Alkane Midstream LLC v. Palmer Johnson Power Systems LLC et al

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Case 7:25-cv-00214-DC-RCG Document 36
Filed 05/15/26 Page 1 of 19
UNITED STATES DISTRICT COURT WESTERN DISTRICT OF TEXAS MIDLAND/ODESSA DIVISION
ALKANE MIDSTREAM LLC, Plaintiff, § §
V.
§ MO:25-CV-00214-DC-RCG
MESA NATURAL GAS SOLUTIONS, §
LLC,
§
Defendant. §
REPORT AND RECOMMENDATION OF THE U.S. MAGISTRATE JUDGE
BEFORE THE COURT is Defendant Mesa Natural Gas Solutions, LLC's Partial Motion to Dismiss. (Doc. 26). This case is before the Court through a Standing Order pursuant to 28 U.S.C. § 636 and Appendix C of the Local Court Rules for the Assignment of Duties to United States Magistrate Judges. After due consideration of the Parties' briefs and the relevant case law, the Court RECOMMENDS Defendant Mesa Natural Gas Solutions, LLC's Motion to Dismiss be GRANTED IN PART and DENIED IN PART. (Doc. 26).
I. BACKGROUND
This action was originally brought against both Palmer Johnson Power Systems LLC d/b/a Alterra Systems ("Alterra") and Defendant Mesa Natural Gas Solutions, LLC ("Defendant Mesa"). (Doc. 1). On September 23, 2025 all claims against Alterra were dismissed without prejudice. (Doc. 22). The case now proceeds against Defendant Mesa only. The remaining dispute concerns claims of fraudulent inducement, fraudulent misrepresentation, and breaches of implied and express warranties stemming from Plaintiff Alkane Midstream LLC's ("Plaintiff") purchase of 19 generator units manufactured by Defendant Mesa. (Doc. 25 at 14-20).
1. All page number citations are to CM/ECF generated pagination unless otherwise noted.
AUTHENTICATED U.S. GOVERNMENT INFORMATION GPO

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The factual allegations are as follows. Plaintiff converts well-site gas into electricity for
remote oilfield operations and requires generator equipment with a proven record of reliability in
harsh field conditions. Id. at 5. Defendant Mesa designs and manufactures “power solutions,”
including the 390kW Natural Gas Generator Set at issue here, which incorporates Defendant
Mesa’s newly released GV22PU engine. Id. at 1, 5. Plaintiff alleges Defendant Mesa’s previous
units used a Hyundai Doosan Infracore engine with PSI fuel controls, while the GV22PU utilizes
a modified engine block that was not previously used in the market nor Defendant Mesa’s
previously released units. Id. at 5. Plaintiff further alleges Defendant Mesa markets its generators
with a “95% run-time guarantee” and sells “small batches” of generators through distribution
partners such as Alterra, to whom Defendant Mesa allegedly directs customers seeking to
purchase fewer than 20 generators. Id. at 5–6.
In October 2023, Alterra, acting as Defendant Mesa’s sales partner and alleged agent,
approached Plaintiff with an aggressive sales pitch for the new generator model. Id. at 6, 10. The
Second Amended Complaint states that, based on Defendant Mesa’s relationship with Alterra,
Plaintiff “understood” Alterra to be authorized to discuss technical information about the
generators and to act on Defendant Mesa’s behalf in selling them. Id. at 6. Plaintiff alleges
Defendant Mesa controlled key sales terms, including pricing and commissions, and Alterra did
not purchase units for resale but instead received a commission from Defendant Mesa upon
customer payment. Id. at 10, 16.
Plaintiff also alleges Defendant Mesa made direct representations concerning the
generator’s testing, field testing history, and reliability. Id. at 7–10, 14–18. For instance, at the
2024 PowerGen International Convention, Plaintiff’s Director of Power Solutions, Sean Stringer
(“Stringer”), met with one of Defendant Mesa’s representatives, Jason Miwa (“Miwa”), at
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Defendant Mesa’s booth. Id. at 7. Stringer expressed concern with the reliability of the
generators’ new engine and stated Plaintiff did not want to be the first company to try the new
product, but Miwa allegedly assured him the generators had operated for “thousands of hours
with customers without issue.” Id. Plaintiff alleges Defendant Mesa directed that any resulting
purchase be made through its partner, Alterra, who was also present at Defendant Mesa’s booth.
