offered in reliance on Suncor’s alleged misrepresentations. The district
court determined that Musket states the “who, what, where, when, and how”
of a proposed infrastructure plan, and the “who, what, and when” of Suncor’s
request for a discount on Suncor’s payment obligations under the Agreement.

        12 Musket does not appeal the dismissal of the claims for fraudulent inducement and

breach of the implied covenant of good faith and fair dealing. Therefore, we will not evaluate the
district court’s conclusions regarding those claims.

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The district court concluded, however, Musket failed to plead “who, when,
where, and how, a conversation, or exchange, took place that would link [the]
two separate events together that would indicate fraud by Suncor.” The district
court dismissed the second fraud claim pursuant to Rule 9(b) explaining,
“[w]ithout satisfying the additional pleading requirements of Rule 9(b) it is not
plausible to conclude that Suncor knew in the spring of 2014 that it would incur
additional obligations under the Master Agreement in August and September
of that year and therefore needed to create a ‘fraudulent scheme’ in order to
obtain those discounts.”
      We agree with the district court and conclude that both of Musket’s fraud
theories fail to state a plausible claim for relief.
      Musket argues the district court erred in dismissing the fraud-based
claims as duplicative of Musket’s breach of contract claim because the fraud-
based claims are separate and distinct from its contract claim, and were
pleaded with sufficient particularity. Musket cites several New York state
cases and relies on its contentions that, after the Agreement was executed,
Suncor: (1) misrepresented its ability to meet the delivery obligations; (2)
promised it would take significant, specific steps to increase supply; (3)
misrepresented its plans for pipeline infrastructure improvement; and (4)
misrepresented its objective of being the exclusive crude oil supplier for the
Windsor Terminal beyond the term of the Agreement.
      To establish a claim for fraud under New York law, a plaintiff must
demonstrate the defendant: (1) knowingly (2) misrepresented a material fact
(3) to induce reliance on the fact, and (4) there was justifiable reliance on the
fact, from which (5) damages resulted. Dube-Forman v. D’Agostino, 877
N.Y.S.2d 740, 741 (2009). However, “[a] cause of action to recover damages for
fraud does not lie when the only fraud charged relates to a breach of contract.”
Marlowe v. Ferrari of Long Island, Inc., 876 N.Y.S.2d 165, 165 (2009). Further,
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“a claim for fraud will not be recognized where it is based solely upon the
failure to perform the promises of future acts which constitute the contractual
obligations themselves.” Microtel Franchise & Dev. Corp. v. Country Inn Hotel,
923 F. Supp. 415, 417 (W.D.N.Y. 1996) (citing Chase v. Columbia Nat’l Corp.,
832 F. Supp. 654, 660 (S.D.N.Y. 1993)).
      Even if a plaintiff sufficiently pleads a fraud claim under New York law,
the claim is still subject to dismissal if it fails to meet the particularity
requirement of Rule 9(b). “State law fraud claims are subject to the heightened
pleading requirements of Rule 9(b).” Sullivan v. Leor Energy, LLC, 600 F.3d
542, 550–51 (5th Cir. 2010) (citing Dorsey v. Portfolio Equities, Inc., 540 F.3d
333, 339 (5th Cir. 2008)); see also Williams v. WMX Technologies, Inc., 112 F.3d
175, 177 (5th Cir. 1997) (“We see no principled reason why the state claims of
fraud should escape the pleading requirements of the federal rules . . . .”). The
who, what, when, where, and how of the alleged fraudulent scheme must be
pleaded in the complaint.
                1. Fraud Related to the Failure to Deliver
      Musket contends the fraud claim related to Suncor’s alleged
misrepresentations about its capacity to deliver the nominated volumes and
its efforts to increase the supply of crude oil to the Windsor Terminal are
separate and distinct from Musket’s breach of contract claims. These
allegations, as articulated in Musket’s second amended complaint, state:
“Suncor [represented it had] the capacity to meet nominated volumes and
Suncor intended to deliver such volumes,” and that “Suncor would increase its
volumes ‘over the coming weeks’ . . . in order to satisfy the nominated volumes,”
along with other similar reassurances.
      The district court correctly concluded those allegedly fraudulent
representations “concern[] the essence of the parties’ obligations under the
Master Agreement – Suncor’s promise to deliver nominated volumes of crude
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                                  No. 17-20388
oil and Musket’s obligation to accept the deliveries.” The terms, rights, and
obligations outlined throughout the Agreement were designed to initiate and
facilitate Suncor’s delivery of crude oil to the Windsor Terminal, and this fraud
theory is based on representations in furtherance of the same goal.
      Musket cites Kosowsky v. Willard Mountain, Inc., 934 N.Y.S.2d 545, 548
(2011), as that court determined that a fraud claim could proceed because the
“Plaintiffs [did] not merely allege that defendants falsely represented their
intent” with respect to their contractual obligations, but “repeatedly
misrepresented or concealed existing facts.” Id. However, Kosowsky also states
a “misrepresentation premised directly on the same actions giving rise to a
breach of contract does not give rise to a separate cause of action for fraud.” Id.
Kosowsky involved fraud claims against a defendant who was not a party to
the original contract in the case, and allegations that the defendant had
intentionally paid plaintiff less than what was owed under the contract and
falsified his companies’ annual income reports to correspond with the amounts
he had paid. Id. In stark contrast, the present case involves alleged
misrepresentations that pertain directly to the purpose and nature of the
parties’ Agreement. Kosowsky is unpersuasive. The other cases cited by
Musket are also distinguishable and unpersuasive.
      The district court correctly dismissed Musket’s fraud claim related to
Suncor’s failure to deliver nominated volumes because the claim is based on
promises to do future acts in furtherance of Suncor’s obligations under the
Agreement. See Microtel, 923 F. Supp. at 417. It is unnecessary to consider
whether Musket pleaded this claim with sufficient particularity under Rule
9(b) because the fraud allegations fail to state a claim as a matter of law.
 2. Fraudulent Scheme to Avoid Compliance with the Payment Terms
                               of the Agreement
      Musket argues the district court erred in concluding Musket’s fraud claim
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that Suncor concocted a fraudulent scheme, to avoid compliance with its payment
obligations, was not pleaded with sufficient particularity. The district court
described the allegations forming the basis of the second fraud claim as: (1)
“Musket states the conversations took place ‘in the spring of 2014’ during which
Suncor approached Musket about a contract extension and a proposed pipeline
plan”; and (2) “Suncor requested a discount on amounts due under the Master
Agreement for August and September 2014.” The district court further noted,
“Musket asserts that ‘these discounts were offered in reliance on Suncor’s
misrepresentations regarding the [future] contract extension and pipeline
connection.’” The district court dismissed the second fraud claim after concluding
it was not plausible to conclude that Suncor knew in the spring of 2014 that it
would incur additional obligations under the Master Agreement in August and
September of that year, and therefore needed to create a fraudulent scheme to
obtain discounts.
       The district court’s reasoning is sound. Especially when one considers that
Suncor suffered an interruption in July of 2014. Musket attempts to combine its
fraud allegations into one theory, listing the details of the fraud allegations point
by point. Viewing the alleged facts as true, there is nothing that logically connects
the spring 2014 discussions and reassurances to the fall 2014 requests for
payment discounts. Musket’s argument is more aptly considered as support for a
breach of contract theory, not an allegation of a fraudulent scheme existing before
the interruption and continuing until the fall of 2014. Musket fails to state the
second fraud claim with particularity. 13

