Summary
affirming the granting of summary judgment regarding plaintiff's claim to a contractual right to a bonus
Summary of this case from Hudson v. Village Inn Pancake HouseOpinion
CIVIL ACTION No: 99-1367 SECTION: "D"(5).
April 27, 2000.
Before the court are the following motions:
(1) first "Motion for Summary Judgment" filed by Defendants, Horizon Offshore Contractors, Inc. and H.L.S. Offshore, L.L.C. (collectively "Horizons"); and
(2) second "Motion for Summary Judgment" filed by Horizon.
Plaintiff, Gerald Ashker, filed memoranda in opposition. The motions, set for hearing on Wednesday, April 19, 2000, are before the court on briefs, without oral argument. Having reviewed the memoranda of counsel and the applicable law, the court finds that, on each motion, there are no genuine issues of material fact and Defendants are entitled to Judgment as a matter of law.
I. Background
From the late 1980's to early 1996, Plaintiff was a salesman with International Companies, which was a small pipelay company in LaRose, Louisiana. HLS Offshore, L.L.C, acquired the assets of International Companies effective mid-June 1996, and Plaintiff became an employee of HLS as of that date, continuing in his position as a salesman.
Plaintiff contends that on June 25, 1996, he attended a meeting in Houston where Don Sites, a principal of HLS, promised Plaintiff and two other salesmen that they would be eligible for a bonus pool in the amount of ten percent of HLS' gross revenues for the period June 1996 through June 1997. (Ashker Dep. 64, 71-72)
However, there was one contingency on which this alleged bonus was based. In November 1999, Plaintiff testified in his deposition that the bonus of ten percent of gross revenues would only be paid in the event that the gross revenues for the June 1996 through June 1997 time frame exceeded $30 million:
A. I understood that as of June 18th [1996] when we officially became HLS . . ., from that day forward for the next year, if we exceeded $30 million in gross revenues, there would be a bonus paid on it, . . .
(Ashker Dep. 102; see also 71-72, 78, 85, 87-88, 93, 101-03, 116)
In March 1997, Plaintiff was transferred from his position as a sales associate to human resources. In June 1998, Plaintiff was laid off. Horizon first became aware that Plaintiff believed that he was owed a bonus when he filed the present lawsuit against Horizon in May 1999, alleging breach of contract and tortious and fraudulent misrepresentation.
HLS was reorganized in 1997, and Plaintiff became then employed by Horizon Contractors, Inc. (Ashker Dep. 144-45). The organizational change, and the relationship between HLS and Horizon Offshore Contractors, Inc. is not an issue in this matter.
II. Defendants' First Motion for Summary Judgment
Plaintiff requested and was granted two Rule 56(f) continuances of Defendant's first Motion for Summary Judgment. The Trial date in this matter was chosen back in May 1999, and it is now set for the week of May 15, 2000.
In their first Motion for Summary Judgment, Defendants contend that Horizon did not come close to meeting the $30 million revenue threshold on which Plaintiff's case is based. Rather, Defendants submit (with the supporting the Affidavit of Dale Peltier, the Controller of Horizon) that for the period between June 1996 through June 1997, Horizon's gross revenues were approximately $22 million.
In opposition to this motion, Plaintiff contends that:
Horizon's summary judgment is based on "accrued revenues" from June 1996 thru June 1997. The dispute at issue, however, is "gross sales" not "accrued revenue".
(Plaintiff's Supp. Opp., p. 4).
Plaintiff argues that:
[A]s Mr. Peltier stated in his deposition . . . no revenues would be reported on jobs that had been successfully bid out until the work on those jobs actually began. It should also be noted that Horizon, in its SEC Form 10-K admits to having serious backlogs of jobs that have been successfully bid out in 1996 and 1997 but on which work had not been initiated. These jobs would not appear on Horizon's revenue accrual sheets, as the work had not begun, but would constitute jobs successfully bid out by the sales staff. These figures, many of which may have accrued during the period in question, have not been considered, yet these sales represent in excess of $19 million for the years 1996 and 1997.
(Plaintiff's Org. Opp., pp. 6-7).
In his Supplemental Opposition, Plaintiff attaches a letter from Mary Pearson Hammatt, a certified public accountant, in support of his position that Mr. Peltier fails to consider many of the "sales" jobs which were bid and/or awarded during the relevant period, but for which no actual revenue had accrued by the end of the period in question. (Plaintiff's Supp. Opp., p. 4).
Having reviewed the memoranda and summary judgment evidence, the court concludes that Defendants did not have either $30 million in gross revenues or bids during the relevant time period of mid-June 1996 through mid-June 1997. In reaching this conclusion, the court rejects Plaintiff's challenge to Mr. Peltier's Affidavit that not all of the information was based on Mr. Peltier's personal knowledge. Mr. Peltier's Affidavit clearly reflects that the figures in his affidavit were obtained from Horizon's regularly maintained business records. Further, Mr. Peltier testified in his depositions that his affidavit was based on Horizon's financial statements, which were fully audited by Arthur Anderson. (Peltier Dep I at 174-74; and Peltier Dep. II at 22-23). Thus, the court finds that Mr. Peltier's Affidavit is proper summary judgment evidence.
