In the matter of Carol Alison Ramsay Rose
- Summarized by Jonathan Batiste , Rensselaer Polytechnic Institute
- 4 months 1 week ago
- Case Type:
- Business
- Case Status:
- Affirmed in part and Reversed in part
- Citation:
- No. 21-40718 (5th Circuit, Oct 17,2025) Published
- Tag(s):
-
- Ruling:
- Texas law requires that parties proffer evidence that allows courts to calculate lost profits with reasonable certainty. Damages cannot be upheld if not based on sufficient evidence or a legally cognizable methodology. Plaintiffs are not entitled to relitigate damages when they had adequate opportunity to present evidence. Debtor threatened to commit an offense by threatening to retain possession of creditor property even after her legal basis for doing so had ceased. The present committing of an offense is not necessary to establish liability. Evidence is needed to establish market value.
- Procedural context:
- Debtor and Creditors sued each other in state court. Debtor then filed for bankruptcy, and the state litigation was removed to the bankruptcy court. The parties appealed to the district court after the bankruptcy court made its decisions. The parties then appealed to the circuit court after the district court made its decisions.
- Facts:
- Carol Rose (“Debtor”) entered into an agreement with Lori and Philip Aaron (“Creditors”) in 2013 whereby Creditors would buy Debtor’s horses and lease her property. Debtor auctioned the horses 10 days after signing the agreement. The business relationship deteriorated soon after the auction, with both parties breaching the agreement. Debtor and Creditors entered into state litigation later that year. Debtor filed for bankruptcy four years later. Debtor also entered litigation with another creditor, Jay McLaughlin. The bankruptcy court found that Debtor breached the agreement, and it awarded Creditors $1,109,000. The district court reversed that finding based on the measure of damages. The circuit court found that the damages did not constitute reliance, restitution, or expectancy damages. Creditors did not proffer evidence that could be used to calculate lost profits with reasonable certainty. The bankruptcy court had found that Debtor violated the Texas Theft Liability Act by threatening to keep Creditors' horses unless they paid $101,948.50. In contrast, her stable keeper’s lien against them was worth only $40,691.18. Creditors paid the full amount, but that did not justify Debtor’s threat. For Creditors’ claim to succeed under the Texas Theft Liability Act, they must show that Debtor’s threat induced them to pay the amount above the lien and that Debtor acted with intent to deprive them of that money. The circuit court remanded the case for additional fact-finding because the evidence regarding inducement and intent is disputed. McLaughlin’s claims against Debtor, stemming from allegations that Debtor refused to sign certificates necessary to register two horses, were not supported by sufficient evidence. Thus, the circuit court remanded the case for further proceedings regarding McLaughlin’s claim.
- Judge(s):
- Elrod, Richman, and Oldham
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