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92-1758Court of Appeals for the Fifth Circuit25.03.2004

Gesamter Gesetzestext

*Local Rule 47.5 provides: "The publication of opinions that
have no precedential value and merely decide particular cases on
the basis of well-settled principles of law imposes needless
expense on the public and burdens on the legal profession."
Pursuant to that Rule, the Court has determined that this opinion
should not be published.
UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 92-1758
Summary Calendar
ALBAUGH CHEMICAL CORPORATION.,
Plaintiff-Appellant,
VERSUS
OCCIDENTAL ELECTROCHEMICALS CORPORATION, ET AL.,
Defendants-Appellees.
Appeal from the United States District Court
For the Northern District of Texas
3:87 CV 0953 G
( August 23, 1993 )
Before HIGGINBOTHAM, SMITH, and DEMOSS, Circuit Judges.
PER CURIAM:*
I.
This diversity case arises from a contract for the sale of EPA
registrations of herbicide chemicals and equipment for their
manufacture. Diamond Shamrock Agricultural Corporation (DSAC)
contracted to sell to Albaugh Chemical Corporation (ACC) forty

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specified EPA herbicide registrations, referred to by the parties
as "labels," and some equipment for the sum of $185,000. DSAC had
separately agreed to sell, if available, a seat on the EPA's 2,4-D
Task Force (the "task force seat") to ACC. The agreements provided
that ACC was to place part of the contract price in an escrow
account until they took possession of the equipment. No such
account was ever established. Before executing the final
agreement, DSAC notified ACC that one of the labels previously
discussed had been sold to a third party and that they were unable
to guarantee the transfer of the task force seat. Additionally, a
number of the labels were, at this time, suspended by the EPA,
rendering them unavailable for manufacture. Removal of the
suspension required the performance of a series of test on the
chemicals to ensure that they would continue to meet EPA standards.
ACC was aware of these facts at the time the agreement was drafted.
DSAC transferred thirty-nine of the forty contracted-for labels to
ACC but withheld the "Lo-Val" label after it learned that the
escrow account had not been established. In fact, ACC never paid
any part of the contract price and actually resold several labels
and some equipment for $490,000. ACC refused to remit payment and
filed suit claiming, inter alia, breach of warranty, beach of
contract, violation of the Texas Deceptive Trade Practices Act
(DTPA) and misrepresentation. DSAC, asserted a counterclaim for
breach of the same contract. After extensive discovery, DSAC filed
a motion for summary judgment on ACC's claims. The court granted

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both this motion and its later motion for summary judgment on
DSAC's own counterclaim.
In granting the motion, the district court disregarded an
affidavit filed by Albaugh Chemical's president, Dennis Albaugh in
opposition to the motion for summary judgment. The affidavit
contradicted Albaugh's prior deposition testimony without giving
any reasonable explanation for the changes. The district court
concluded that the affidavit could not be considered as creating
the genuine issue of material fact needed for Albaugh to survive
the motion for summary judgment.
On appeal, ACC asserts that: 1. The district court erred in
holding that ACC waived its right to rely on the Texas Deceptive
Trade Practices Act. 2. The district court abused its discretion
in concluding that Mr. Albaugh's affidavit could not be considered
as creating a genuine issue of material fact. 3. The district
court erred in granting DSAC's motion for summary judgment on its
breach of contract claim.
We AFFIRM.
II.
We review a district court's findings of fact under the
"clearly erroneous" standard of review. We review a summary
judgment de novo, applying the same criteria as the district court.
Guthrie v. Tifco Indus., 941 F.2d 374, 376 (5th Cir. 1991), cert.
denied, 112 S. Ct. 1267 (1992). If there is "no genuine issue of
material fact and . . . the moving party is entitled to judgment as
a matter of law." Fed. R. Civ. P. 56(c); Anderson v. Liberty Lobby,