       13We affirm the district court’s grant of summary judgment on Musket’s claim for punitive
damages because both fraud claims were properly dismissed. Musket cannot recover punitive
damages for the breach of contract claims. See Rocanova v. Equitable Life Assurance Soc’y of the
U.S., 83 N.Y.2d 603, 613 (N.Y. 1994) (holding “[p]unitive damages are not recoverable for an
ordinary breach of contract”).

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    B. Summary Judgment on Musket’s Breach of Contract Claims
       Musket appeals the district court’s grant of summary judgment on the
two breach of contract claims against Suncor. 14 The district court based its
conclusions on its interpretation of the Agreement, according to New York
law—which governs the contract terms.
       Under New York law, when contract language is clear and unambiguous,
contracts should be interpreted based on the plain, non-technical meaning of
the language of the agreement itself. Lopez v. Fernandito’s Antique, Ltd., 760
N.Y.S.2d 140, 141 (2003). Courts must not consider extrinsic evidence to
determine the parties’ intentions when contract language is clear. Guggenheim
Corp. Funding, LLC v. Access.1 Commc’ns Corp.-NY, No. 602376/08, 2009 WL
5345767, at *9 (N.Y. Sup. Ct. 2009). “The rules of construction of contracts
require [courts] to adopt an interpretation which gives meaning to every
provision of a contract or, in the negative, no provision of a contract should be
left without force and effect.” Black Bull Contracting, LLC v. Indian Harbor
Ins. Co., 23 N.Y.S.3d 59, 63 (N.Y. App. Div. 2016) (citations omitted). “[T]he
entire contract must be reviewed and ‘[p]articular words should be considered,
not as if isolated from the context, but in the light of the obligation as a whole
and the intention of the parties as manifested thereby. Form should not prevail
over substance and a sensible meaning of words should be sought.’” Givati v.
Air Techniques, Inc., 960 N.Y.S.2d 196, 198 (2013) (citations omitted). Where
a court can determine the parties’ intent from the face of the contract,
“interpretation is a matter of law and the case is ripe for summary judgment.”
Guggenheim Corp., 2009 WL 5345767, at *9 (quoting Am. Exp. Bank Ltd. v.
Uniroyal, Inc., 562 N.Y.S.2d 613, 614 (1990)).

