Ascend Performance Materials Operations LLC v. Rescar Companies

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
A SCEND PERFORMANCE MATERIALS 	§
O PERATIONS LLC, 	§
Plaintiff, 	§
§
v. 	§ 	CIVIL A CTION N O. 4:24-cv-00582
§
RESCAR COMPANIES, 	§
Defendant. 	§
MEMORANDUM AND RECOMMENDATION
Before the Court is Defendant’s Motion for Summary Judgment.1 ECF 84.
Defendant moves for summary judgment on both Plaintiff’s breach of contract and
negligence claim. For the reasons discussed below, the Court RECOMMENDS that
Defendant’s Motion be DENIED.
I. 	Factual and Procedural Background.
The summary judgment record establishes the following undisputed facts.
Plaintiff Ascend Performance Materials (“Ascend”) manufactures materials (e.g.,
nylon). ECF 1 ¶ 5. Defendant Rescar Companies (“Rescar”) is a rail transportation
services company. ECF 1 ¶ 6. On July 1, 2013, Ascend contracted with Rescar to
1 The District Judge referred this case to the undersigned Magistrate Judge pursuant to 28 U.S.C.
§ 636(b)(1)(A) and (B), the Cost and Delay Reduction Plan under the Civil Justice Reform Act,
and Federal Rule of Civil Procedure 72. ECF 8.
United States District Court
Southern District of Texas
ENTERED
April 01, 2026
Nathan Ochsner, Clerk
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provide switching,2 railcar maintenance, and track maintenance services at Ascend’s
plant in Decatur, Alabama. ECF 101-1. In 2021, the Parties extended the services
agreement to other plants, namely, the Pensacola, Florida plant at issue in this case.
ECF 101-3. In 2022, the Parties further amended the agreement, clarifying the scope
and nature of services Rescar would provide at the Pensacola plant. ECF 101-4.
On November 15, 2023, a railcar containing phenol (GATX 69765), arrived
at the Pensacola plant’s railyard. ECF 84 at 6; ECF 101 at 6. On November 16, a
railcar bearing a similar number (GATX 66795) but containing resin arrived at the
yard. ECF 84 at 6-7; ECF 101 at 6. Because the railcar contained resin, it lacked
hazardous material placards that a railcar containing phenol would normally display.
ECF 85-17 at 19-20. Despite outward signs to the contrary, on November 24, 2023,
Rescar’s employee erroneously identified the resin railcar as a phenol railcar. ECF
84-16; ECF 101-5. The next day (November 25) Rescar delivered, or spotted,3 it to
Ascend’s phenol unloading area. Id. Rescar employees then moved the resin railcar
twice within the unloading area, until it was positioned in Spot 3, where the
unloading attempts began. ECF 84-16; ECF 101 at 6.
2 Railcar switching involves breaking down or assembling trains and generally moving or
organizing railcars. CSX Transportation, Inc. v. Gen. Mills, Inc., 82 F.4th 1315, 1318 (11th Cir.
2023).
3 Railcar spotting involves positioning a railcar for loading or unloading. ECF 84 at 7 n.2.
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During the unloading process, Rescar’s employees spot the railcar in the
correct position and then Plaintiff’s employees do the unloading itself. ECF 84-15
at 5, 29-30. Ascend’s employees are required to follow a Phenol Railcar Unloading
Standard Operating Procedure (“SOP”), which requires they inspect and verify a
railcar’s number, placards, and inclusion on the “Released for Unloading” list prior
to unloading. 	ECF 85-1. 	This process must be completed each time a railcar is
moved between spots within the unloading area. Id.; ECF 85-15. Upon delivery of
the resin railcar to the unloading area on November 25, Ascend’s employee Travis
Duncan completed the inspection form and marked the railcar as containing phenol
and displaying the necessary phenol placards. 	ECF 85-3. 	As the car was moved
through the steaming4 spots to the unloading spot, Duncan again erroneously marked
down that the resin car was on the unloading list and displayed the correct placards.
ECF 85-4. 	Ascend’s employees began unloading the resin railcar into the phenol
storage tank and Duncan noted in the paperwork that the pump’s meter indicated
material was flowing from the car into the tank. Id.