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Inc., 477 U.S. 242, 250, 106 S. Ct. 2505, 2511, 91 L. Ed. 2d 202
(1986). Once the moving party has identified those portions of the
record which entitled it to judgment as a matter of law, the burden
shifts to the nonmoving party to come forth with specific facts
that show there is no genuine issue for trial. Matsushita Elec.
Indus.Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct.
1348, 1356, 89 L. Ed. 2d 538 (1986). Summary judgment is
appropriate if a party fails to establish the existence of an
element essential to its case and on which it has the burden of
proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106
S. Ct. 2548, 2552, 91 L. Ed. 2d. 265 (1986); see, Davis v. Illinois
Central R.R., 921 F.2d 616, 618 (5th Cir. 1991).
III.
CHOICE OF LAW AND THE DECEPTIVE TRADE PRACTICES ACT
Where a contract manifests the intent of the parties to select
in advance the jurisdiction whose laws will govern any disputes
arising out of the contract, courts will generally uphold the
provision so long as there is an adequate nexus between the forum
and the contract. M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1,
15 (1972). ACC's choice-of-law provision in the contract
specifically states that "[i]n the event that [ACC] needs to
enforce its rights under this Agreement against [DSAC], [DSAC]
agrees that Iowa law shall apply." The parties intent is clear and,
because ACC is an Iowa corporation, there is a reasonable
connection between the contract and the chosen forum. We agree
with the district court that Iowa law clearly applies.

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ACC's explicit choice of Iowa law precludes its reliance on
Texas' Deceptive Trade Practice Act (DTPA). ACC contends that the
district court's application of the choice-of-law provision to bar
its action under the DTPA is against public policy. We disagree.
ACC bargained for and drafted the choice of law clause; it cannot
now demand that Texas law be applied.
ACC relies heavily on the DTPA's §17.42 anti-waiver provision
as proof that the district court's decision is against public
policy. However, § 17.42 has not prevented other courts from
finding contract clauses which preclude a DTPA action. See, Hoffman
v. Burroughs, 571 F. Supp. 545 (N.D. Tex. 1982); Wydel Assoc. v.
Thermasol, Ltd., 452 F. Supp. 739 (W.D. Tex. 1982). As the
district court noted, the DTPA anti-waiver provisions addresses
instances when unequal bargaining power is used to circumvent the
policy of protecting consumers. See, MBank Fort Worth, N.A. v.
Trans Meridian, Inc. 820 F.2d 716, 721 (5th Cir. 1987). ACC offers
no evidence to show that DSAC had a greater bargaining strength or
that it was coerced into agreeing to a disadvantageous contract.
Therefore, ACC cannot rely on the anti-waiver provisions of the
DTPA as a means of avoiding the consequences of the choice-of-law
language it voluntarily chose. See, Jack B. Anglin Co. v. Tipps,
842 S.W.2d 266, 271 n.9 (Tex. 1992). We hold that ACC waived its
right to rely on the Texas DTPA and affirm the district court's
ruling in that regard.
IV.
GENUINE ISSUE OF MATERIAL FACT

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DSAC supported its first motion for summary judgment, on ACC's
claims, with deposition testimony and exhibits. In response to
this motion, ACC filed an affidavit by Dennis Albaugh that
contradicted much of his prior testimony. DSAC moved to strike
that affidavit and the district court granted the motion by
indicating that it would not consider the affidavit in ruling on
whether there was a genuine issue of material fact. The court's
decision to ignore the conflicting testimony in the affidavit was
based on the fact that Albaugh had already made changes to his
deposition testimony in errata sheet, submitted two months after
the deposition. Hence, the court reasoned that any new changes were
a sham attempt to create a genuine issue of material fact solely to
defeat DSAC's summary judgment motion.
A party may not create a genuine issue of material fact with
an affidavit that contradicts prior deposition testimony. Thurman
v. Sears, Roebuck & Co., 952 F.2d 128, 136-37 n.23 (5th Cir.),
cert. denied, 113 S. Ct. 136 (1992); Albertson v. T.J. Stevenson &
Co., 749 F.2d 223, 233 n. 9 (5th Cir. 1984). The court will not
consider such an affidavit unless either of two exceptions apply.
The affidavit must sufficiently explain the reasons for the
contradiction, or else, the deposition itself shows that the
affiant was confused while giving his earlier testimony. See, e.g.,
Kennett-Murray Corp. v. Bone, 622 F.2d 887, 894 (5th Cir. 1980).
However, the affidavit must cite specific instances in the
deposition transcript showing that the confusion existed as a
result of undue pressure, badgering, or counsel's attempts to