Id. at 8.
Less than a month later, Plaintiff’s representatives watched a YouTube video produced
by Defendant Mesa titled “Mesa Solutions Engines,” featuring Defendant Mesa’s employees
discussing the GV22PU engine and Defendant Mesa’s new engine line. Id. at 8–9. In that video,
Defendant Mesa’s employees allegedly emphasized spending hours field testing their units and
its commitment to customer support and “field validation,” and the video assured potential
customers that they would not serve as “guinea pig[s]” for unproven equipment. Id. at 9. Plaintiff
contends these statements reinforced the representations regarding the product’s reliability and
that Plaintiff would not have proceeded with the $5.58 million purchase of 19 generators but for
Defendant Mesa’s assurances regarding extensive field testing and reliability. Id. at 9–10.
Delivery of the generators occurred in August 2024. Id. at 11. Plaintiff alleges that within
weeks of their first use, all 19 units suffered from mechanical or electrical failures, including
tripped tensioner rods, failed turbochargers, fouled catalysts, faulty ECM programming, failed
valve seals, leaking propane vaporizers, O2 sensor failures, oil-flooded combustion chambers,
and scored engine components. Id. Plaintiff contends the scale and uniformity of these defects
demonstrate that these were systemic flaws in design rather than improper use or operation of the
generators by Plaintiff. Id. at 12–13.
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Plaintiff alleges it promptly notified Alterra and Defendant Mesa, but that Defendant
Mesa delayed support, redacted or withheld service documentations, and initially denied any
broader pattern of failure, suggesting the problems were unique to Plaintiff or due to improper
operation of the generators. Id. at 11–12. Plaintiff contends its own investigation revealed that at
least four other customers who purchased the same product from Defendant Mesa experienced
similar issues and comparable failure rates with the same generator model. Id. at 12. Plaintiff
further alleges Defendant Mesa ultimately acknowledged “possible performance issues” related
to the intake manifold and defects in the O2-sensor control logic and offered repairs but no
option to return the generators. Id. at 13. Plaintiff contends these acknowledgments demonstrate
the problems were not isolated to Plaintiff and would have been detected had Defendant Mesa
conducted the extensive field testing it represented. Id. at 13–14.
In sum, Plaintiff contends Defendant Mesa made specific, material misrepresentations
regarding the generators’ testing, field performance, and reliability with the intent to induce
Plaintiff to purchase the units through Defendant Mesa’s strategic partner, Alterra. Further,
Plaintiff actually, justifiably, and detrimentally relied on those statements in entering a
transaction it otherwise would have declined. Id. at 15. Based on these allegations, Plaintiff’s
Second Amended Complaint asserts causes of action for fraudulent inducement, fraudulent
misrepresentation, breach of implied warranty, and breach of express warranty. (Doc. 25 at 14–
19). On February 3, 2026, Defendant Mesa filed the instant Motion to Dismiss arguing Plaintiff
fails to sufficiently plead its claims for fraudulent inducement and breach of express warranty.
(Doc. 26). Plaintiff and Defendant Mesa timely filed their respective Response and Reply.
(Docs. 34, 35). Consequently, the instant matter is ripe for disposition.
II. LEGAL STANDARD
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Federal Rule of Civil Procedure 12(b)(6) allows a party to move for the dismissal of a
complaint for “failure to state a claim upon which relief can be granted.” To survive a motion to
dismiss, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to
relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. A claim for relief must contain: (1) “a
short and plain statement of the grounds for the court’s jurisdiction”; (2) “a short and plain
statement of the claim showing that the pleader is entitled to the relief”; and (3) “a demand for
the relief sought.” FED. R. CIV. P. 8(a). A plaintiff “must provide enough factual allegations to
draw the reasonable inference that the elements exist.” Innova Hosp. San Antonio, L.P. v. Blue
Cross & Blue Shield of Ga., Inc., 995 F. Supp. 2d 587, 602 (N.D. Tex. 2014) (citing Patrick v.
