Case: 17-10622 Document: 00514692248 Page: 1 Date Filed: 10/22/2018

IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT No. 17-10622 United States Court of Appeals Fifth Circuit FILED October 22, 2018 MANSOUR BIN ABDULLAH AL-SAUD, Lyle W. Cayce Plaintiff - Appellee Cross-Appellant Clerk v. YOUTOO MEDIA, L.P.; CHRISTOPHER WYATT, Defendants - Appellants Cross-Appellees Appeals from the United States District Court for the Northern District of Texas USDC No. 3:15-CV-3074 Before HIGGINBOTHAM, DENNIS, and COSTA, Circuit Judges. GREGG COSTA, Circuit Judge:* Mansour Bin Abdullah Al-Saud made a $3 million reimbursable down payment to Youtoo Media, L.P. while he considered whether to purchase a stake in the technology company. When Youtoo’s prospects dimmed and creditors forced the sale of its intellectual property, Al-Saud wanted his $3 million back. Youtoo declined, Al-Saud sued, and a jury found that Youtoo breached the parties’ agreement. The jury also determined that Youtoo’s CEO Chris Wyatt had breached the contract. We affirm that judgment, but remand * 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 R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR.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. Case: 17-10622 Document: 00514692248 Page: 2 Date Filed: 10/22/2018 No. 17-10622 for further consideration of attorneys’ fees under a loan agreement between the parties. I. Youtoo’s technology blended social media and television by allowing viewers to actively participate in broadcasts by sending texts, pictures, and videos that networks could insert into programs. The company also developed a “sweepstakes platform” that would let viewers compete for cash and prizes while watching game shows and sporting events. But to sell the platform to American broadcasters (its ultimate goal), Youtoo felt it had to demonstrate success in other markets, and to do that it needed capital. That search for markets and money brought these parties together. Wyatt discussed initiating Youtoo operations in the Middle East and selling a stake in the company with Al-Saud, who is a member of the Saudi royal family, and his advisor. The parties signed a Letter of Intent (LOI) in October 2013. Al-Saud gave Youtoo $3 million as a down payment to cover its short-term costs and had three months to decide “in his sole discretion” whether to buy a stake in the company. If he declined that option, Youtoo would reimburse the down payment. The LOI also created Youtoo Middle East, a joint venture that would market the company’s interactive platform in the region. The LOI provides that Youtoo’s “general partner is Chris Wyatt (the ‘General Partner’).” And Wyatt signed the agreement on behalf of both Youtoo and “Chris Wyatt as the General Partner” Case: 17-10622 Document: 00514692248 Page: 3 Date Filed: 10/22/2018

No. 17-10622 But registration documents filed with the Texas Secretary of State indicate that Youtoo Management, LLC, not Wyatt, is the General Partner. Though drafts of the LOI mention Youtoo Management as Youtoo’s General Partner, the signed contract does not. Al-Saud ultimately opted against purchasing an interest in the company. But because Wyatt made clear that it needed cash to continue operations— operations that would presumably redound to the benefit of Youtoo Middle East—Al-Saud gave Youtoo an additional $310,000. A March 2014 Facility Agreement memorialized that loan. Despite this move to shore up its finances, Youtoo’s primary lender eventually forced the company to sell its intellectual property and assets to cover outstanding debts. In light of Youtoo’s wind down, Al-Saud asked for his money back. But Youtoo rejected his request for repayment of both the down payment and the loan. For the down payment, it asserted that Al-Saud had agreed to be “reimbursed in full” through the first $3 million in profit distributions from Youtoo’s share in the Middle East entity. As to the loan, the company contended that Al-Saud had agreed to be repaid in services Youtoo performed for Youtoo Middle East.

