Court Opinion

ID: 9406061
Source: CourtListenerOpinion
Date Created: 2023-06-29 18:00:51.462161+00
Date Added: 2024-06-11T17:20:26.627879
License: Public Domain

Case: 22-30663        Document: 00516804409             Page: 1      Date Filed: 06/29/2023

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

                                     ____________                                       FILED
                                                                                     June 29, 2023
                                      No. 22-30663                                   Lyle W. Cayce
                                     ____________                                         Clerk

   Bobbys Country Cookin, L.L.C., individually and on behalf of all
   persons or entities nationwide who are similarly situated; Casa Manana,
   Incorporated; Que Pasa Taqueria, L.L.C.; Casa Tu
   Sulphur, L.L.C.,

                                                                    Plaintiffs—Appellees,

                                            versus

   Waitr Holdings, Incorporated,

                                              Defendant—Appellant.
                     ______________________________

                     Appeal from the United States District Court
                        for the Western District of Louisiana
                               USDC No. 2:19-CV-552
                     ______________________________

   Before Jones, Clement, and Haynes, Circuit Judges.
   Per Curiam: *
         This is a contract modification case. Bobby’s Country Cookin’,
   L.L.C., represents a class of restaurants that claim Waitr Holdings, Inc., a
   food delivery service, should be held liable for damages stemming from a
   breach of contract. Their dispute revolves around the service fees Waitr

         _____________________
         *
             This opinion is not designated for publication. See 5th Cir. R. 47.5.
Case: 22-30663     Document: 00516804409           Page: 2   Date Filed: 06/29/2023

                                    No. 22-30663

   charged the restaurants, specifically, its decision to increase those fees
   several times unilaterally. The district court denied Waitr’s motion for
   partial summary judgment, finding that Louisiana contract law prohibits
   parol evidence of contract modification when the contract in question is
   integrated and requires any modifications to be in a signed writing. In the
   alternative, the district court determined there was a factual dispute barring
   partial summary judgment. We AFFIRM in part, REVERSE in part, and
   REMAND for further proceedings consistent with this opinion.
                                         I
          Waitr operates an online food delivery service that contracts with
   restaurants to deliver meals. Customers select from Waitr’s network of
   partner restaurants and order through its platform. Waitr receives and
   transmits the orders to its partner restaurants, processes the payments, picks
   up the food, and delivers the order to the customer. In exchange, the
   restaurants and Waitr split the proceeds, with Waitr automatically deducting
   its service fee from the customer’s payment.
          Bobby’s Country Cookin’ contracted with Waitr on July 27, 2017, to
   join Waitr’s network. Bobby’s agreed to a ten percent service fee on every
   order as part of their agreement. The contract included an “Entire
   Agreement & Changes” provision which states:
          This Agreement and the Order or exhibits hereto constitute the
          entire Agreement between the parties, and supersedes any
          prior or contemporaneous negotiations or agreements,
          whether oral or written, related to this subject matter.
          Customer is not relying on any representation concerning this
          subject matter, oral or written, not included in this Agreement.
          No representation, promise or inducement not included in this
          Agreement is binding. No modification of this Agreement is
          effective unless in writing and signed by an authorized
          representative of each party, and no waiver is effective unless

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          the party waiving the right signs a waiver in writing. Nothing
          in this Agreement, express or implied, is intended to confer or
          shall be deemed to confer upon any persons or entities not
          parties to this Agreement, any rights or remedies under or by
          reason of this Agreement.
   Approximately a year later, Waitr unilaterally increased its fee to fifteen
   percent without obtaining both parties’ written signatures.
          On April 30, 2019, Bobby’s filed a class action complaint in federal
   court alleging Waitr breached its contracts with its network restaurants by
   unilaterally increasing its service fees, did so in bad faith, and was unjustly
   enriched. Bobby’s later amended its complaint, adding several named
   restaurant plaintiffs and proposing a second class irrelevant to the appeal
   before us.
          Waitr moved for partial summary judgment, arguing the restaurants’
   breach of contract claim failed as a matter of law because they acquiesced to
   the fee increases or, in the alternative, were subject to estoppel. Without an
   underlying breach of contract, Waitr also contended that the restaurants’ bad
   faith breach of contract cause of action necessarily failed. Finally, Waitr
   argued that because the restaurants had remedies available at law, they could
   not sustain their unjust enrichment claim.
          The district court granted in part and denied in part the motion for
   partial summary judgment. First, it found that the restaurants’ contracts
   were fully integrated and that Waitr had not modified its agreements in
   writings signed by both parties. It then held that Louisiana law bars parol
   evidence from being used to prove the existence of a contractual modification
   by acquiescence when the contract in dispute is fully integrated and requires
   modification to be in a signed writing. In the alternative, the district court
   held that the parties had a genuine dispute of material fact regarding whether
   they agreed to modify their contracts. Second, the district court sided with

