Steinberg v. Cinema N' Drafthouse

                 IN THE UNITED STATES COURT OF APPEALS

                            FOR THE FIFTH CIRCUIT
                               _______________

                                  No. 95-11222
                               Summary Calendar
                                _______________



                           LAWRENCE E. STEINBERG,

                                                         Plaintiff-Appellee,


                                     VERSUS

                CINEMA N’ DRAFTHOUSE SYSTEMS, INC.;
         JOHN J. DUFFY; JAMES T. DUFFY; and NORMA S. DUFFY,

                                                         Defendants-Appellants.


                         _________________________

             Appeal from the United States District Court
                  for the Northern District of Texas
                            (3:91-CV-1044-R)
                       _________________________

                                 July 12, 1996

Before SMITH, BENAVIDES, and DENNIS, Circuit Judges.

JERRY E. SMITH, Circuit Judge:*



      Cinema N’ Drafthouse (“C&D”) and John, James, and Norma Duffy

(“the Duffys”) appeal the denial of leave to amend their answer to

add certain counterclaims against Lawrence Steinberg.                We conclude

that the court abused its discretion by refusing to allow C&D to


      *
        Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion
should not be published and is not precedent except under the limited circumstances
set forth in 5TH CIR. R. 47.5.4.
add one of its counterclaims but properly refused to allow the

remaining counterclaims.



                                      I.

     When C&D defaulted on a note held by Steinberg, he sold the

collateral.    Because the collateral was worth less than the debt,

he filed suit for the deficiency against C&D and its guarantors,

the Duffys, who raised, as a defense, that Steinberg had sold the

collateral    in   a   commercially    unreasonable   manner.   Steinberg

responded by claiming that the defendants had waived the right to

a commercially reasonable sale.

     The district court agreed with the defendants.         It found that

Steinberg had sold the collateral in a commercially unreasonable

manner and concluded that Texas law permitted neither C&D nor the

Duffys to waive the right to a commercially reasonable sale.            A

panel of this court reversed in part, finding that the Duffys, as

guarantors, could waive the right to a commercially reasonable

sale.   See Steinberg v. Cinema N’ Drafthouse Sys., 28 F.3d 23 (5th

Cir. 1994) (“Steinberg I”).           The Duffys then demanded that C&D

indemnify them for their loss, and C&D did so in part.

     The defendants then moved to amend their answer to assert new

counterclaims.     C&D sought to add a counterclaim under TEX. BUS. &

COMM. CODE ANN. § 9.507 (West 1991), which allows a debtor to recover

for “any loss” caused by a secured creditor’s failure to dispose of


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collateral in a commercially reasonable manner.                  C&D incurred a

loss by indemnifying the Duffys, and it maintained that the loss

was due to Steinberg’s failure to dispose of the collateral in a

commercially     reasonable      manner.       The   Duffys    also    sought    to

counterclaim under § 9.507, alleging that they had suffered a loss

when they became liable to Steinberg for the deficiency and that

the loss was the result of Steinberg’s disposal of the collateral

in a commercially unreasonable manner.1

      The district court refused to allow the counterclaims for two

reasons.     First, it found that the defendants had unduly delayed

adding the counterclaims.         Second, it found the counterclaims were

precluded by Steinberg I.



                                        II.

      Under FED. R. CIV. P. 15(a), a party may amend its pleading

once as a matter of course.         Otherwise, it may amend “only by leave

of court or by written consent of the adverse party; and leave



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       C&D and the Duffys also sought to counterclaim under § 9.507 for attorneys’
fees. The defendants do not appear to seek review of the refusal to allow that
counterclaim. They offer no reason why the district court erred in finding those
claims either unduly delayed or barred by Steinberg I and therefore have waived any
objection.
      FED. R. APP. P. 28(a)(6) requires that an appellant's brief "contain the
contentions of the appellant on the issues presented, and the reasons therefor, with
citations to the authorities, statutes, and parts of the record relied on." An
appellant that fails to present such an argument on any issue waives that issue.
Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d 256, 260 n.9 (5th Cir. 1995)
(holding that "failure to provide any legal or factual analysis of an issue results
in waiver"); United States v. Maldonado, 42 F.3d 906, 910 n.7 (5th Cir. 1995)
(reasoning that failure to do more than vaguely refer to issue constitutes waiver);
Zuccarello v. Exxon Corp., 756 F.2d 402, 407 (5th Cir. 1985) (noting that court will
not consider issue that was not briefed under standards of rule 28).

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shall be freely given when justice so requires.”   Id.   Although we

review the denial of leave to amend for abuse of discretion, Wimm

v. Jack Eckerd Corp., 3 F.3d 137, 139 (5th Cir. 1993); Rhodes v.

Amarillo Hosp. Dist., 654 F.2d 1148 (5th Cir. Unit A Sept. 1981),

the district court’s discretion is not unfettered:

     In the absence of any apparent or declared reasonSSsuch
     as undue delay, bad faith or dilatory motive on the part
     of the movant, repeated failure to cure deficiencies by
     amendments previously allowed, undue prejudice to the
     opposing party by virtue of allowance of the amendment,
     futility of amendment, etc.SSthe leave sought should, as
     the rules require, be “freely given.”