Wal–Mart, Inc.-Store No. 155, 681 F.3d 614, 617 (5th Cir. 2012)); see Torch Liquidating Tr. ex
rel. Bridge Assocs. LLC v. Stockstill, 561 F.3d 377, 384 (5th Cir. 2009) (“[T]he complaint must
contain either direct allegations or permit properly drawn inferences to support every material
point necessary to sustain recovery”) (internal quotation marks and citations omitted).
In a court’s review of a motion to dismiss under Rule 12(b)(6), all factual allegations
from the complaint should be taken as true, and the facts are to be construed in the light most
favorable to the nonmoving party. Fernandez-Montes v. Allied Pilots Assoc., 987 F.2d 278, 284
(5th Cir. 1993). Still, a complaint must contain “more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555.
“‘[N]aked assertions’ devoid of ‘further factual enhancement,’” and “threadbare recitals of the
elements of a cause of action, supported by mere conclusory statements,” are not entitled to the
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presumption of truth. Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557); see R2 Invs.
LDC v. Phillips, 401 F.3d 638, 642 (5th Cir. 2005) (stating that the Court should neither “strain
to find inferences favorable to plaintiffs” nor accept “conclusory allegations, unwarranted
deductions, or legal conclusions.”).
Federal Rule of Civil Procedure 9(b) governs pleading standards for fraud claims,
including state-law fraud claims. Dorsey v. Portfolio Equities, Inc., 540 F.3d 333, 338–39 (5th
Cir. 2008) (“[S]tate-law fraud claims are subject to the pleading requirements of Rule 9(b).”)
(citing Abrams v. Baker Hughes Inc., 292 F.3d 424, 430 (5th Cir. 2002); Williams v. WMX
Techs., Inc., 112 F.3d 175, 177 (5th Cir. 1997)). Rule 9(b) provides: “In alleging fraud or
mistake, a party must state with particularity the circumstances constituting fraud or mistake.”
FED. R. CIV. P. 9(b). “What constitutes ‘particularity’ will necessarily differ with the facts of
each case and hence the Fifth Circuit has never articulated the requirements of Rule 9(b) in great
detail.” Guidry v. Bank of LaPlace, 954 F.2d 278, 288 (5th Cir. 1992). The Fifth Circuit
“interprets Rule 9(b) strictly, requiring the plaintiff to specify the statements contended to be
fraudulent, identify the speaker, state when and where the statements were made, and explain
why the statements were fraudulent.” Flaherty & Crumrine Preferred Income Fund, Inc. v. TXU
Corp., 565 F.3d 200, 207 (5th Cir. 2009). “At a minimum, Rule 9(b) requires allegations of the
particulars of time, place, and contents of the false representations, as well as the identity of the
person making the misrepresentation and what he obtained thereby.” Tel–Phonic Servs., Inc. v.
TBS Int’l, Inc., 975 F.2d 1134, 1139 (5th Cir. 1992).
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III. DISCUSSION
A. Fraudulent Inducement
Defendant Mesa first moves to dismiss Plaintiff’s claim for fraudulent inducement,
arguing: (1) Plaintiff fails to allege the existence of a contract between Plaintiff and Defendant
Mesa; (2) Plaintiff does not allege Defendant Mesa has authority to act on Alterra’s behalf to
induce Plaintiff to enter a contract with Alterra; (3) Plaintiff’s conclusory assertion that Alterra is
Defendant Mesa’s “authorized agent” is insufficient; and (4) Plaintiff’s remaining allegations
establish only a partner-distributor relationship between Defendant Mesa and Alterra, not an
agency relationship. (Doc. 26 at 2). For the reasons explained below, the Court agrees and finds
Plaintiff’s fraudulent inducement claim fails because Plaintiff has not plausibly alleged either a
contractual relationship between Plaintiff and Defendant Mesa or a legally cognizable basis to
impute Plaintiff’s contract with Alterra to Defendant Mesa.