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mislead the witness. See, e.g., Miller v. A.H. Robins Co., 766
F.2d 1102, 1104-05 (7th Cir. 1985).
We agree with the district court that neither of these
exceptions applies to the case at hand. The court below found that
Albaugh's affidavit failed to provide the requisite "reasonable
explanation" for the changes. The district court also found that
there was insufficient evidence to show that any inappropriate
behavior by opposing counsel caused Albaugh's "incorrect"
misstatements. Albaugh failed to provide a reasonable explanation
for why the affidavit so dramatically altered his prior testimony
when he had already made material, substantive changes to his
deposition through the errata sheet. Generally, this court has
upheld trial court grants of summary judgments against parties who
attempt to retract sworn statements which are fatal to their
claims. See, e.g., Thurman, 952 F.2d at 136-37, n.23 (and cases
cited within). Albaugh gives us no reason to treat this case
differently.
After reviewing the record and the nature of the changes
caused by the affidavit, we agree with the district court's
conclusion that Albaugh's affidavit does not fall within the
exceptions. Accordingly, we find that the district court did not
err in granting DSAC's motion for summary judgment and affirm.
V.
BREACH OF WARRANTY AND BREACH OF CONTRACT
ACC contends that the district court erred in granting summary
judgment on its breach of warranty claim. ACC argues that DSAC

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breached the warranty provision of the agreement by transferring a
number of the suspended labels. The warranty language in the
contract stated that: the assets to be transferred "will be free
and clear of . . . encumbrances and will not be subject to any . .
. regulations of government agencies which will interfere with the
removal, transfer or use of said assets."
"It is well settled [that] `doubtful language in a written
instrument is construed against the party who selected it.'" Rector
v. Alcorn, 241 N.W.2d 196, 202 (Iowa 1976)(citation omitted); Iowa
Fuel and Minerals, Inc. v. Iowa State Board of Regents, 471 N.W.2d
859, 862 (Iowa 1991). In this case, ACC drafted the contract and
was, therefore, in the best position to ensure that it drafted
provision which explicitly covered the labels.
We agree with the district court that ACC's failure to create
a warranty explicitly covering the labels means that this warranty
provision must apply to the labels. At the time ACC drafted the
warranty's language against the transfer of restricted assets, it
was aware that some of the labels were in suspension and that DSAC,
which was no longer operating, would not be able to conduct the
tests necessary to take the labels out of suspension. The district
court found that the "omission of any reference to labels in
suspension evinces the parties' intent that such labels were to be
transferred along with other assets." The court therefore
concluded that the prohibition in the warranty against transferring
encumbered assets must refer not to suspension of labels but to

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claims to title and other liens on the assets. We agree.
Accordingly, ACC's claim for breach of warranty must fail.
ACC's alternative claim that DSAC breached the contract must
also fail. ACC contended that DSAC's failure to transfer two labels
constituted a breach. The district court rejected this argument and
found that ACC's knew at the time the agreement was drafted that
the butyric label had been sold to a third party. ACC also knew
that it would be receiving suspended labels. Given this knowledge,
we fail to see how DSAC breached the contract. But even assuming a
breach occurred, ACC's failure to establish the escrow account
constitutes a material fault that excused DSAC's obligation to
transfer the Lo-Val label which it was withholding. See, Rasch v.
City of Bloomfield, 153 N.W.2d 718, 724 (Iowa 1967).
ACC finally asserts that defendants made numerous
misrepresentations concerning, among others, the number of labels
in suspension and the status of the task force seat. The district
court found no evidence in the record that ACC relied on any
alleged misrepresentations or that they were induced into the
contract. Upon review of the record, we cannot conclude that the
district court was clearly erroneous in its ruling on either the
breach of contract or the breach of warranty claims.
VI.
CONCLUSION
For the foregoing reasons, the district court's decision to
grant DSAC summary judgment on ACC's claims of misrepresentation,

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DTPA violations, breach of warranty and breach of contract is
AFFIRMED; and the district court's grant of summary judgment in
favor of DSAC on its cross claim against ACC for breach of contract
is also AFFIRMED.

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