Ascend’s employees started to have trouble unloading the resin railcar, so they
attempted to steam it further, believing that the phenol was still frozen. ECF 85-5;
ECF 85-15 at 50. Ascend’s employees then tried to unload it again but continued to
4 Phenol railcars arrive at the yard frozen, so Ascend steams the cars to melt the phenol and allow
it to be pumped out of the cars. ECF 85-15 at 28.
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have trouble, so they sent the railcar for more steaming. 	ECF 85-8 at 22. 	At this
point, Ascend employees realized the car contained resin, but were uncertain
whether resin material had been unloaded into the phenol tank. ECF 85-24 at 5-6.
Ascend later terminated Duncan for falsely filing out the inspection reports and
disciplined other employees involved in the incident. 	ECF 85-6; ECF 85-7; ECF
85-9; ECF 85-10; ECF 85-11; ECF 85-12; ECF 85-13.
Between November 25 and November 27, 2023, Ascend asked Rescar to
reweigh the resin car three times. ECF 101-9 at 3-4; ECF 101-8 at 11-14. Rescar
indicated the railcar was still full but did not provide the weight ticket showing the
results. Id. On November 29, Rescar again confirmed that the car was full and that
no resin had been unloaded. ECF 101-11.
In late November or early December 2023, Ascend began having issues with
the reactor unit that pulls phenol from the storage tank in question. 	ECF 101-12.
While investigating these issues, Ascend again asked Rescar to reweigh the railcar.
This time, Rescar told Ascend that approximately 13,000 pounds of resin had been
removed from the car and provided the weight tickets. ECF 101-14; ECF 101-15.
II. 	Legal Standards.
Summary judgment is appropriate if no genuine issues of material fact exist,
and the moving party is entitled to judgment as a matter of law. 	FED. R. CIV. P.
56(a). The party moving for summary judgment has the initial burden to prove there
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are no genuine issues of material fact for trial. 	Provident Life & Accident Ins. Co.
v. Goel, 274 F.3d 984, 991 (5th Cir. 2001). 	Dispute about a material fact is
“genuine” if the evidence could lead a reasonable jury to find for the nonmoving
party. Hyatt v. Thomas, 843 F.3d 172, 177 (5th Cir. 2016). “An issue is material if
its resolution could affect the outcome of the action.” 	Terrebonne Parish Sch. Bd.
v. Columbia Gulf Transmission Co., 290 F.3d 303, 310 (5th Cir. 2002). 	If the
moving party meets its initial burden, the nonmoving party must go beyond the
pleadings and must present evidence such as affidavits, depositions, answers to
interrogatories, and admissions on file to show “specific facts showing that there is
a genuine issue for trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986).
The court construes the evidence in the light most favorable to the nonmoving
party and draws all reasonable inferences in that party’s favor. R.L. Inv. Prop., LLC
v. Hamm, 715 F.3d 145, 149 (5th Cir. 2013). 	In ruling on a motion for summary
judgment the Court does not “weigh evidence, assess credibility, or determine the
most reasonable inference to be drawn from the evidence.” Honore v. Douglas, 833
F.2d 565, 567 (5th Cir. 1987). 	However, “[c]onclus[ory] allegations and denials,
speculation, 	improbable 	inferences, 	unsubstantiated 	assertions, 	and 	legalistic
argumentation do not adequately substitute for specific facts showing a genuine
issue for trial.” U.S. ex rel. Farmer v. City of Houston, 523 F.3d 333, 337 (5th Cir.
2008) (citation omitted).
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III. 	Analysis.
The Court applies Texas law in this diversity case. 	See, e.g., ECF 84; ECF
101-1 at 6. See also Threlkeld v. Total Petroleum, Inc., 211 F.3d 887, 891 (5th Cir.
2000) (applying state law in diversity cases).
A. Defendant is not entitled to summary judgment on the negligence
claim.
Under Texas law, the elements of a negligence claim are: (1) the existence of
a legal duty; (2) a breach of that duty; and (3) damages proximately caused by the
breach. 	Nabors Drilling, U.S.A., Inc. v. Escoto, 288 S.W.3d 401, 404 (Tex. 2009).
Defendant argues that, as a matter of law, Plaintiff cannot establish the existence of
a legal duty or proximate causation.
1. Defendant owed a legal duty to perform the services it rendered
for Plaintiff with reasonable care.