       14 The district court also granted summary judgement in favor of Suncor on Musket’s claim
for attorneys’ fees, which Musket does not appeal.

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      For the reasons that follow, we conclude that the district court correctly
granted summary judgment on both breach of contract claims.
   1. Whether Musket Can Recover Damages for Suncor’s Failure to
                                        Deliver
      The district court granted Suncor summary judgment on Musket’s
breach of contract claim for failure to deliver because the district court
concluded two contract provisions within § S of the Master Agreement preclude
Musket from establishing or recovering damages for the claim. The district
court read § S(b) to require Musket to cover—in other words, seek alternative
sources of crude oil—when Suncor failed to deliver crude oil. The district court
noted that Musket admitted it did not purchase crude oil from other suppliers.
The district court rejected Musket’s argument that § S(b) does not govern the
issue because § S(b) conflicts with the exclusivity provision of the
Confirmation, which designates Suncor as the lone supplier of crude oil to the
Windsor Terminal during the full term of the Agreement. The district court
added, (1) § S(b) does not conflict with the exclusivity provision, and (2) when
Suncor failed to deliver crude oil and none of the other provisions of the
Confirmation applied, § S(b) applied. The district court concluded Musket was
not entitled to damages under § S(b) because Musket did not cover for the
failure to deliver.
      As additional grounds to support the grant of summary judgment, the
district court determined that the measures of damages Musket sought in
connection with the claim are barred by § S(a) of the Master Agreement. The
district court found that Musket seeks lost profits and other consequential
damages. Musket argued § S(a) conflicted with the exclusivity provision in the
Confirmation,    but   the   district    court    considered   Musket’s   argument
unpersuasive. The district court read § S(a) as a bar to either party seeking

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                                  No. 17-20388
lost profits or other consequential damages and granted summary judgment in
favor of Suncor.
      We conclude that the district court properly granted summary judgment
on Musket’s claim for failure to deliver because § S(a) proscribes the recovery
Musket seeks. Musket contends the district court erroneously found that §§
S(a) and S(b) bar Musket from recovering damages for the breach of contract
claim for failure to deliver. The district court rejected Musket’s argument that
the exclusivity clause in the Confirmation renders the entire § S ineffectual
because §§ S(b) and S(c) require the parties to cover for failed oil deliveries.
Section S(a) does not have a cover requirement, and Musket’s only argument
against the applicability of § S(a) is the assertion that other subsections of § S
conflict with the exclusivity provision.
      Section S(a) bars recovery for lost profits and other consequential
damages. “It is settled that a contractual provision which limits damages will
be enforced unless a special relationship exists between the parties, or a
statute or public policy imposes liability despite the restrictions set forth in the
contract.” Duane Reade v. 405 Lexington, L.L.C., 800 N.Y.S.2d 664, 666 (2005).
In the commercial setting, where the language of the damages limitation is
clear, courts are not required to “resort to a magnifying glass and lexicon”
where no governing statute and no special relationship between the parties
would warrant relieving the plaintiff of the contract. Florence v. Merchants
Cent. Alarm Co., 51 N.Y.2d 793, 795 (1980).
      Section S begins, “Except as expressly set forth in this Agreement,” and
S(a) states:
      under no circumstances will either Party be liable to or required to
      compensate the other Party, in contract, tort, negligence or
      otherwise, for any loss of profits, exemplary incidental, special,
      contingent, incidental, punitive, indirect or consequential loss or

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                                       No. 17-20388
       damages of any kind, and the Parties waive their rights thereto
       including any waiver required under any statutory provision.
(emphasis added). “It is well settled that a breach of contract is compensable
by contract damages alone.” Metro. Life Ins. Co. v. Noble Lowndes Int’l, Inc.,
600 N.Y.S.2d 212, 214 (1993), aff’d, 84 N.Y.2d 430 (1994). Under New York
law, a plaintiff may plead two types of damages in a contract case: (1) general
damages and (2) consequential damages. PNC Bank, Nat. Ass’n v. Wolters
Kluwer Fin. Servs., Inc., 73 F. Supp. 3d 358, 370 (S.D.N.Y. 2014). Musket does
not dispute that it seeks to recover damages that are barred by § S(a) for the
failure to deliver claim. Further, § S(a) is not in conflict with any other section
of the Agreement, and Musket has not presented such an argument.