As a preliminary matter, a federal court sitting in diversity must apply the law of the
forum state—in this case, Texas. Harken Exploration Co. v. Sphere Drake Ins. P.L.C., 261 F.3d
466, 470 n.3 (5th Cir. 2001). As previously recognized in the undersigned’s adopted Report and
Recommendation (See Docs. 23, 24), under Texas law, fraudulent inducement is a species of
fraud that “arises only in the context of a contract.” Anderson v. Durant, 550 S.W.3d 605, 614
(Tex. 2018). To state such a claim, a plaintiff must plausibly allege the existence of “a contract
between the parties.” Zaidi v. Shah, 502 S.W.3d 434, 441 (Tex. App.— Houston [14th Dist.]
2016, pet. denied); see Haase v. Glazner, 62 S.W.3d 795, 798–99 (Tex. 2001).
Here, Plaintiff does not allege it entered into any contract with Defendant Mesa. Instead,
the Second Amended Complaint alleges Plaintiff purchased the generators from Alterra, which
Plaintiff describes as Defendant Mesa’s “partner,” “distributor,” or “authorized agent.”
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(Doc. 25 at 10, 16–18). In an attempt to circumvent the absence of contractual privity with
Defendant Mesa, Plaintiff asserts “a third-party or agent may be liable for fraudulent inducement
even where it is not a party to the underlying contract” and that “Mesa can be liable if it shares
an agency relationship with a contracting party” (Doc. 34 at 4) (citing Escopeta Oil & Gas Corp.
v. Songa Mgmt., Inc., No. CIV A 106-CV-386, 2007 WL 171721 (E.D. Tex. Jan. 17, 2007);
River Cap. Advisors of N. Carolina, Inc. v. FCS Advisors, Inc., No. 10-CV-471, 2011 WL
831282, at *6 (E.D. Tex. Feb. 7, 2011)). Under this theory, because Defendant Mesa is the
alleged non-party tortfeasor, Defendant Mesa would have to be acting as the corporate agent of
the actual contracting party—Alterra—for this exception to apply. The Second Amended
Complaint pleads no facts establishing such an agency relationship in connection with the
alleged inducement. See River Cap. Advisors, 2011 WL 831282, at *6, R. & R. adopted, 2011
WL 831186 (E.D. Tex. Mar. 3, 2011) (acknowledging that a third-party agent may be liable for
fraudulent inducement, but only “where the non-party is a corporate agent of the contracting
party or shares similar type agency relationship[]”) (emphasis added).
Plaintiff also cites Indep. Receivables Corp. v. Precision Recovery Analytics, Inc. and
In re Arthur Andersen LLP, in support of this proposition. (Doc. 34 at 5) (citing No. 11-CV-008,
2012 WL 12874526 (W.D. Tex. May 16, 2012); 121 S.W.3d 471, 481 (Tex. App.—Houston
[14th Dist.] 2003, no pet.)). The authorities Plaintiff relies on are not factually analogous. First,
in Escopeta Oil, the contracts alleged to have been fraudulently induced were between the
plaintiff and the defendant, not between the plaintiff and a third party. Escopeta Oil, 2007 WL
171721, at *7–12 (E.D. Tex. Jan. 16, 2007). And although Indep. Receivables Corp. and In re
Arthur Andersen may stand for the broader proposition that a party may be liable for fraud even
if it does not make representations directly to the plaintiff, those cases address fraud and
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fraudulent misrepresentation—not fraudulent inducement of a contract between the plaintiff and
a separate contracting party, as alleged here.
Plaintiff also attempts to recast Alterra as Defendant Mesa’s agent, alleging Defendant
Mesa exercised substantial control over the sales process and over Alterra’s dealings with
Plaintiff, thereby seeking to treat Alterra’s conduct as Defendant Mesa’s own and to impose
fraudulent inducement liability on Defendant Mesa. (See, e.g., Doc. 25 at 16). Specifically,
Plaintiff alleges Defendant Mesa directed sales through Alterra; set the sales price for its
generators; participated in marketing and trade show activities; communicated directly with
Plaintiff regarding the generators; approved product modifications; received proceeds from the
sale; and participated in post-sale warranty and service efforts. Id. at 6, 10–11, 16, 20. Plaintiff
further characterizes Alterra as Defendant Mesa’s agent and asserts “on information and belief”
that Alterra functioned as a “pass-through” entity in Defendant Mesa’s sales structure. (Doc. 34
at 4).