Plaintiff himself testified in his deposition that the $30 million threshold was based on "gross revenues". (Asker Dep. at 102; see also 71-72, 78, 85, 87-88, 93, 101-03, 116).
Plaintiff also challenges Mr. Peltier's Affidavit in that he analyzed Horizon's "gross revenues" for the subject time periods instead of analyzing "bids that were accepted or submitted" by Horizon during that time period. However, as set forth in the above "Background" section, it was Plaintiff himself who testified in his deposition that the $30 million threshold was based on "gross revenues". Plaintiff will not be allowed to testify one way in his deposition, and then change his allegations in a material way in his opposition memoranda.
Finally, the court finds that there are no inconsistencies in Mr. Peltier's Affidavit. Defendant has adequately addressed the inconsistences alleged by Plaintiff with reference to the deposition of Dale Peltier ( Exhibit A) and Horizon's Revenue Accrual Worksheet ( Exhibit C). (See Defendants' Chart addressing "point-by-point" the alleged inconsistencies, Defendants' Reply Memo., pp. 5-7).
The court next addresses the statement by Plaintiff's "forensic" accountant that "the sales activity for the period ending June 30, 1997 to be $31,993,340." (See Hammatt Letter [dated April 11, 2000] attached to Plaintiff's Supp. Opp. as Exhibit 1). At the outset, the "letter" containing this statement is not proper summary judgment evidence. Further, it is conclusory and provides woefully inadequate explanations for the conclusions reached.
Defendants also argue that the Hammatt letter does not comply with the disclosure requirements of Federal Rule of Civil Procedure 26(a)(2) — Disclosure of Expert Testimony.
The undisputed summary judgment evidence shows that Horizon did not have $30 million in bids accepted or submitted in the time period of June 18, 1996 through June 18, 1997. Rather, the maximum value of bids during this relevant time period was $25.6 million. This figure is derived as follows: $26.4 million (the value of the universe of jobs for Horizon through June 1997), minus $3.1 million (the value of the nine jobs completed before June 18, 1996), plus $2.3 million (the value of the four jobs that were bid before June 18, 1997, but are not reflected on the June 1997 accrual worksheet). (See Defendants' Reply Memo., Exhibit C, Horizon Revenue Accrual Worksheet; Exhibit F, Schedule of Jobs Bid in 1997; Exhibits G H, Depositions of John R. Abadie, Jr.).
Accordingly, Defendants' first Motion for Summary Judgment should be granted.
The court notes that Plaintiff has alleged "spoilation of evidence". But such allegations are generalized and unsupported. Plaintiff has had ample time, with two continuances of the hearing on Defendants' first Motion for Summary Judgment, to come forward with sufficient evidence to defeat summary judgment or raise his spoilation of evidence theory with proper support.
III. Defendants' Second Motion for Summary Judgment
In their second Motion for Summary Judgment, Defendants argue that Plaintiff's contract claim and tort or fraud claim fail as a matter of law. Plaintiff contends that on or about June 26, 1996, Don Sites (then a principal with HLS Offshore L.L.C.) conducted a meeting in Houston, and approximately six other people including Plaintiff, attended. Plaintiff further contends that at this meeting, Mr. Sites made an oral promise to pay 10% of the company's gross revenues in bonuses, which Plaintiff claims meant he would receive $3.8 million. (Plaintiff's Deposition, pp. 64-67, 71-73, 78, 87-88, 95, 99; Complaint, p. 5).Although this alleged promise was made in June 1996, Plaintiff never told anyone at Horizon during his remaining two and one half years with the company that he was owed a bonus. Nor did he ever confirm the promise in writing. Nor did he ever inquire about the bonus. (Plaintiff's Deposition, pp. 112-14, 137-38, 146-48, 169-72, 179-80). Plaintiff did not provide Horizon with notice that he was owed a bonus until he filed this lawsuit — some three years after the alleged promise was made, and some seven months after he left Horizon.
Several months after his position was terminated, Plaintiff was interviewed by attorneys for Horizon who were investigating a claim by another employee (Steve Williams) that he had been promised a bonus in the same meeting at issue in this litigation. Plaintiff concedes that he never told Defendants' counsel that he was owed a similar bonus. (Plaintiff's Dep. at 159).
In his deposition taken after this lawsuit was filed, Plaintiff testified that Mr. Sites, on behalf of the Defendants, told Plaintiff that he and two other salesmen would be eligible for a bonus pool in the amount of ten percent of Defendants' gross revenues for the period June 1996 through June 1997. Plaintiff said he was uncertain whether the several additional salesmen who were hired thereafter in 1996 and 1997 would also be eligible for the bonus pool. Plaintiff further testified that Mike Williams who became Plaintiff's supervisor at HLS, was to have complete discretion regarding whether Plaintiff was to receive any or all of the bonus pool. (Plaintiff's Dep. 64-67, 71-73, 78, 87-88, 93-95, 99)
Only a week after the alleged promise was made, Mr. Sites issued a memorandum (dated July 2, 1996) which set forth that: he was just beginning to consider a "first-cut" at a bonus plan; he was considering a maximum bonus pool of $150,000; the bonus would be contingent on Defendants' profitability; and the plan would have to undergo revision before it became final. (Defendants' Exhibit B). Clearly, this memorandum does not support the oral promise Plaintiff alleges Mr. Sites made to him.