       It would be improper for the court to simply ignore § S(a) as Musket
suggests. Musket and Suncor do not have a special relationship, nor is there a
statute that governs damages in this context. In this contractual dispute
involving two sophisticated commercial actors, we interpret § S(a) to have full
force and effect, barring Musket’s attempt to recover lost profits and
consequential damages for a failure to deliver. 15 The practical effect of
enforcing § S(a) as it is written is to bar recovery of lost profits and
consequential damages for any of the present breach of contract claims. 16

       15 Musket makes several arguments regarding the applicability of § S(b), which is
arguably in conflict with the exclusivity provision in the Confirmation. While we disagree with
Musket’s position, we do not address those arguments because § S(a) is not in conflict with any
other provision of the Agreement and should be read to have full force and effect under New York
law.
       16We note that Musket has neither sought nor presented any arguments regarding
general damages.
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                                    No. 17-20388
  2. Whether Musket Can Invoke Alternative #2 to Recover Damages
                                    from Suncor
      The district court granted Suncor summary judgment on Musket’s
breach of contract claims for failure to comply with compensation provisions
Alternative #1 and Alternative #2 of the Agreement. Those provisions describe
specific conditions under which Suncor would compensate Musket for failure
to deliver nominated volumes of crude oil set forth in the Agreement. Musket
appeals only the district court’s grant of summary judgment on Musket’s claim
that Suncor failed to comply with Alternative #2. 17 Reading the language of
Alternative #2 and the Agreement as a whole, the district court determined
there were two conditions precedent before Alternative #2 could be applied.
The district court found that Musket and Suncor must have (1) exhausted
reasonable commercial efforts, and (2) still been unable to identify a profitable
market for a given committed volume. The decision to grant summary
judgment was based on the district court’s conclusion that Musket failed to
provide sufficient evidence that the parties were unable to identify a profitable
market.
      The district court rejected Musket’s argument that the court should have
presumed the parties were unable to identify a profitable market on given
committed volumes or Suncor would have delivered the entire committed
volumes to Musket. The district court found Musket’s position unpersuasive
because, while there must have been a market-based reason for the parties’
decision to agree on the delivery of fewer barrels than the committed volume
stated in the Agreement each month, Musket must provide sufficient evidence
indicating there is an issue of material fact that both parties exhausted

      17 Musket does not appeal the grant of summary judgment on the claim for failure to
comply with Alternative #1.

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reasonable commercial efforts and were unable to identify a profitable market
for a specific committed volume. As evidence that both conditions precedent
were met, Musket provided statements from a Musket managing director and
vice president, who testified that the parties could not locate a profitable
market for the full committed volumes for almost every month of the
Agreement, and could not identify a profitable market for the committed
volumes Suncor did not deliver. The district court found those statements
conclusory and granted summary judgment in Suncor’s favor.
       We agree with the district court and conclude that Musket has failed to
provide evidence that the parties met the conditions precedent to create
obligations under Alternative #2. Alternative #2 of the Confirmation states in
relevant part:
       Alternative #2: Procedure if Parties are unable to identify a
       Profitable Market
       If after exhausting reasonable commercial efforts the Parties are
       unable to identify a profitable market for a given Committed
       Volume then this Alternative #2 applies:
       Seller shall:
       (i) be relieved of its obligation to physically deliver the applicable
       Committed Volume to Buyer; and
       (ii) instead of physical settlement of the applicable Committed
       Volume, there will be deemed delivery to Buyer of the applicable
       Committed Volume, and Seller will pay Buyer $2.50 per barrel
       associated with the said Committed Volume. The foregoing forms
       the basis for the take or pay scenario insofar as Seller is committed
       to delivering a Committed Volume pursuant to this Transaction.
(emphasis added). 18 Based on a plain reading of the provision, to trigger
Alternative #2, the parties must have exhausted reasonable commercial efforts