Foman v. Davis, 371 U.S. 178, 182 (1962).



                               III.

     C&D argues that it was unable to assert its counterclaims

until the Duffys made a demand upon it for indemnification, while

the Duffys maintain that they were unable to assert their counter-

claims until we decided Steinberg I.   The district court rejected

these arguments, finding that the defendants were aware of the

facts supporting their claims at the time they filed their original

answer. We must therefore determine when the defendants were first

capable of asserting their counterclaims.

     A party may not maintain a cause of action until it suffers a

legally redressable injury.   Atkins v. Crosland, 417 S.W.2d 150,

153 (Tex. 1967).   An injury under § 9.507 is redressable only if

the injured party can prove an economic loss.      First City Bank-


                                4
Farmers Branch v. Guex, 659 S.W.2d 734 (Tex. App.SSDallas 1983),

aff’d, 677 S.W.2d 25 (Tex. 1984) (holding that “proof of economic

loss . . . is required for compensatory damages”); Bundrick v.

First Nat’l Bank, 570 S.W.2d 12, 19 (Tex. Civ. App.SSTyler 1978,

writ ref’d n.r.e.) (deeming denial of recovery under § 9.507

appropriate where plaintiffs offered no proof of economic loss).

The mere fact that Steinberg sold the collateral in a commercially

unreasonable manner was not enough to enable the defendants to

assert § 9.507 claims against him.

      In Atkins, the court found that a taxpayer’s cause of action

for   accountant    malpractice    accrued    when   he   first   received   a

deficiency notice from the IRS, not when the accountant provided

bad advice:

      Prior to assessment the plaintiff had not been injured.
      That is, assessment was the factor essential to consum-
      mate the wrongSSonly then was the tort complained of
      completed. If a deficiency had never been assessed, the
      plaintiff would not have been harmed and therefore would
      have had no cause of action.

Id. at 153; see also Green v. Helmcamp Ins. Agency, 499 S.W.2d 730

(Tex. Civ. App.SSHouston 1972, writ ref’d n.r.e.) (holding that

plaintiff’s claim against insurance agency for failing to procure

a liability insurance policy accrued when final judgment was

rendered against him, not when agency failed to procure policy).2


      2
          We recognize that both Atkins and Green determined when a cause of
action accrued for purposes of the statute of limitations.       We nonetheless
believe their standard is applicable to this case, as a cause of action accrues
for purposes of the limitations period “when one having a right of action first
becomes legally entitled to apply to a court for relief.” Zidell v. Bird, 692

                                      5
Like a § 9.507 claimant, Atkins could not seek a judicial remedy

until he was economically injured by his accountant’s negligence.

      It was not necessary that Atkins wait until the amount of

damages became certain, however.           See Atkins, 417 S.W.2d at 153

(holding that cause of action may accrue “notwithstanding the fact

that the damages, or their extent, are not ascertainable until a

later date”). Although the deficiency notice did not fix his

liabilitySSit might have been thrown out in tax courtSSit was enough

to enable him to seek relief.          Cf. Bankruptcy Estate of Rochester

v. Campbell, 910 S.W.2d 647, 651 (Tex. App.SSAustin 1995, writ

granted) (“We reject the shareholders’ argument that harm occurs

only upon a judgment of deficiency because that approach requires

certain harm in contravention of the legal injury rule’s clear

standard of specific and concrete risk of harm.”).           It is suffi-

cient that a party suffer a “specific and concrete risk of harm.”

Zidell, 692 S.W.2d at 556.

      Applying this standard, we conclude that C&D’s claim accrued

when the Duffys first demanded indemnification.          Until that event

occurred, whether C&D would suffer an economic loss was contingent

on   whether   the   Duffys    would   demand   indemnification,   just   as

Atkins’s injury was contingent on whether the IRS would issue a

deficiency assessment.        It was the demand for indemnification that

first presented C&D with a specific and concrete risk of loss.


S.W.2d 550, 554 (Tex. App.SSAustin 1985, no writ).

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Because C&D sought to amend its answer less than one month after

the Duffys demanded indemnification, the district court abused its

discretion by refusing to allow the counterclaim.

     In contrast, the Duffys could have asserted their counterclaim

when this   litigation   began.   While   the   Duffys’   liability   to

Steinberg was not fixed with certainty until Steinberg I issued,

Steinberg’s initial complaint presented the Duffys with a specific

and concrete risk of harm.    The district court did not abuse its

discretion by refusing to allow the Duffys’ counterclaims.

     The district court also denied the defendants leave to amend

on the ground that their counterclaims were precluded by Stein-

berg I. Having determined that the district court properly refused

to allow the Duffys’ counterclaims on the ground that they were

untimely asserted, we need not consider whether the court correctly

found those claims barred by Steinberg I.       We do not know whether

the court meant to reject C&D’s counterclaim on this basis as well.

If so, it erred.    Steinberg I addressed only the rights of the

Duffys vis-à-vis Steinberg; it could not possibly have had any

preclusive effect on C&D’s claim.

     Accordingly, the portion of the district court’s order denying

C&D leave to amend its answer to add a counterclaim against

Steinberg for the loss it incurred by indemnifying the Duffys is

VACATED and REMANDED.    The remainder of the order is AFFIRMED.




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