Universal Truckload, Inc. v. Dalton Logistics, Inc.
946 F.3d 689 (5th Cir. 2020)
Legal Analysis
Legal analysis from Dean's Law Dictionary will be displayed here.
Nature Of The Case
This section contains the nature of the case and procedural background.
Facts
Dalton (D) s is a shipping broker. H&P and Hess hired D to coordinate the transportation of disassembled oil rigs. D outsourced the trucking to P. D owed P $1.9 million for the trucking services it provided. d never paid P for its services and P sued D, H&P, and Hess. In response to P's lawsuit, D counterclaimed, alleging that P had promised to purchase D but never fully finalized the deal, instead stringing D along for over a year. D says that it entered into the shipping contracts with H&P and Hess entirely at P's direction and that P had told D not to pay the debt owed to P on these projects. D spent all of its cash-burning every last asset-at P's direction with constant assurances that the purchase would soon be finalized. D counterclaimed under promissory estoppel: D spent millions in reliance. In March of 2013, D lost a lucrative contract and struggled financially. D decided to shut the company and take profits. D contacted P, and told P to take its trucks out of North Dakota because D would no longer be needing them. P expressed interest in buying D. D told P the deal would need to happen quickly because D lacked the cash sufficient to last long on its own. D, who had 'already shut [the] company down,' opened it back up. P sent an Indication of Interest Letter and then Don Cochran, president of P's parent company, and Limback came to North Dakota in April to see the operations in person. Limback and Cochran were in near-constant communication with D about the purchase, routinely giving assurances that a deal would be finalized soon. P met with D where D reminded P that time was of the essence considering D's dwindling financial resources. D alleges that a $25 million was made by P. P claims that this agreement was never made. P suffered internal management problems with a group of officers not wanting to do a deal with D. D kept telling P about its cash position and P kept on promising that the deal would close. In August 2013, D sent financial statements to P. Three weeks later, P sent Dalton an Asset Purchase Agreement offering $10.3 million upfront with a potential two-year earn-out totaling $24.3 million. This was not the deal P and D had struck in May. P gave assurances that it would be able to get the executives at P to agree to get something done. P urged D to 'increase [its] revenue' by 'getting outside help, other cranes, other trucks and so forth, to be able to . . . help us do more rigs.' P increased D's credit limit and provided the trucks on credit. Eighteen months later, P executives demanded Dalton repay the $1.9 million, and called D's bond. D had no money. D which was valued at $5.7 million in April of 2013, now had no assets, and instead owed Universal Truckload $1.9 million. P sued D, H&P, and Hess to recover the unpaid bills. D counterclaimed alleging breach of contract and, in the alternative, promissory estoppel. The jury found that D should recover under a promissory estoppel theory. D was awarded $5.7 million in reliance damages-the difference between the amount of cash it had on hand before Universal Truckload's promise and the 'zero' balance in its bank account when P called its bond. The jury awarded P the $1.9 million in freight charges that D owed. The court concluded that the $1.9 million was incurred in reliance on P's promises and therefore awarded D a $1.9 million offset against P's breach of contract claim. The court denied JMOL. P appealed.
Issues
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Holding & Decision
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