The U.S. Court of Appeals for the Fifth Circuit has affirmed a 2017 jury verdict that awarded $3 million to a member of the Saudi royal family in a breach of contract dispute.
After a federal trial in Dallas last April, a jury ordered Irving-based Youtoo Media and its general partner, Christopher Wyatt, to pay Prince Mansour Bin Abdullah Al-Saud of the Kingdom of Saudi Arabia $3 million for his lost investment in a social television network platform the two parties were collaborating on. The verdict also shot down the defendants’ $6 million counterclaim against the prince.
U.S. District Judge Samuel Ray Cummings of the Northern District of Texas affirmed the jury’s verdict.
The defendants did not appeal Youtoo’s liability on the $3 million judgment, but did appeal Wyatt’s, arguing the agreement “did not make him directly liable for the down payment and that he cannot be derivatively liable as Youtoo’s general partner because the contract is mistaken in saying he held that position,” the Fifth Circuit’s opinion says.
In a 15-page opinion, written by U.S. Circuit Judge Gregg Costa, the Fifth Circuit ruled Monday that Wyatt’s signature on the contract did not make him individually liable, but because the contract designated him as the general partner, he is individually liable due to that nuance of the written agreement.
The three-judge panel also included Circuit Judges Patrick Higginbotham and James Dennis.
The defendants had argued that Youtoo Management, LLC, not Wyatt, was the general partner. However, the Fifth Circuit pointed out, the final contract that Wyatt and Prince Mansour signed designated Wyatt as the general partner.
“The contract says Wyatt was the General Partner. The parol evidence rule prevents Wyatt from now trying to change that,” the Fifth Circuit’s opinion says. “He is thus derivatively liable for Youtoo’s obligations under the contract.”
In an email, Dallas Carrington Coleman partner Ken Carroll, who led the appeal for Youtoo and Wyatt, said the defense team was “pleased the court found that Mr. Wyatt was not directly liable under the contract, individually. But, as you might expect, we’re disappointed with the ultimate judgement.”
The Fifth Circuit also reversed and remanded the trial court’s decision to not award Prince Mansour’s attorneys’ fees since he failed to bring it up in his complaint.
“The complaint is not on its own enough for us to find that the court below abused its discretion,” the opinion says. “But that calculus changes when other filings giving notice are considered.”
The Fifth Circuit then points out that Prince Mansour asserted in his motion for summary judgment that he was entitled to recover attorneys’ fees “pursuant to the parties’ contracts and Texas law.” Moreover, the joint pretrial order states that the plaintiff is entitled to recover attorneys’ fees.
“This subsequent material, particularly when considered in combination with language from the complaint, provides sufficient notice,” the opinion says. “By ignoring these later filings, and our caselaw indicating that they may cure a fee-related pleading defect, the court below abused its discretion.”
In an email, Dallas attorney Mike Lynn, who represented the prince at trial, expressed his gratitude for the Fifth Circuit opinion.
“I am happy not only because of the win we can chalk up, but to the fact that a Saudi prince chose Dallas to try a commercial case at a moment in history when Trump had created a lot of antagonism to Muslims; when many in the Northern District have relatives or close friends who have served in the Middle East; when 9/11 remains fresh on people’s memories; and when a prince – no matter the nationality – is probably thought to be rich, privileged and mysterious,” Lynn said.
Lynn then tipped his hat to his law partners at Lynn Pinker Cox & Hurst who led the case to a victory.
“What a wonderful result, which could not have been achieved without David Coale and John Volney.”
Volney played a significant role at the trial level, while Coale led the appeal.
At trial, Youtoo and Wyatt were represented by Dallas attorneys Bruce Collins, Carrington Coleman’s managing partner, and Sam Joyner, who left Carrington Coleman last year to join intellectual property and business litigation firm Shore Chan DePumpo.
To read more about Prince Mansour and Youtoo’s business dispute, check out The Texas Lawbook’s previous report here, which included an exclusive interview with the prince right after the jury verdict.