        18 We note that Musket seeks liquidated damages for its failure to comply claim. The

Agreement does not expressly bar recovery for liquidated damages. Moreover, § S of the Master
Agreement creates exceptions to § S(a)’s general bar on consequential damages for those
“expressly set forth in this Agreement.” Therefore, liquidated damages are recoverable under the
Agreement. “Whether a contractual provision represents an enforceable liquidated damages
provision or an unenforceable penalty is a question of law.” United Title Agency, LLC v. Surfside-
                                               20
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                                         No. 17-20388
and still failed to identify a profitable market for a given Committed Volume.
Musket asserts that the district court “added” the reasonable commercial
efforts requirement. Musket’s assertion is unpersuasive because the plain “if”
and “then” language of the provision creates two conditions precedent that
must be met before Alternative #2 can apply. See Oppenheimer & Co. v.
Oppenheim, Appel, Dixon & Co., 86 N.Y.2d 685, 691 (1995) (“[T]he . . .
agreement unambiguously establishes an express condition precedent rather
than a promise, as the parties employed the unmistakable language of
condition (‘if,’ ‘unless and until’).”).

       Musket contends Alternative #2 is a “take or pay” scenario for Musket,
which is proof the parties did not have to work together before Alternative #2
could be invoked. In addition, Musket asserts Alternative #2 could be invoked
anytime Suncor unilaterally failed to deliver a full committed volume. Musket
essentially argues Suncor’s failure to deliver alone is proof there was no
profitable market at a given time. According to Musket, Suncor is required to
pay the Alternative #2 fees anytime it fails to deliver a full committed volume
as contemplated by the Agreement. As evidence to support its theory, Musket
relies on the testimony of its managing director and vice president, who
articulated the thinking underlying Musket’s profitable market argument. The

3 Marina, Inc., 885 N.Y.S.2d 334, 335 (2009). Parties to an agreement have the right to contract
for liquidated damages unless the clause is unconscionable or contrary to public policy. Truck
Rent-A-Ctr., Inc. v. Puritan Farms 2nd, Inc., 41 N.Y.2d 420, 423–24 (1977). Suncor has not
presented such arguments. Read liberally, Alternative #2 contemplates liquidated damages when
the provision applies. See id. (“Liquidated damages constitute the compensation which, the
parties have agreed, should be paid in order to satisfy any loss or injury flowing from a breach of
their contract.”). Although the provision does not expressly use the word damages, subsection (ii)
entitles Musket to $2.50 per barrel for Suncor’s breach of the provision. See id. (“[A] liquidated
damages provision is an estimate, made by the parties at the time they enter into their agreement,
of the extent of the injury that would be sustained as a result of breach of the agreement.”).
Because we conclude that Musket did not meet the conditions precedent to trigger payment under
Alternative #2, we do not address whether Musket could be entitled to liquidated damages.

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district court noted that Musket submitted some evidence that Suncor was
unable to identify a profitable market for deliveries, but not evidence that both
parties failed to identify a profitable market after exercising reasonable
commercial efforts.
       We also disagree with Musket’s presumption theory. There must be
evidence indicating there is an issue of material fact that both parties
exhausted commercially reasonable efforts and were still unable to identify a
profitable market before the court could apply Alternative #2. Musket has not
provided such evidence, and its reliance on conclusory statements is
insufficient.
       Accordingly, we affirm the district court’s grant of summary judgment
on Musket’s breach of contract claim for failure to comply with the
compensation provisions. 19
          C. Summary Judgment on Suncor’s Breach of Contract
                                      Counterclaims
       Suncor appeals the district court’s grant of summary judgment on its
breach of contract counterclaims against Musket for failure to purchase and
receive the nominated volumes of crude oil. 20 The district court granted

        19 In addition to granting summary judgment on Musket’s breach of contract claims on the

grounds previously stated, the district court determined, in the alternative, Suncor was entitled
to partial summary judgment on the breach of contract claims related to delivery deficiencies
because Musket failed to provide written notice of the deficiency claims as § S of the Master
Agreement requires. On appeal, Musket argues, in part, it consistently provided Suncor with
updates on the volumes of barrels of crude oil delivered to Musket, which should have made
Suncor aware it was not complying with the Master Agreement. While we agree with the
conclusion reached by the district court—that notice of deficiencies is not equivalent to notice of
claims against Suncor for those deficiencies—we need not elaborate on this alternative ground.
The grant of summary judgment on Musket’s breach of contract claims was proper.
       20 The district court granted summary judgment in favor of Musket on all of Suncor’s

counterclaims. The district court did not address Suncor’s request for attorneys’ fees and Suncor
makes no argument regarding the request for attorneys’ fees on cross-appeal.