Even accepting these allegations as true, they are insufficient to plausibly establish an
agency relationship. See Coffey v. Fort Wayne Pools, Inc., 24 F. Supp. 2d 671,
678 (N.D. Tex. 1998); Broussard v. San Juan Products, Inc., 273 S.W.3d 400, 403 (Tex. App.—
Beaumont 2008, no pet.). Courts have consistently rejected agency theories in the manufacturer-
dealer context where the plaintiff alleges facts such as control over pricing and marketing
materials, use of distributors as sales channels, payment of commissions, and involvement in
warranty or post-sale services. See Schott Glas v. Adame, 178 S.W.3d 307, 315–17 (Tex. App.—
Houston [14th Dist.] 2005, pet. denied) (concluding that, even where a sales representative
promoted the manufacturer’s products using its samples and promotional materials, regularly
communicated with its marketing manager, provided customer service, and received
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commissions, the evidence was legally and factually insufficient to support a finding of an
agency relationship); Coffey, 24 F. Supp. 2d at 678–80 (holding that designating an “exclusive
dealer,” limiting that dealer’s offerings to the manufacturer’s products, and supplying that dealer
with promotional materials and sales leads was insufficient to establish an agency relationship).
The same is true here. Plaintiff alleges Defendant Mesa “controll[ed] key terms (pricing,
commissions, approvals, etc.),” directed “all sales through Alterra,” co-staffed tradeshow booths,
set sales prices for its generators, paid Alterra a commission, and communicated with both
Alterra and Plaintiff. (Doc. 25 at 10, 16). These allegations reflect a manufacturer-dealer
relationship—not the type of control over the “means and details” of Alterra’s operations
required to establish agency under Texas law. See Adame, 178 S.W.3d at 316; Coffey, 24 F.
Supp. 2d at 677. Plaintiff further relies on allegations made “on information and belief” that
discovery will reveal additional control establishing Alterra as Defendant Mesa’s agent. (See,
e.g., Doc. 25 at 10). Such speculation, however, cannot establish the plausibility required to
withstand a Rule 12(b)(6) challenge, which tests the sufficiency of the pleadings at the time they
are filed. See Irons v. City of Dallas, No. 11-CV-1894, 2012 WL 1986585, at *4 (N.D. Tex. Apr.
4, 2012), R. & R. adopted, 2012 WL 1992113 (N.D. Tex. June 4, 2012) (“Plaintiffs’ allegations
based ‘upon information and belief’ are not sufficient because Plaintiffs are required to allege
facts, not suppositions.”).
Plaintiff’s theory fails for an additional, more fundamental reason tied to the contract
requirement itself. The Second Amended Complaint pleads no facts—beyond Plaintiff’s own
subjective understanding—showing that Alterra entered into the sales agreement in a
representative capacity on Defendant Mesa’s behalf or purported to bind Defendant Mesa as a
principal. Allegations that a party believed it was dealing with an agent do not suffice to impose
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contractual liability on the alleged principal. See Paragon Indus. Applications, Inc. v. Stan
Excavating, LLC, 432 S.W.3d 542, 551 (Tex. App.—Texarkana 2014, no pet.) (“[E]ven though
one of the parties may be operating under a good-faith belief that the person with whom they are
dealing is the agent of another, that fact alone is not enough to bind the purported principal.”);
see also Fan Expo, LLC v. Nat’l Football League, No. 16-CV-763, 2018 WL 1890144, at *6
(Tex. App.—Dallas Apr. 20, 2018, pet. denied) (“[I]n order to establish a party signed as an
agent, the plaintiff must prove that the party indicated that he was signing in a representative
capacity and identified his principal.”). Instead, the Second Amended Complaint describes a
transaction in which Plaintiff contracted with—and purchased the generators from—Alterra,
alleging only that Defendant Mesa would benefit from that sale. (Doc. 25 at 15, 20). But a
nonparty’s receipt of a benefit from a contract does not render it liable on that contract. See
Focus Direct, Inc. v. Sekulow, No. 02-CA-1175, 2003 WL 22143281, at *1 (W.D. Tex. Sept. 5,
2003). Thus, the pleaded facts reflect that Alterra contracted in its own capacity, not as a
representative of Defendant Mesa, and they do not establish Defendant Mesa was a party to or
bound to the agreement. Accordingly, Plaintiff’s allegations are insufficient to state a claim for
fraudulent inducement against Defendant Mesa.