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No. 17-10622 Unsatisfied, Al-Saud sued for breach of contract. Youtoo counterclaimed for breach of contract, breach of fiduciary duty, and fraud. At trial, the district court dismissed Youtoo’s counterclaims as a matter of law. The jury then found Youtoo and Wyatt liable for breaching the LOI and awarded Al-Saud $3 million in damages for the down payment that was not returned. It also found Youtoo liable for breaching the Facility Agreement but awarded Al-Saud only $6,820 for that claim, which was the interest associated with the loan. Al-Saud sought attorneys’ fees for his success on both claims. The district court allowed him to recover them against Wyatt (but not Youtoo) for the claim that recovered the $3 million down payment, but denied the request for work relating to the Facility Agreement claim. II. Youtoo does not appeal the judgement entered against it for breaching the LOI. Wyatt does, arguing that 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. A. The district court entered judgment against Wyatt based on the jury’s finding that he was individually liable for breaching the letter of intent. Al- Saud’s primary defense of Wyatt’s liability is on this ground. He contends that Wyatt’s signing of the contract as General Partner rendered him liable for the failure to return the down payment. Whether Wyatt could be directly liable under the LOI is a matter of contract interpretation that we review de novo. ^[1] Fort Worth 4th Street Case: 17-10622 Document: 00514692248 Page: 5 Date Filed: 10/22/2018 Case: 17-10622 Document: 00514692248 Page: 6 Date Filed: 10/22/2018 Case: 17-10622 Document: 00514692248 Page: 7 Date Filed: 10/22/2018 Case: 17-10622 Document: 00514692248 Page: 8 Date Filed: 10/22/2018 Case: 17-10622 Document: 00514692248 Page: 9 Date Filed: 10/22/2018 Case: 17-10622 Document: 00514692248 Page: 10 Date Filed: 10/22/2018

No. 17-10622 this is just another way to try and avoid the ban on extrinsic evidence. Although the core focus of the parol evidence rule is excluding the negotiation history of a contract, it also bars other extrinsic evidence such as government records that are inconsistent with the terms of the contract. See Wilson v. Fisher, 188 S.W.2d 150, 152 (Tex. 1945) (prohibiting parol evidence to identify the location of land in a contract, though such evidence would typically be in public records); see also Boyert v. Tauber, 834 S.W.2d 60, 63 (Tex. 1992) (rejecting use of extrinsic evidence to identify the proper broker in real estate contract). To the extent the parties knew the identity of the actual General Partner but mistakenly listed Wyatt, a claim of mutual mistake was the way to correct this error. Absent a claim of mutual mistake, there is nothing unusual about holding Wyatt to the agreement he signed. Indeed, a person could contractually agree to take on the legal obligations of a general partner, even if not legally registered as such. The contract here did just that. A different doctrine—partnership by estoppel—demonstrates the point that official documents do not always control. Under partnership by estoppel, a person who falsely represents herself as a member of a partnership can still be liable as if she were a partner. See Kondos Entertainment, Inc. v. Quinney Elec., Inc., 948 S.W.2d 820, 823 (Tex. App.—San Antonio), rev’d on other grounds, 988 S.W.2d 212 (Tex. 1999); 57 TEX. JUR. 3d Partnership § 27 (2018). Just as failing to legally form a partnership will not always prevent the imposition of liability, failing to legally register as the general partner will not always do so either. And the reliance interests that underlie estoppel also support enforcing the contract the parties signed. Of course, our holding might be different if Wyatt had no notice that the contract designated him General Partner. But Wyatt was on notice because Case: 17-10622 Document: 00514692248 Page: 11 Date Filed: 10/22/2018

No. 17-10622 he signed the LOI directly to the right of the words “Signed for and on behalf of: Chris 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. He thus is derivatively liable for the Youtoo’s obligations under the contract. III. Because we uphold the liability finding as to Wyatt, we must also decide whether the district court erred in awarding attorneys’ fees against him. We review that decision de novo. Brinson Benefits, Inc. v. Hooper, 501 S.W.3d 637, 641 (Tex. App.—Dallas 2016, no pet.). The LOI does not discuss attorneys’ fees, so Al-Saud sought them under Texas law. A party prevailing on a breach of contract claim may recover fees “from an individual or corporation.” TEX. CIV. PRAC. & REM. CODE § 38.001(8). Courts have interpreted “individual” and “corporation” strictly, meaning partnerships like Youtoo are not liable for fees. See Hoffman v. L&M Arts, 838 F.3d 568, 583 n.14 (5th Cir. 2016) (citing Choice! Power, LP v. Feeley, 501 S.W.3d 199, 214 (Tex. App.—Houston [1st Dist.] 2016, no pet.)). The district court found Wyatt directly liable for breach. In light of that, the attorneys’ fees question was straightforward: Wyatt is an individual and therefore falls within the statute’s ambit. Does our reliance on his derivative liability as Youtoo’s general partner change the analysis? Youtoo, a limited partnership, is not answerable for fees. It might seem anomalous if Wyatt were on the hook for fees when the party with the underlying liability is not. And Texas courts have not addressed this situation. But it is a “cardinal law” in Texas that courts construe a statute by first looking to the plain meaning of its words. See Fitzgerald v. Advanced Spine Fixation Sys., Inc., 996 S.W.2d 864, 865 (Tex. 1999). That text here is sparse Case: 17-10622 Document: 00514692248 Page: 12 Date Filed: 10/22/2018