Contract Claim
Whether the court applies Louisiana law or Texas law to the facts of this case, the court concludes that Plaintiff's contract claim must be dismissed as a matter of law for two reasons. First, the alleged terms of the promise are too indefinite. Plaintiff's share of the alleged bonus is incapable of determination because the amount was left completely up to the discretion of Mike Williams. Also, Plaintiff was unable to say with any certainty which individuals would be eligible for the bonus. Thus, a factfinder would be left to speculation and guessing to quantify what if anything was owed to Plaintiff.
Both Louisiana and Texas have relationships to this case. Louisiana is the place of Plaintiff's domicile, the place where he was to perform under the alleged contract, and the place where the alleged injury occurred. Texas is the place of the Defendants' domicile, and the place where the contract was allegedly formed.
See e.g. TAC Amusement Co. v. Henry, 238 So.2d 398 (La.App. 4th Cir. 1970) (quality and quantity of the object of one party's obligation was too indeterminate and thus the other party's obligation was unenforceable); Sweeney v. Pop eyes Famous Fried Chicken, Inc., 427 So.2d 464 (La.App. 5th Cir. 1983) (contract invalid because the object of the contract was too uncertain); Moore v. Dilworth, 179 S.W.2d 940, 942 (Tex. 1944) (agreement is unenforceable where it is so indefinite as to make it impossible for the court to fix the legal obligations and liabilities of the parties); University Nat'l Bank v. Ernst Whinney, 773 S.W.2d 707, 710 (Tex.Ct.App. 1989) (same).
Second, the alleged promise, even if it was ever made, does not establish consent to contract. At best, it was merely a unilateral statement gratuitously made and expressing a hope of what might possibly occur in the future. The statement, allegedly made during a meeting of Defendants' sales staff, was not a bargained for exchange. Plaintiff conceded in his deposition that "Mr. Sites came out of the blue with the plan, there was no negotiations." (Plaintiff's Dep. at 116).
A valid contract requires consent. Wallace v. Shreve Memorial Library, 79 F.3d 427, 430 n. 4 (5th Cir. 1996), citing Keller v. Sisters of Charity, 597 So.2d 1113, 1115 (La.App. 2d Cir. 1992); Light v. Centel Cellular Co., 883 S.W.2d 642, 644-45 (Tex. 1994).
Tort/Fraud Claim
With regard to Plaintiff's tort/fraud claim, Plaintiff alleges that Defendants "tortiously and fraudulently misrepresented its intention to pay the percentage sales bonuses as promised in order to induce the salespersons to generate more income for the company." (Complaint, ¶¶ XIX). Under Louisiana Civil Code Article 3492 which provides for a one-year prescriptive period for delictual actions, the court concludes that Plaintiff's tort/fraud claim is prescribed. Plaintiff did not file this suit until May 1999; yet he knew or should have known that he would not receive the bonus more than a year before he filed suit.
The Louisiana law of prescription would apply even if Texas substantive law applied to Plaintiff's tort/fraud claim, unless "maintenance of the action in this state is warranted by compelling considerations of remedial justice." La.Civ. Code Art. 3549. Here, Plaintiff has failed to demonstrate any "compelling considerations of remedial justice", and Plaintiff could have easily filed this suit in Texas.
Further, under Texas law, when a Plaintiff's claim is premised on a Defendant's failure to live up to a promise, an independent tort claim is not recognized. Southwestern Bell Tel. Co. v. Delanney, 809 S.W.2d 493, 494 (Tex. 1991). Here, according to Plaintiff's own Complaint, the alleged tort related directly to the Defendants' misrepresentations regarding payment of the "sales bonuses as promised". (Complaint, ¶¶ XIX). Thus, Plaintiff's tort allegation is not independent of the contract claim, and because Plaintiff's contract claim will be dismissed, so must his tort/fraud claim. Gold Kist,. Inc. v. Carr, 886 S.W.2d 425, 432 (Tex.Ct.App. 1994).
Under both Louisiana and Texas law, a fraud claim also requires proof of reliance by Plaintiff. Here, Plaintiff has offered no proof of reliance on whatever Mr. Sites allegedly promised.
Accordingly, Defendants' second Motion for Summary Judgment should be granted.
Because Plaintiff's contract claim and tort/fraud claim will be dismissed through summary judgment, Plaintiff's claim for punitive damages is moot.
IV. Conclusion
For the reasons set forth above,IT IS ORDERED that Defendants' first and second Motions for Summary Judgment be and are hereby GRANTED, dismissing all of Plaintiff's claims against Defendants.