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summary judgment regarding Suncor’s counterclaims on three separate
grounds.
       We conclude the district court was correct in granting summary
judgment on Suncor’s counterclaims against Musket, albeit for reasons that
differ from the district court regarding one of the grounds for dismissal.
    1. Whether Suncor Can Recover Damages for Musket’s Failure to
            Provide Sufficient Railcars at the Windsor Terminal
       First, the district court determined paragraph (ii) of the additional
provisions section of the Confirmation applied to Suncor’s breach of contract
counterclaim for Musket’s failure to provide sufficient railcars, and found the
claim required proof of a mutual agreement on the Alternative Buyer/Delivery
Point as defined in the Confirmation. The district court concluded Suncor failed
to raise a genuine issue of material fact to establish the existence of such a
mutual agreement and granted Musket summary judgment on the claim.
       We agree. Paragraph (ii) of the additional provisions states:
       If Buyer’s failure to provide rail cars, as averaged over three (3)
       consecutive months, unreasonably interferes with Seller’s ability to
       ratably deliver Product to the Windsor Terminal causing Seller to
       deliver to Alternate Buyer/Delivery Point, then Buyer agrees to pay
       Seller $1.50 for each barrel associated with the said three (3)
       month period that Seller delivered to such Alternate
       Buyer/Delivery Point.
(emphasis added). 21 The district court noted that the court had to determine
whether the “Alternate Buyer/Delivery Point” required mutual agreement
before the court could consider any evidence of such an agreement. Suncor

       21  As an initial matter, this provision contemplates liquidated damages when paragraph
(ii) applies. See supra note 17; see also Truck Rent-A-Ctr., 41 N.Y.2d at 423–24 (“Liquidated
damages constitute the compensation which, the parties have agreed, should be paid in order to
satisfy any loss or injury flowing from a breach of their contract.”). We conclude that Suncor did
not meet the conditions precedent to trigger payment under paragraph (ii). Therefore, we do not
address whether Suncor could be entitled to liquidated damages.

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argues that the district court’s determination was based on an incorrect
interpretation of the Agreement, and nevertheless, Suncor presented more
than enough evidence to establish a genuine issue of fact that the parties did
reach a mutual agreement for delivery to at least one of three alternative buyer
points. Suncor’s underlying contention is that the district court applied an
incorrect definition to “Alternative Buyer/Delivery Point.”

      The definition of “Alternate Buyer/Delivery Point” is unambiguous when
one considers the Agreement in its entirety. There is no definitions section in
the Confirmation, however, “Alternative Buyer/Delivery Point” appears in
paragraph (ii) and in Alternative #1. The term is capitalized and in bold the
first time it appears, in Alternative #1. The provision states:

      Seller is relieved of its obligation to sell such applicable Committed
      Volume to Buyer and may sell the applicable Committed Volume
      directly to a third party and at a mutually agreed upon alternate
      delivery point (“Alternate Buyer/Delivery Point”); provided
      that, Seller will reimburse Buyer for all of its direct cost associated
      with Buyer’s operation of the Windsor Terminal, including freight,
      terminal fees, rail car leases at the rate of $1,200.00 (per rail car
      per month) plus a $2.75 per barrel fee.
In the district court, Musket argued that the definition is “a third party and at
a mutually agreed upon alternate delivery point.” Suncor argued that the
“mutually agreed upon” portion of that phrase does not make sense—basically
asserting that “Alternate Buyer/Delivery Point” means “a different buyer and
delivery point.” Considering how terms are defined throughout the Agreement,
Suncor’s definition is incorrect.

      When considering whether a contract term “is unambiguous, language
should not be read in isolation because the contract must be considered as a
whole.” NRT New York, LLC v. Harding, 16 N.Y.S.3d 255, 258 (N.Y. App. Div.
2015) (citations omitted). “If the language of the contract is susceptible of more

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                                  No. 17-20388
than one reasonable interpretation, the contract will be considered
ambiguous.” Id. The question of whether a contract—and its terms—is
unambiguous, is a question of law. Id. A court should not allow extrinsic and
parol evidence of the parties’ intent to be admitted when the contract is
unambiguous on its face. Id.

      Throughout the Agreement, important terms—such as “Term”,
“Committed Volumes,” and “Windsor Terminal”—are bold and capitalized the
first time the term appears, signaling that the terms are defined terms of the
Agreement when they first appear. The same is true of the “Alternate
Buyer/Delivery Point.” As the district court noted, if these sophisticated parties
wanted the term to have a different definition in paragraph (ii), they would
have used a different uncapitalized and nonbold term in each paragraph.

      We agree with the district court’s conclusion that, in entering the
Agreement, Suncor agreed to obtain a mutual agreement before diverting its
crude oil to another delivery point when Musket could not receive the full
shipment; as the definition of “Alternate Buyer/Delivery Point’ expressly states
in Alternative #1. We now turn to Suncor’s contention that it provided
sufficient evidence of mutual agreement to survive summary judgment.