“Whether a duty exists is a question of law for the court to decide from the
facts surrounding the occurrence at issue.” Reyna v. Acad. Ltd., No. 01-15-00988-
CV, 2017 WL 3483217, at *7 (Tex. App.—Houston [1st Dist.] Aug. 15, 2017) (no
pet.). In considering whether a legal duty exists, courts analyze the facts according
to “three categories of factors . . . : (1) the relationship between the parties; (2) the
reasonable foreseeability of harm to the person injured; and (3) public policy
considerations.” Texas Home Mgmt., Inc. v. Peavy, 89 S.W.3d 30, 34 (Tex. 2002).
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The most important consideration is foreseeability. Boudreaux v. Swift Transp. Co.,
402 F.3d 536, 541 (5th Cir. 2005).
Defendant argues that its legal duty to Plaintiff did not include a duty to
protect against the risk of improper unloading of railcars of contamination of
Ascend’s phenol tank. Essentially, Rescar contends that it was not foreseeable that
its spotting error would precipitate Ascend “abandon[ing] its unloading procedure,
falsify[ing] records, and unload[ing] 12,500 pounds of resin into the phenol storage
tank.” ECF 84 at 24. Plaintiff responds that Rescar merely owed a duty to deliver
and weigh railcars with reasonable care and failed to do so. ECF 101 at 17.
Here, the longstanding operational relationship created a duty of reasonable
care. See Torrington Co. v. Stutzman, 46 S.W.3d 829, 837 (Tex. 2000) (“[W]e have
recognized that a duty to use reasonable care may arise when a person undertakes to
provide services to another, either gratuitously or for compensation.”). 	Defendant
does not dispute that it provided switching services for Plaintiff at the Pensacola
plant since 2021, and as a service provider, Defendant had a duty to Plaintiff “to use
reasonable care when performing the service.” Mack v. RPC, Inc., 439 F. Supp. 3d
897, 901 (E.D. Tex. 2020) (collecting Texas cases). See also Jones v. Star Houston,
Inc., 	45 	S.W.3d 	350, 	355 	(Tex. App.—Houston 	[1st 	Dist.] 	2001) 	(no 	pet.)
(explaining that “a party to a contract to perform services generally owes a common
law duty to perform with ordinary care and skill, and negligent omission or
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commission relating to the performance of the contract is a tort as well as a breach
of contract.”). Given the nature of the Parties’ relationship, a legal duty to perform
spotting and weighing services with reasonable care existed and it was foreseeable
that mis-spotting the car could result in harm to the Plaintiff, as discussed below.
2. Proximate cause is a fact issue for the jury.
Under Texas law, proximate cause consists of cause in fact and foreseeability.
Meador v. Apple, Inc., 911 F.3d 260, 264 (5th Cir. 2018). “The test for cause in fact
is whether the act or omission was a substantial factor in causing the injury without
which the harm would not have occurred.” W. Invs., Inc. v. Urena, 162 S.W.3d 547,
551 (Tex. 2005). 	Foreseeability is measured by whether “a person of ordinary
intelligence should have anticipated the danger created by a negligent act or
omission.” Stanfield v. Neubaum, 494 S.W.3d 90, 97 (Tex. 2016) (internal quotation
marks and citation omitted). 	“Proximate cause is generally a question of fact for
jury determination, but may, under limited circumstances, be a question of law
where the evidence is without material dispute and where only one reasonable
inference may be drawn therefrom.” 	Rodriguez v. Moerbe, 963 S.W.2d 808, 818–
19 (Tex. App.—San Antonio 1998) (pet. denied) (collecting cases) (internal citations
omitted).
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Although there can be more than one proximate cause of an injury, “[a] new
and independent cause thus destroys any causal connection between the defendant's
negligence and the plaintiff's harm, precluding the plaintiff from establishing the
defendant’s negligence as a proximate cause.” 	Stanfield, 494 S.W.3d at 97. 	A
concurring cause “concurs with the continuing and co-operating original negligence
in working the injury, leaving the causal connection between the defendant's
negligence and the plaintiff's harm intact.” Id. at 98 (cleaned up).