Plaintiff argues dismissal of its fraudulent inducement claim “would permit Mesa to
participate in the sales process, directly make fraudulent statements to the potential buyer, and
completely escape liability.” (Doc. 34 at 6–7). That concern does not alter the Court’s analysis.
As discussed above, fraudulent inducement is a contract-based claim that requires a legally
cognizable connection to the underlying agreement, which Plaintiff has not plausibly alleged. See
Zaidi, 502 S.W.3d at 441 (explaining that fraud and fraudulent inducement are distinct causes of
action, and that proof of fraud is not, by itself, sufficient to establish fraudulent inducement).
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Here, Plaintiff does not plausibly allege Defendant Mesa was a party to the contract at issue or
that Defendant Mesa and Alterra stood in a principal-agent relationship with respect to that
contract—whether by Defendant Mesa acting through Alterra as its corporate agent, or by
Alterra acting through Defendant Mesa as its agent with authority to bind Defendant Mesa to the
agreement. Thus, to the extent Plaintiff contends Defendant Mesa made actionable
misrepresentations independent of any contractual relationship, Plaintiff has asserted other fraud-
based causes of action that do not require contractual privity (See, e.g., Doc. 25 at 16), and those
claims are not challenged by Defendant Mesa in the present Motion. In sum, since there is no
agreement between Plaintiff and Defendant Mesa, Plaintiff’s fraudulent inducement claim is not
plausible and should be dismissed. See Beran v. World Telemetry, Inc., 747 F. Supp. 2d 719, 727
(S.D. Tex. 2010).
Accordingly, the Court RECOMMENDS that Defendant Mesa’s Motion to Dismiss be
GRANTED as to Plaintiff’s fraudulent inducement claim (Doc. 26 at 14), and the claim be
DISMISSED WITHOUT PREJUDICE.
B. Breach of Express Warranty
Plaintiff also asserts a claim for breach of express warranty based on alleged statements
that the generators had undergone “hundreds of hours of real-world testing” and an asserted
“95% run-time guarantee.” (Doc. 25 at 19).
To establish a breach of express warranty, a buyer must show “(1) an affirmation or
promise made by the seller to the buyer; (2) that such affirmation or promise was part of the
basis for the bargain, e.g., that the buyer relied on such affirmation or promise in making the
purchase; (3) that the goods failed to comply with the affirmation or promise; (4) that there was
financial injury; and (5) that the failure to comply was the proximate cause of the financial injury
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to the buyer.” Spencer v. BMW of N. Am., LLC, No. 14-CV-00869, 2015 WL 11661765, at *9
(W.D. Tex. Dec. 22, 2015) (citing Lindemann v. Eli Lilly & Co., 816 F.2d 199,
202 (5th Cir. 1987)).
At the outset, Defendant Mesa contends Plaintiff cannot maintain an express warranty
claim absent privity because the generators were purchased through a third-party distributor,
Alterra. (Doc. 26 at 12–13). Some Texas courts have indicated contractual privity is required for
breach of express warranty actions arising from a sales contract. See, e.g., Lujan v. Tampo Mfg.
Co., 825 S.W.2d 505, 511 (Tex. App.—El Paso 1992, no writ) (“Without privity, [the plaintiff]
could have no cause of action for . . . breach of an express warranty.”); Tex. Processed Plastics,
Inc. v. Gray Enterprises, Inc., 592 S.W.2d 412, 417 (Tex. App.—Tyler 1979, no writ) (holding
that a buyer who “was not in privity” with the seller could not recover against that seller for
breach of express warranty). However, courts have also recognized that express warranty
liability may extend to manufacturers who make actionable affirmations of fact directly to end
users, even in the absence of formal contractual privity. See Cerber Prop. sp. z.o.o. S.K.A. v.