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   Waitr that the restaurants had remedies available at law and could not sustain
   an unjust enrichment cause of action.
          Waitr filed a motion to alter or amend the judgment or, alternatively,
   to certify an interlocutory appeal. The district court granted the alternative
   motion. Waitr timely applied to this court, and a motion panel granted its
   application, providing us with jurisdiction under 28 U.S.C. § 1292(b).
                                         II
          We review a grant (or denial) of summary judgment de novo. Davidson
   v. Fairchild Controls Corp., 882 F.3d 180, 184 (5th Cir. 2018). A “court should
   grant summary judgment when ‘there is no genuine dispute as to any material
   fact and the movant is entitled to judgment as a matter of law.’” Id. (quoting
   Fed. R. Civ. P. 56(a)). The parties agree that Louisiana contract law
   controls the merits of this appeal. “In Louisiana, the interpretation of an
   unambiguous contract is an issue of law for the court.” Taita Chem. Co. v.
   Westlake Styrene Corp., 246 F.3d 377, 386 (5th Cir. 2001).
                                        III
          Waitr challenges the district court’s holding that Louisiana law bars
   parol evidence when a contract requires modifications in writing and is a fully
   integrated document. It also argues that the district court erred in its
   alternative finding that there is a dispute of material fact regarding whether
   the restaurants intended to modify their contracts “by silence, inaction, or
   implication.”
          In its order, the district court correctly found that the restaurants’
   contracts were fully integrated, and Waitr does not dispute this conclusion
   on appeal. Nor could it, the “Entire Agreement & Changes” provision
   clearly states, “[t]his Agreement and the Order or exhibits hereto constitute
   the entire Agreement between the parties, and supersedes any prior or

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   contemporaneous negotiations or agreements, whether oral or written,
   related to this subject matter.” What Waitr does challenge are the effects of
   such a clause on parol evidence submitted to the court to prove a subsequent
   modification.
          “The general rule in Louisiana is that a court may not consider parol
   evidence to alter the terms of a written agreement when that agreement is a
   complete and accurate statement of all the terms agreed upon by the parties.”
   King v. Univ. Healthcare Sys. LC, 645 F.3d 713, 719 (5th Cir. 2011) (quotation
   marks and citation omitted). However, the Louisiana Supreme Court has
   long held that “the Civil Code does not forbid the proving by parol evidence
   of a subsequent agreement to modify or to revoke a written agreement.”
   Salley v. Louviere, 162 So. 811, 813 (La. 1935). In Louisiana, any “contract
   that is not required by law to be in writing may be modified” by a subsequent
   unwritten agreement. Schindler Elevator Corp. v. Long Prop. Holdings, L.L.C.,
   182 So. 3d 233, 241 (La. Ct. App. 2015) (applying this rule to an alleged oral
   agreement to modify a written contract). Service agreements in Louisiana,
   such as the contracts between Waitr and the restaurants, do not need to be in
   writing to be legally enforceable. Id.
          We have further held that under Louisiana law, even integrated,
   written contracts requiring all modifications to be in writing can be modified
   by oral agreement or conduct. See Taita, 246 F.3d at 387 (“[I]t is well
   established [in Louisiana law] that even if the written contract contains a
   provision requiring that all modifications be in writing . . . either oral
   agreement or conduct can nonetheless prove modification.”); see also King,
   645 F.3d at 719 (“Even a written merger or integration clause is not a per se
   bar on consideration of parol evidence” of a contract modification under