To determine whether a cause is superseding or concurring, the Court looks
to several factors. Where an intervening cause and its consequences are foreseeable,
the cause is concurring rather than superseding. 	Id. (explaining that foreseeability
is a fact-specific inquiry). 	The Court must also consider whether two causes are
interrelated or independent, such as whether an original act of negligence enabled
the intervening cause to occur. Id. at 99. Still, one act of negligence must do more
than “merely creat[ing] the condition that enabled the injury to occur.” 	Id. Where
a cause “alters the natural sequence of events [or] produces results that would not
otherwise have occurred,” it is a superseding cause. 	Columbia Rio Grande
Healthcare, L.P. v. Hawley, 284 S.W.3d 851, 857 (Tex. 2009).
Defendant argues that the actions of Ascend’s employees, including failure to
follow 	the 	phenol 	unloading 	SOP 	and 	falsification 	of 	paperwork, 	constitute
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superseding causes. 	Plaintiff counters that its employees’ actions are at most a
concurring cause alongside Defendant’s original negligence.
Here, Defendant’s original mis-spotting, Plaintiff’s failure to properly follow
its SOP, and Defendant’s post-contamination actions are all potentially part of the
causal chain. 	The relationship between Defendant’s mis-spotting and Plaintiff’s
errors is a fact-specific inquiry that cannot be resolved at summary judgment. 	See,
e.g., Haargaard v. Harris Cnty., No. 01-20672, 2002 WL 755304, at *2 (5th Cir.
2002) (explaining that Texas law usually consider proximate cause is a question for
the jury unless “a reasonable jury could reach only one conclusion.”); Borjas v. Wal-
Mart Stores, Inc., No. EP-16-CV-00093-FM, 2017 WL 1278715, at *4 (W.D. Tex.
Mar. 15, 2017) (explaining proximate cause is a jury question because, under Texas
law, “the jury has broad latitude to infer proximate cause from the evidence and
circumstances surrounding an incident” [cleaned up]); Hall v. Witron Integrated
Logistics, Inc., No. 4:21-CV-477, 2023 WL 4269760, at *6 (E.D. Tex. June 29,
2023) (noting proximate cause is usually a fact question for the jury). A reasonable
jury could find Plaintiff’s actions were a concurring cause because Defendant’s
actions were a necessary predicate to Plaintiff’s mistakes. If the resin car had never
been spotted to the phenol unloading area, Plaintiff would not have had the
opportunity to make the essentially the same mistake as Defendant—mixing up the
car number on a resin car with a similarly numbered phenol car.
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Even if Plaintiff’s actions constitute a new cause, a jury could still find that
Defendant’s post-contamination actions constituted a separate, concurring cause. A
reasonable jury could conclude that the damage to the reactor was the product both
of Plaintiff’s failure to follow its SOP and Defendant’s failure to promptly reweigh
the car and erroneously reporting that no resin had been unloaded. There are factual
disputes over who knew, or should have known, whether material had been
unloaded. 	ECF 84 at 25; ECF 101 at 18-20. 	Therefore, the relationship of each
Parties’ actions in the causal chain cannot be resolved at the summary judgment
stage.
B. Defendant is not entitled to summary judgment on the breach of
contract claim.
Under Texas law, the essential elements for a breach of contract claim are:
“(1) the existence of a valid contract; (2) performance or tendered performance by
the plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained
by the plaintiff as a result of the breach.” Mullins v. TestAmerica, Inc., 564 F.3d 386,
418 (5th Cir. 2009) (citing Aguiar v. Segal, 167 S.W.3d 443, 450 (Tex. App.—
Houston [14th Dist.] 2005) (pet. denied)).
There are two types of breach of contract damages: direct (i.e., benefit-of-the-
bargain damages) and consequential. 	Dallas/Fort Worth Int'l Airport Bd. v. Vizant
Techs., LLC, 576 S.W.3d 362, 373 (Tex. 2019). “Consequential damages are those
damages that result naturally, but not necessarily, from the defendant's wrongful
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acts.” 	Stuart 	v. 	Bayless, 	964 	S.W.2d 	920, 	921 	(Tex. 	1998) 	(cleaned 	up).
Consequential damages must be foreseeable and the probable result of the breach to
be recoverable. Signature Indus. Servs., LLC v. Int'l Paper Co., 638 S.W.3d 179,
186 (Tex. 2022). 	A loss may be foreseeable either because it predictability flows
from the breach or because it arises from special circumstances known to the
breaching party at the time of contracting. Id.
Defendant assumes Plaintiff’s lost profit damages are consequential and
argues they were unforeseeable and therefore not recoverable. 	ECF 84 at 26.