No. 17-10622 but clear: “A person may recover reasonable attorney[s’] fees from an individual or corporation.” TEX. CIV. PRAC. & REM. CODE § 38.001. It does not make the recovery of such fees dependent on the theory of liability imposed. Instead it looks solely to whether that party is an individual or corporation. Whether Wyatt is derivatively or directly liable, he is still an individual. We will therefore affirm the judgment requiring Wyatt to pay fees for the breach of the LOI. IV. We next address whether the district court wrongly entered judgment as a matter of law on Youtoo’s counterclaims. Youtoo alleged that Al-Saud breached the LOI and his fiduciary duties by failing to manage Youtoo Middle East’s operations and fraudulently inducing Youtoo to sign the LOI so Al-Saud could gain control of the joint venture. The district court rejected the counterclaims on the ground that the testimony of Youtoo’s damages expert was too speculative. We review that evidentiary question for abuse of discretion. GIC Servs., L.L.C. v. Freightplus USA, Inc., 866 F.3d 649, 660 (5th Cir. 2017). The Middle East entity never earned a profit. Parties cannot recover anticipated profits when “there is no evidence from which they may be intelligently estimated.” Tex. Instruments, Inc. v. Teletron Energy Mgmt., Inc., 877 S.W.2d 276, 279 (Tex. 1994) (quoting Sw. Battery Corp. v. Owen, 115 S.W.2d 1097, 1098–99 (Tex. 1938)). Those profits must be ascertainable with a reasonable degree of certainty based on objective facts, figures, or data. Meaux Surface Prot., Inc. v. Fogleman, 607 F.3d 161, 170–71 (5th Cir. 2010). That a business is new and unestablished is a consideration in applying the reasonable certainty standard but is not conclusive. Hiller v. Mfrs. Prod. Research Grp. of N. Am., Inc., 59 F.3d 1514, 1518 (5th Cir. 1995); see also Helena Chem Co. v. Wilkins, 47 S.W.3d 486, 505 (Tex. 2001) (holding a lack of Case: 17-10622 Document: 00514692248 Page: 13 Date Filed: 10/22/2018

No. 17-10622 profit history does not preclude a business from recovering lost future profits). Yet the “mere hope of success of an untried enterprise, even when that hope is realistic, is not enough for recovery of lost profits.” Texas Instruments, 877 S.W.2d at 279–80 (mentioning other important factors as well, including the experience of those involved, the nature of the activity, and the relevant market); see also Burkhart Grob Luft und Raumfahrt GmbH & Co. v. E- Systems, Inc., 257 F.3d 461, 467 (5th Cir. 2001) (noting courts have required evidence that a new venture “had a good chance of succeeding” to allow recovery of future profits). The Supreme Court of Texas thus found a lack of reasonable certainty to project damages for a new venture when no working model of the product existed, its viability was in doubt, and the company that was supposed to produce it had never operated at a profit. Texas Instruments, 877 S.W.2d at 280. Many of these problems also characterize Youtoo Middle East. It was a new venture with no history of profitability. The joint venture had few signed agreements with regional broadcasters or governments. Defendants’ damages estimates had to rely in large part on hoped for partnerships, and speculation about the profits those agreements would generate. The profit calculations defendants would have presented at trial were “projections that were presented to investors,” calculations which Texas courts have held insufficient when not supported with more reliable indicators of profitability. See Hernandez v. Sovereign Cherokee Nation Tejas, 343 S.W.3d 162, 174 (Tex. App.—Dallas 2011, pet. denied) (finding lost profit projections based on an investor prospectus insufficient to support a damages award). And though members of Youtoo’s executive team had extensive experience in media and technology, it was not them but Al-Saud who managed Youtoo Middle East. The “evidence” of lost profits was speculative. As such the trial court did not abuse its discretion in excluding it and thus dismissing the counterclaims.

