Court Opinion

ID: 4694178
Source: CourtListenerOpinion
Date Created: 2021-06-10 00:00:41.967307+00
Date Added: 2024-06-11T08:05:27.482075
License: Public Domain

Case: 20-10663          Document: 00515893458              Page: 1       Date Filed: 06/09/2021

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

                                                                                           FILED
                                                                                        June 9, 2021
                                          No. 20-10663
                                                                                      Lyle W. Cayce
                                                                                           Clerk

   Midwestern Cattle Marketing, L.L.C.,

                                                                         Plaintiff–Appellant,

                                               versus

   Legend Bank, N.A.,

                                                                        Defendant–Appellee.

                      Appeal from the United States District Court
                          for the Northern District of Texas
                                USDC No. 4:17-CV-375

   Before Smith and Ho, Circuit Judges, and Barker, District Judge.*
   J. Campbell Barker, District Judge.
          This case returns to us after our decision affirming in part and
   reversing and remanding in part. Midwestern Cattle Mktg., L.L.C. v. Legend
   Bank, N.A., 800 F. App’x 239, 251 (5th Cir. 2020). We assume familiarity
   with the description of the case there. Id. at 241–44. On remand, the district
   court conducted further proceedings and entered summary judgment against
   Midwestern. Midwestern now appeals, asserting two errors. We affirm.

          *
              U.S. District Judge for the Eastern District of Texas, sitting by designation.
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                                      No. 20-10663

           A summary judgment is reviewed de novo, Petro Harvester Operating
   Co. v. Keith, 954 F.3d 686, 691 (5th Cir. 2020), while a district court’s
   invocation of equitable defenses, like unclean hands, is reviewed for abuse of
   discretion, Midwestern Cattle Mktg., 800 F. App’x at 245. See also In re
   Coastal Plains, Inc., 179 F.3d 197, 205 (5th Cir. 1999) (recognizing the abuse-
   of-discretion standard of review for other equitable doctrines).
          1. Midwestern first asserts error in the district court’s conclusion that
   our decision “remanded only plaintiff’s claim for money had and received
   and not a separate unjust enrichment claim (as [Midwestern Cattle]
   represents).” Contrary to Midwestern’s argument that we also remanded a
   separate claim of unjust enrichment, our opinion expressly stated that we
   “only reinstate [Midwestern Cattle’s] money had and received claim.”
   Midwestern Cattle Mktg., 800 F. App’x at 251. Likewise, our decretal
   language reversed as to only one claim and one remedy, not also a second,
   separate claim. Id. (“For the foregoing reasons, we REVERSE the district
   court’s summary judgment order dismissing [Midwestern Cattle’s] claim for
   money had and received and rejecting [Midwestern Cattle’s] request for
   imposition of a constructive trust.”).
          Indeed, our opinion expressly distinguished the conceptual “theory”
   of unjust enrichment from an “independent claim” under Texas law for
   money had and received. Id. at 245 n.14 (treating a money-had-and-received
   claim as itself being a recovery “on an unjust enrichment theory”). That view
   aligns with Texas state courts’ understanding that unjust enrichment
   describes the nature of certain claims and remedies, not a distinct cause of
   action itself. See Argyle Indep. Sch. Dist. ex rel. Bd. of Trs. v. Wolf, 234 S.W.3d
   229, 246 (Tex. App. 2007) (“Unjust enrichment, itself, is not an
   independent cause of action . . . .”); Mowbray v. Avery, 76 S.W.3d 663, 679
   (Tex. App. 2002). Other federal courts applying Texas law agree. See
   Villareal v. First Presidio Bank, 283 F. Supp. 3d 548, 553 n.5 (W.D. Tex.

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   2017); Hancock v. Chi. Title Ins. Co., 635 F. Supp. 2d 539, 560 (N.D. Tex.
   2009) (collecting cases).
          Our opinion did once refer to Midwestern’s “claims,” plural, for
   money had and received and unjust enrichment. Midwestern Cattle Mktg., 800
   F. App’x at 247. But that language appears to have just echoed Midwestern’s
   own pleading convention; Midwestern styled several remedial theories as
   discrete counts in its complaint. Id. at 244 (noting Midwestern’s pleading of
   unjust enrichment as Count Three, exemplary damages as Count Twelve,
   and attorney’s fees as Count Thirteen). Our language reflecting that pleading
   choice did not sub silentio endorse unjust enrichment as an independent cause
   of action. Midwestern’s argument about the section headings in our opinion
   has even less force, for the section headings indisputably included remedial
   theories such as a constructive trust. Id. at 247.
          Because we did not remand an independent unjust-enrichment claim,
   Midwestern’s argument about the treatment of such a claim on remand—
   that the district court supposedly granted summary judgment on that claim
   without notice—is unpersuasive.
          2. Midwestern also finds fault in the district court’s disposition of the
   money-had-and-received claim that we did remand. We perceive no error.
          First, Midwestern argues that its Seventh Amendment right to a trial
   by jury for actions at common law bars summary judgment on this claim
   because money had and received is an action at law. But even for actions at
   law, the Supreme Court has long held that “summary judgment does not
   violate the Seventh Amendment.” Parklane Hosiery Co. v. Shore, 439 U.S.
   322, 336 (1979) (citing Fid. & Deposit Co. of Md. v. United States, 187 U.S. 315,
   319–21 (1902)).
          Second, Midwestern disputes the district court’s weighing of certain
   facts in determining that the unclean-hands defense bars relief on the money-

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                                   No. 20-10663

   had-and-received claim. Midwestern argues that its own acts amounted to
   negligence at most, that the district court gave too much weight to Legend’s
   detrimental reliance on Midwestern’s conduct, and that the district court did
   not give enough weight to Legend’s disregard of internal warnings. That
   argument focuses on how the district court weighed the equities, not the
   existence of disputed facts. When asked at oral argument to identify any
   disputed factual issue on the defense, Midwestern identified none,
   responding that the open issues were “the balancing of the equities.” Oral
   Argument Recording at 39:28–40:00.
          Our decision in the first appeal held that, when considering summary
   judgment on an unclean-hands defense, a district court should weigh the
   equities by “balancing plaintiff’s errors of omission or commission against
   the defendant’s unjust acts.” Midwestern Cattle Mktg., 800 F. App’x at 246
   (cleaned up). The district court did so on remand. It found that Midwestern’s
   own conduct—giving Tony Lyon, a convicted felon, access to its checkbook
   and signature stamp—contributed to its misfortune. The court also noted
   that Midwestern’s conduct caused Legend to believe that its checks
   deposited to the Lyons’ account were authorized and would be honored,
   leading Legend to extend credit to the Lyons. By contrast, after thoroughly
   analyzing Legend’s conduct with respect to the sums of money at issue, the
   district court found that Legend did not act unjustly. We find no reversible
   error in the district court’s attentive weighing of those considerations and
   grant of summary judgment on the unclean-hands defense.
                                    *   *   *
          For the reasons set forth above, the judgment of the district court is
   AFFIRMED.

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