Texas Instruments Inc., No. 18-CV-0992, 2019 WL 1432925, at *3 (N.D. Tex. Mar. 28, 2019)
(“[T]here appears to be no bright-line rule regarding privity in breach of express warranty
cases.”); PPG Indus., Inc. v. JMB/Hous. Ctrs. Partners Ltd., 146 S.W.3d 79, 90 (Tex. 2004)
(“[I]f manufacturers make representations or warranties directly to consumers, the latter may sue
directly (despite the absence of privity) for breach of express warranty . . . .”). At the pleading
stage, Plaintiff’s allegations that Defendant Mesa’s representatives made direct representations to
Plaintiff regarding the generators’ performance and reliability are sufficient to survive dismissal
on privity grounds. See Cerber, 2019 WL 1432925, at *3 (finding that resolution of the privity
issue is “better suited for the summary judgment stage”).
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Turning to the alleged warranty statements, Plaintiff first relies on Defendant Mesa’s
representation that the generators had undergone “hundreds of hours of real-world testing” and
had been operated in the field “without issue.” (Doc. 25 at 17, 19). Although the Court
previously found Defendant Mesa’s statement that it “operated the[] Generators in the field for
thousands of hours . . . without issue” was sufficiently factual to support fraud-based causes of
action (Doc. 23 at 12), the breach of express warranty inquiry is distinct. Fraud focuses on
whether a statement is materially false or misleading, whereas a breach of express warranty
claim turns on whether the goods failed to comply with the specific affirmation or promise about
the product’s characteristics. Spencer, 2015 WL 11661765, at *9.
On the current pleadings, Plaintiff neither explains nor suggests how the generators’
alleged defects caused them to fail to conform to Defendant Mesa’s statement that it conducted
“hundreds of hours of real-world testing.” Id.; (Doc. 25 at 19). In other words, a representation
that a product was tested does not describe a product characteristic or performance standard to
which the goods can conform or fail to conform, as required to state a claim for breach of
express warranty. See Charles v. K-Pats., Inc., No. 17-CV-339, 2018 WL 9869532, at *8 (E.D.
Tex. Aug. 10, 2018). Without an identifiable standard of conformity applicable to the goods
themselves, Plaintiff has not plausibly alleged a breach of express warranty on this basis. See
Elanco Products Co. v. Akin-Tunnell, 474 S.W.2d 794 (Tex. Civ. App.—Amarillo 1971) (“If
plaintiff is to recover on an express warranty, it must be grounded upon the failure of the product
to comply with the warranty . . . .”).
Plaintiff also relies on an alleged “95% run-time guarantee” referenced in a prior
publication made by Defendant Mesa. (Doc. 25 at 19). Unlike the generalized testing statements,
this representation constitutes a concrete performance assurance that can function as an express
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warranty under Texas law. See Med. City Dallas, Ltd. v. Carlisle Corp., 251 S.W.3d 55,
60 (Tex. 2008) (“Any affirmation of fact or promise made by the seller to the buyer which relates
to the goods . . . creates an express warranty that the goods shall conform to the affirmation or
promise.”). Defendant Mesa contends the statement predates the development of the specific
generator model purchased by Plaintiff and therefore cannot apply to the goods at issue.
(Doc. 26 at 17). But Plaintiff has plausibly alleged otherwise. Plaintiff represents that the
challenged statement remained publicly available on Defendant Mesa’s website at the time of the
sale and remains there today; that the guarantee is not limited by product line, model, or date but
instead applies broadly to Defendant Mesa’s natural gas generators; and that the generators at
issue are natural gas generators to which the guarantee’s plain language applies. (Docs. 25 at 19–
21; 34 at 8–9).