      Suncor provides evidence that it delivered crude oil that Musket could
not receive to three alternate buyers or delivery points. Suncor directs this
court to a declaration made by its crude oil trader stating that Musket never
prohibited Suncor from unilaterally delivering barrels of crude oil to the
alternate points when the Windsor Terminal could not take the barrels. Suncor
also presents strings of emails—transmitted during December 2013; February
2014; April 2014; May 2014; June 2014; and February 2015—that highlight a
host of problems with capacity at the Windsor Terminal and that indicate
Musket would turn trucks away after the terminal reached capacity. The

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                                 No. 17-20388
emails also indicate that Suncor employees had internal discussions about
diverting barrels of crude oil to at least three other locations. There are also
emails that indicate at least one Musket employee knew of at least one of the
alternate delivery points used by Suncor.

      The evidence provided by Suncor does not raise an issue of material fact
as to whether there was a problem with the railcars at the Windsor Terminal
for a period of three months that caused both parties to agree on alternate
buyers at alternate delivery points during that period. At most, the evidence
indicates that such an agreement existed on at least one day for at least one
shipment. The evidence is insufficient to create a genuine issue of material fact
that an agreement existed to trigger the obligations of paragraph (ii).

      The district court was correct in granting summary judgment on the
breach of contract counterclaim for failure to provide sufficient railcars.

   2. Whether Suncor Can Recover Damages for Musket’s Failure to
                                    Receive
      Second, the district court concluded that the Agreement does not support
Suncor’s general breach of contract counterclaim seeking damages under § S.
Because Suncor seeks lost profits or consequential damages for the general
breach of contract counterclaim, we agree.
      Suncor requests “actual damages” as recovery for the breach of contract
counterclaims. However—as stated previously—under New York law, a party
may plead two types of damages in a contract case: (1) general damages and
(2) consequential damages. PNC Bank, Nat. Ass’n v. Wolters Kluwer Fin.
Servs., Inc., 73 F. Supp. 3d 358, 370 (S.D.N.Y. 2014). A party alleging breach
of contract is not required to specifically plead general damages, as those
damages directly flow from and are considered the “natural and probable”
consequence of the alleged breach. See Bi-Econ. Mkt., Inc. v. Harleysville Ins.

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Co. of New York, 10 N.Y.3d 187, 192 (2008) (“[T]he nonbreaching party may
recover general damages which are the natural and probable consequence of
the breach.”); see also Keefe v. Lee, 197 N.Y. 68, 71 (1909) (noting a plaintiff
“may recover such damages as necessarily, usually and immediately flow [from
injury], under a general allegation in the complaint that damages have been
sustained by him by reason of such injury”). Conversely, consequential
damages must be alleged. Vista Food Exch., Inc. v. BenefitMall, 31 N.Y.S.3d 9,
11 (N.Y. App. Div.), leave to appeal denied, 28 N.Y.3d 902 (2016).
       The district court determined that the Agreement does not support
Suncor’s general claim for damages outside of the provisions of paragraph (ii)
and paragraph (iii) of the Confirmation, without addressing Suncor’s failure to
specify its claim for damages. On appeal, Suncor argues that its general breach
of contract counterclaim for Musket’s alleged failure to purchase and receive
nominated volumes of crude oil is “essentially the mirror image” of Musket’s
breach of contract claim against Suncor for failure to deliver. Despite this
acknowledgment, Suncor contends § S(a) of the Master Agreement
unambiguously prevents recovery of the sought after damages for all the
breach of contract claims related to the delivery and receipt of nominated
volumes of crude oil shipments. Further, Suncor contends that it would be
inconsistent for this court to allow one of the claims to remain while affirming
the dismissal of the other. We interpret the arguments presented by Suncor as
a concession that it too is seeking lost profits and other consequential damages
for its general breach of contract counterclaim. Accordingly, we conclude that
§ S(a) bars recovery for Suncor’s breach of contract counterclaim for lost profits
and other consequential damages in this case. 22