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   Louisiana law.). 1 But, depending on the facts of a case, just because an
   integration clause does not always bar parol evidence in favor of modification
   does not mean that it can never bar such evidence. See Omnitech Int’l, Inc. v.
   Clorox Co., 11 F.3d 1316, 1328 (5th Cir. 1994). Indeed, the district court
   should enforce a merger clause if it correctly reflects the parties’ intentions.
   King, 645 F.3d at 719.
           So, the district court erred when it found that it must bar the
   introduction of parol evidence here because “[b]y its very definition an
   integration or merger clause negates the legal introduction of [such]
   evidence.” Instead, the correct summary of Louisiana law would be that a
   court may bar parol evidence of modification when “the facts of the instant
   case compel a conclusion that the merger clause correctly reflected the
   parties’ intentions and should thus be enforced as written.” Omnitech, 11
   F.3d at 1328. We, therefore, REVERSE the district court’s order to the
   extent that it relied on an incorrect understanding of Louisiana law. 2
           Moving on to investigate the facts before us on appeal, we find the
   district court correctly denied partial summary judgment because there is a
   dispute of material fact regarding whether the parties modified their contract.
           _____________________
           1
             The restaurants, for their part, argue that our conclusions in Taita were federal
   misinterpretations of Louisiana law that erroneously expanded a “Louisiana Construction
   Contract Exception.” In Bobby’s’ and its co-plaintiffs telling, Louisiana law only allows
   parol evidence when a party seeks to show an integrated construction contract was later
   modified. However, this argument lacks merit and is borderline frivolous. See, e.g., Salley,
   162 So. 811 (non-construction lease dispute); Ill. Cent. Gulf R.R. Co. v. Int’l Harvester Co.,
   368 So. 2d 1009 (La. 1979) (same); Schindler, 182 So. 3d 233 (non-construction elevator
   service case), Monroe v. Physicians Behavioral Hosp., LLC, 147 So. 3d 787 (La. Ct. App.
   2014) (non-construction unpaid wages claim).
           2
              We also disagree with the district court’s conclusion that our holding—by
   allowing the parties to argue whether they modified their integrated contracts “by silence
   or acquiescence”—renders “[p]laintiffs’ claims . . . moot[.]” Instead, it simply means that
   the parol evidence issue may proceed, not that it is dispositive in this case.

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   In contract modification cases, “the party urging modification,” here Waitr,
   “must establish” that the parties agreed to modify their written agreement.
   Taita, 246 F.3d at 387. In doing so, Waitr may use “silence” in “special
   circumstances” to demonstrate “it reasonably believed” the restaurants
   accepted its modification. Id. at 386; La. Civ. Code art. 1942. In short,
   Waitr must show that there was a meeting of the minds consenting to a
   contract modification between the restaurants and itself. Taita, 246 F.3d at
   387.
           In its order, the district court noted that the restaurants denied
   agreeing to modify their contracts with Waitr when they continued using its
   service despite the higher fees. The court determined that this evidence
   created a genuine dispute of material fact as to whether the parties reached a
   meeting of the minds regarding a contract modification. The district court
   then implicitly denied partial summary judgment on this alternative ground.
           On appeal, Waitr reiterates its argument in support of its motion for
   partial summary judgment. Before the district court, Waitr said that the
   restaurants’ tacitly agreed to a contract modification. It pointed to evidence
   that Bobby’s and its co-plaintiffs failed to protest higher service fees and
   continued to use Waitr’s application for months after the fee increase. The
   restaurants countered in the proceedings below that they reasonably delayed
   their response by the terms of their contracts. And before us and the district
   court, Bobby’s and its co-plaintiffs point to evidence in the form of affidavits
   that they never agreed to an increase nor intended to agree to such an increase
   by continuing to use Waitr’s service. 3 Based on this evidence, a reasonable
           _____________________
           3
              The restaurants, for the first time on appeal, argue that additional facts,
   specifically that Waitr required them to make costly investments and that they protested
   the fee increases, create a genuine dispute of material fact on whether the parties agreed to
   a contract modification. Because these arguments were not made below, they are forfeited
   on appeal. See Rollins v. Home Depot USA, Inc., 8 F.4th 393, 397 (5th Cir. 2021) (“A party

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   factfinder could side with either party, and the district was right to conclude
   that whether Waitr and the restaurants agreed to a contract modification is a
   genuine dispute of fact that is best left to a jury. Thus, we AFFIRM the
   district court’s order to the extent that it denied the motion for partial
   summary judgment due to a genuine factual dispute.
                                               IV
           We AFFIRM the order denying the motion for partial summary
   judgment in part insofar as it relied on a genuine dispute of material fact. We
   REVERSE the order to the extent that it depends on an erroneous
   understanding of Louisiana contract law. We further REMAND to the
   district court for additional proceedings consistent with this opinion.

           _____________________
   forfeits an argument by failing to raise it in the first instance in the district court—thus
   raising it for the first time on appeal . . . .”) (quotation marks and citation omitted).

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