At the pleading stage, the Court must accept these allegations as true and draw all
reasonable inferences in Plaintiff’s favor. Aeritas, LLC v. Off. Depot, LLC, No. 22-CV-00986,
2024 WL 1336487, at *2 (W.D. Tex. Mar. 28, 2024), R. & R. adopted, 2024 WL 1624734
(W.D. Tex. Apr. 15, 2024). Taking Plaintiff’s allegations as true, a reasonable buyer could
understand a publicly available, unqualified “95% run-time guarantee” for natural gas generators
to apply to the natural gas generators Defendant Mesa was selling at the time of purchase.
(Doc. 25 at 19). Whether Defendant Mesa subjectively intended the guarantee to apply only to
older models, or whether Plaintiff actually relied on the statement, are questions of fact
inappropriate for resolution at this stage. Plaintiff further alleges the generators experienced
widespread mechanical and electrical failures shortly after delivery. (Doc. 25 at 11–12). When
viewed in conjunction with the alleged “95% run-time guarantee,” those allegations are
sufficient at this stage to state a plausible claim for breach of express warranty under Rule
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12(b)(6). See W. Plains, LLC v. Pneumat Sys., Inc., No. 20-CV-0572, 2020 WL 11564114, at *3
(S.D. Tex. Dec.18, 2020) (finding allegations of specific performance promises,
nonperformance, and resulting loss sufficient to state a plausible express‑warranty claim at the
pleading stage).
Accordingly, the Court RECOMMENDS that Defendant Mesa’s Motion to Dismiss be
GRANTED as to Plaintiff’s breach of express warranty claim premised on Defendant Mesa’s
representation that the units had undergone “hundreds of hours of real-world testing”
(Doc. 26 at 15), and DENIED as to Plaintiff’s breach of express warranty claim premised on
Defendant Mesa’s guarantee of a “95% run-time.” (Doc. 26 at 14). The Court further
RECOMMENDS that Plaintiff’s breach of express warranty claim based on the “hundreds of
hours of real-world testing” representation be DISMISSED WITHOUT PREJUDICE.
IV. RECOMMENDATION
In accordance with the above discussion, the Court RECOMMENDS Defendant’s
Partial Motion to Dismiss be GRANTED IN PART and DENIED IN PART. (Doc. 26).
Defendant’s Motion should be GRANTED as to Plaintiff’s claims for fraudulent
inducement and breach of express warranty based on Defendant’s representation that the units
had undergone “hundreds of hours of real-world testing,” and DENIED as to Plaintiff’s claim
for breach of express warranty based on Defendant’s guarantee of a “95% run-time” guarantee.
The Court further RECOMMENDS that Plaintiff’s fraudulent inducement claim and breach of
express warranty claim based on the “hundreds of hours of real-world testing” representation be
DISMISSED WITHOUT PREJUDICE.
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SIGNED this 15th day of May, 2026.
RONALD C. GRIFFIN
UNITED STATES MAGISTRATE JUDGE
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INSTRUCTIONS FOR SERVICE AND NOTICE OF RIGHT TO APPEAL/OBJECT
In the event that a party has not been served by the Clerk with this Report and
Recommendation electronically, pursuant to the CM/ECF procedures of this District, the Clerk is
ORDERED to mail such party a copy of this Report and Recommendation by certified mail.
Pursuant to 28 U.S.C. § 636(b)(1), any party who desires to object to this report must serve and
file written objections within fourteen (14) days after being served with a copy. A party filing
objections must specifically identify those findings, conclusions, or recommendations to which
objections are being made; the District Judge need not consider frivolous, conclusive, or general
objections. Such party shall file the objections with the Clerk of the Court and serve the
objections on all other parties. A party’s failure to file such objections to the proposed findings,
conclusions, and recommendations contained in this report shall bar the party from a de novo
determination by the District Judge. Additionally, a party’s failure to file written objections to
the proposed findings, conclusions, and recommendations contained in this report within
fourteen (14) days after being served with a copy shall bar that party, except upon grounds of
plain error, from attacking on appeal the unobjected-to proposed factual findings and legal
conclusions accepted by the District Judge. Douglass v. United Servs. Auto. Ass’n, 79 F.3d 1415,
1428–29 (5th Cir. 1996).
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