       22 As acknowledged above, general damages are assumed to flow naturally from an
alleged breach of contract. Because neither party has presented arguments regarding general
damages related to the breach of contract claims for failure to deliver and failure to receive,
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                                        No. 17-20388
       We affirm the grant of summary judgment on Suncor’s general breach of
contract counterclaim for Musket’s failure to purchase and receive the
nominated volumes of crude oil.
    3. Whether Suncor Can Recover Damages for Musket’s Failure to
  Receive Because the Windsor Terminal Lacked Sufficient Capacity
       Finally, the district court determined that paragraph (iii) of the
additional provisions applied to the counterclaim for failure to ensure the
Windsor Terminal had sufficient capacity to receive the nominated volumes of
crude oil and found that counterclaim required proof Musket failed to use
reasonable commercial efforts in attempting to comply with its obligations
regarding the Windsor Terminal. The district court concluded Suncor failed to
present evidence Musket did not use reasonable commercial efforts and
granted summary judgment on the counterclaim in favor of Musket. 23
       For reasons that differ from the district court’s, we affirm. Suncor’s
counterclaim for Musket’s failure to maintain and expand the Windsor
Terminal seeks damages under § S in connection with Musket’s failure to
purchase and receive the committed volumes of crude oil. Therefore, the
Agreement does not support Suncor’s request for damages on that
counterclaim.
       Under the terms of the Confirmation, Suncor’s remedy for deficiencies
related to the capacity and expansion of the Windsor Terminal was contract
termination. As much is stated in the provision discussing expansion of the
terminal and the additional provisions. The district court also acknowledged

any arguments addressing general damages are waived. See Sama v. Hannigan, 669 F.3d
585, 589 n.5 (5th Cir. 2012) (noting that issues not argued on appeal are waived).
       23 The district court granted summary judgment in favor of Musket on all of Suncor’s

counterclaims. The district court did not address Suncor’s request for attorneys’ fees and Suncor
makes no argument regarding the request for attorneys’ fees on cross-appeal.

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that the Agreement granted Suncor the right to terminate the Agreement for
any reason if Musket did not meet its obligations regarding the Windsor
Terminal. Significantly, the Confirmation states that Suncor’s right to
terminate the contract would not limit “its rights and remedies” under the
Agreement.
      During the district court proceedings, Suncor described its counterclaim
related to the Windsor Terminal as a claim against Musket “for breach of the
Agreement based on Paragraph (iii) of the Additional Provisions and Musket’s
liability under § S.” Suncor further stated that “[t]hese provisions deal with
Musket’s obligation to purchase the crude oil sold by Suncor and to make the
Windsor Terminal capable of ratably receiving the agreed-upon volumes of
crude oil.” The district court interpreted Suncor’s explanation to mean that
Suncor alleged breaches of paragraph (ii) and (iii) and damages available for
the alleged breach of paragraph (iii) under § S. Later, in response to Musket’s
argument that Suncor did not have evidence that Musket failed to use
“reasonable commercial efforts” as required by paragraph (iii), Suncor argued
that its counterclaim was not limited by the “reasonable commercial efforts”
clause because the Agreement required Musket to receive the nominated
volumes and expand the Windsor Terminal to be able to receive the nominated
volumes. The district court determined that Suncor failed to show an issue of
material fact that Musket did not use reasonable commercial efforts in
ensuring the Windsor Terminal had sufficient capacity to receive the
nominated volumes of crude oil.
      The district court did not need to evaluate whether Musket used
reasonable commercial efforts to comply with paragraph (iii) because § S does
not provide the damages remedy Suncor seeks for the alleged breach. A plain
reading of the Agreement indicates that the parties did not contemplate
damages under § S for a failure to maintain or expand the Windsor Terminal.
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Section S only authorizes damages for Musket’s failure to purchase or receive
the committed volumes under § S(c). That section contains a cover
requirement—authorizing damages in an amount equal to the positive
difference between the amount Musket would have paid under the Agreement
for a non-purchased volume (referred to as “Quantity” in the Agreement) and
the amount Suncor received in covering the non-purchased volume by selling
to a third party. That amount would be the only damages that would naturally
flow from Musket’s alleged breach and Suncor has not presented that claim for
damages at any stage in this case.
      Therefore, despite the attempt to disguise its counterclaim, Suncor seeks
damages outside the scope of § S(c) as a remedy for the alleged breach of
paragraph (iii). There has been no evidence provided to indicate the
sophisticated parties in this case contemplated the damages Suncor seeks.
Since lost profits and other consequential damages are barred by § S(a), Suncor
has not presented a valid damages claim for Musket’s alleged failure to ensure
the Windsor Terminal had sufficient capacity to receive the nominated
volumes of crude oil.
      We affirm the district court’s grant of summary judgment on other
grounds.
                               IV. CONCLUSION
      For the reasons stated above, the district court’s partial grant of Suncor’s
motion to dismiss is AFFIRMED, the district court’s partial grant of Suncor’s
motion for summary judgment is AFFIRMED, and the district court’s grant of
Musket’s motion for summary judgment is AFFIRMED.

                                       30