Defendant relies on a statement from the Vice President, Jeffrey Schieszler, who
negotiated the agreement between the Parties and notes that the agreement only
covered switching, not unloading. ECF 85-23. Schieszler further states that spotting
errors are common, so Rescar assumed that Ascend would have procedures to ensure
only the correct railcars were unloaded by its crews. 	Id. at 2. He also claims that
Rescar expected that if it did mis-spot a railcar, its sole liability would be to remove
the car and spot the correct one. 	Id. 	As Plaintiff correctly notes, these conclusory
statements cannot support a grant of summary judgment. Plaintiff instead points to
the close relationship between the Parties as evidence that Defendant could have
contemplated these consequential damages.
Assuming arguendo that the damages are consequential, whether the lost
profits were foreseeable and recoverable is a question of fact for the jury. See, e.g.,
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Signature Indus. Servs., 638 S.W.3d at 186–87; Am. Akaushi Ass'n, Inc. v. Twinwood
Cattle Co., Inc., No. 14-21-00701-CV, 2025 WL 450750, at *34–35 (Tex. App.—
Houston [14th Dist.] Feb. 11, 2025) (pet. filed). A reasonable jury could find that
Defendant contemplated the impact of potentially mis-spotting a railcar on plant
operations, particularly when they amended the agreement in 2022 after a nearly
decade long working relationship. Additionally, a jury, not the Court, must weigh
the 	credibility 	of 	Schieszler’s 	testimony. 	Therefore, 	summary 	judgment 	is
inappropriate.
C. Defendant is not entitled to summary judgment on its mitigation of
damages defense.
“Mitigation of damages is an affirmative defense that is designed to preclude
the plaintiff's recovery if the plaintiff could have avoided damages by his or her own
reasonable efforts and at slight expense.” Taylor Foundry Co. v. Wichita Falls Grain
Co., 51 S.W.3d 766, 774 (Tex. App.—Fort Worth 2001) (no pet.). See also Hygeia
Dairy Co. v. Gonzalez, 994 S.W.2d 220, 224 (Tex. App.—San Antonio 1999) (no
pet.) (explaining mitigation of damages in the negligence context).
Defendant argues Plaintiff possessed a written document, the report by
Ascend employee Travis Duncan indicating that resin was pumped from the railcar
into the phenol tank during the first few unloading attempts, from which Plaintiff
should have been aware of the phenol contamination. 	ECF 84 at 25. 	Defendant
contends that at least before November 30, 2023, Plaintiff should have taken steps
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to shut down its operation to avoid harm to its equipment. Id. Plaintiff counters that
at the time its employees believed this document to be falsified or inaccurate. ECF
101 at 19-20.
A genuine dispute of material fact exists as to when Plaintiff knew or should
have known the phenol tank was contaminated. Plaintiff was in possession of Travis
Duncan’s phenol unloading report (ECF 84-4), which represents that the pump meter
indicated material was flowing during the unloading attempt. Plaintiff contends that
it did not rely on this record because Duncan failed to accurately complete the report
and was fired for doing so. ECF 101 at 19. Other Ascend employees testified that
there was no indication material had been unloaded. 	ECF 101-7. 	Text messages
and emails between Ascend and Rescar employees seem to indicate that Ascend
employees believed no resin had been unloaded. 	ECF 101-10; ECF 101-11; ECF
101-14. 	Further, Rescar represented multiple times that the railcar was the same
weight. 	Id. 	A jury must weigh the evidence and resolve the factual disputes.
Therefore, summary judgment is inappropriate.
IV. 	Conclusion and Recommendation.
For the reasons stated above, the Court RECOMMENDS that Defendant’s
Motion for Summary Judgment (ECF 84) be DENIED.
The 	Clerk 	of 	the 	Court 	shall 	send 	copies 	of 	the 	memorandum 	and
recommendation to the respective parties, who will then have fourteen days to file
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written objections, pursuant to 28 U.S.C. § 636(b)(1)(C). 	Failure to file written
objections within the time period provided will bar an aggrieved party from attacking
the factual findings and legal conclusions on appeal. Douglass v. United Servs. Auto.
Ass’n, 79 F.3d 1415, 1428-29 (5th Cir. 1996) (en banc), superseded by statute on
other grounds.
Christina A. Bryan
United States Magistrate Judge
Signed on April 01, 2026, at Houston, Texas.
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