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No. 17-10622 V. Lastly, we consider the district court’s ruling that Al-Saud was not entitled to attorneys’ fees under the Facility Agreement. Unlike the LOI, the Facility Agreement contains an attorneys’ fees provision (section 10): “The Borrower must pay the Lender the amount of all costs and expenses (including legal fees) incurred by it in connection with the enforcement of, or the preservation of any rights under, this Agreement.” Yet the court rejected Al- Saud’s fee request because he did not refer to that provision in the complaint. We review that decision for abuse of discretion. United Indus., Inc. v. Simon- Hartley, Ltd., 91 F.3d 762, 765 (5th Cir. 1996). The boundary separating sufficient and insufficient pleading of requests for fees is ill-defined. See, e.g., id. (holding that merely requesting “costs” is inadequate). A party must at a minimum “put its adversaries on notice that attorneys’ fees are at issue.” Id. Other circuits require specific pleading under Rule 9(g), id. at 764 (collecting cases), which “is designed to inform defending parties as to the nature of the damages claimed in order to avoid surprise; and to inform the court of the substance of the complaint,” Great Am. Indem. Co. v. Brown, 307 F.2d 306, 308 (5th Cir. 1962). In our court, satisfying Rule 9(g) appears to be sufficient but not necessary. United Industries, 91 F.3d at 765 (noting “exceptions to this general rule” of specific pleading). And a pleading defect may be cured by amendment or later notice. See Crosby v. Old Republic Ins. Co., 978 F.2d 210, 211 n.1 (5th Cir. 1992) (finding no error when the court considered a claim for attorneys’ fees, despite the company’s failure to plead special damages, because it advanced that claim during pretrial conferences); 5 CHARLES A. WRIGHT & ARTHUR R. MILLER, FEDERAL PRAC. & PROC. § 1312 & n.3 (noting that the failure to plead special damages bars recovery unless the defect is cured by amendment under Rule 15(b)); see also Henderson v. Montgomery Cty., 1993 WL 560302, at *3–4 (5th Cir. Dec. 30, 1993) (finding Case: 17-10622 Document: 00514692248 Page: 15 Date Filed: 10/22/2018

No. 17-10622 the district court abused its discretion in failing to consider Henderson’s postcomplaint “memorandum” as a motion to amend and not allowing amendment of his claims); Sherman v. Hallbauer, 455 F.2d 1236, 1242 (5th Cir. 1972) (reversing the district court because it did not construe an opposition to summary judgment as a motion to amend the pleadings with respect to Sherman’s theory of the case). It is debatable whether the complaint put Youtoo on notice that Al-Saud was seeking fees if he showed a breach of the Facility Agreement. Its “Breach of Contract” section says that as a “result of Defendants’ breach of the LOI and Facility Agreement, Plaintiff is incurring damages, plus attorneys’ fees” and “all conditions precedent to Plaintiff’s right to recover under the agreements have . . . occurred.” (emphases added). But in the “Attorneys’ Fees” section, Al-Saud requests fees only under the Texas statute. Asking for fees under the statute without also invoking section 10 of the Facility Agreement could be interpreted as a conscious decision to forego them under the latter. As a result, the complaint is not on its own enough for us to find that the court below abused its discretion. But that calculus changes when other filings giving notice are considered. Al-Saud’s motion for summary judgment asserts that he was entitled to recover fees incurred “pursuant to the parties’ contracts and Texas law. App. 18 (§ 10); Tex. Civ. Prac. & Rem. Code. § 38.001.” (emphasis added). Moreover, the Joint Pretrial Order says, “Plaintiff is also entitled to recover his reasonable and necessary attorneys’ fees . . . for breach of the Facility Agreement.” This subsequent material, particularly when considered in combination with language from the complaint, provides sufficient notice. By ignoring these later filings, and our caselaw indicating that they may cure a fee-related pleading defect, the court below abused its discretion.

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No. 17-10622 *** The judgment of the district court is AFFIRMED as to Wyatt’s liability for breach and attorneys’ fees under section 38.001, AFFIRMED as to the dismissal of the defendants’ counterclaims, and REVERSED and REMANDED as to the denial of attorneys’ fees under the Facility Agreement.