Opinion
Civil Action No. 3:02-CV-2426-L.
July 27, 2004
MEMORANDUM OPINION AND ORDER
Before the court are Plaintiffs' Motion for Partial Summary Judgment, filed February 3, 2004; and Defendants' Motion for Summary Judgment, filed February 4, 2004. After careful consideration of the motions, responses, replies, summary judgment evidence, and the applicable law, the court denies Plaintiffs' Motion for Partial Summary Judgment, and grants Defendants' Motion for Summary Judgment.
I. Factual Background and Procedural History
Plaintiff Jaime Garcia and his spouse, Plaintiff Maria Luisa Garcia, are Hispanic and native Spanish speakers. Mr. Garcia is a former employee of Defendant LumaCorp, Inc. ("LumaCorp"). LumaCorp manages multifamily residential units in the Dallas area, including the Villages of Meadow West Apartments ("Meadow West"), an apartment complex owned by MDWR, Ltd. LumaCorp employs individuals to carry out its managerial responsibilities, including maintenance at the apartment complexes it manages.
Plaintiffs allege in their First Amended Complaint ("Plaintiffs' Complaint") that Mr. Garcia only speaks and reads Spanish; however, the Complaint is not verified, and the allegation is not supported by competent summary judgment evidence. The summary judgment evidence establishes that when Mr. Garcia applied for work at LumaCorp, he completed an Employment Application on which he indicated that he could "read," "speak," and "write" both English and Spanish. See Defs.' App. in Supp. of Mot. for Summ. J. ("Defs.' App.") at 123.
At all times relevant to these proceedings, LumaCorp was a nonsubscriber under the Texas Workers' Compensation Act. Instead of opting into the statutory workers' compensation scheme, LumaCorp adopted an Employee Injury Benefit Plan, effective July 1, 1993 (the "Benefit Plan"), to provide eligible employees with, inter alia, medical disability and wage replacement benefits in the event they sustained a work-related injury. James R. Mattingly, who is the President of LumaCorp, was the Plan Administrator. Under the 1993 Benefit Plan, the "Benefit Entitlement Period" began "on the day the Participant suffer[ed] a Work-Related Injury," and ended on the "earlier of: (1) the date the Approved Treating Physician determines that no further medical treatment is necessary or advisable; (2) the date the Participant's employment is terminated for cause; or (3) the date of the Participant's death." Defs.' App. at 60. The maximum cumulative medical and wage replacement benefits available under the 1993 Benefit Plan to any one Participant because of a work-related injury was $100,000.
The Benefit Entitlement Period is defined under the Benefit Plan as the period in which any benefit under the Plan is provided.
In January 1994, LumaCorp amended the Benefit Plan to include the following provision:
Section 4.2 Election to Participate and Waiver of Claims. Effective for Employees who become employed by [LumaCorp, Inc.] on and after January 1, 1994, it will be a condition of participation in this Plan that such Employees execute a voluntar[y] election form signifying his or her desire to participate in the Plan. Such election form shall contain an irrevocable and unconditional waiver and release of any and all causes of action, whether existing or arising in the future, that the Employee may have against [LumaCorp, Inc.] . . . that arise out of or are related to injuries . . . sustained by the Employee in the course and scope of the employment of the Employee by [LumaCorp]. The election form shall also state that the Employee, by execution of said form, will lose the right to sue [LumaCorp], any entity [LumaCorp] is performing services for and people employed by either their officers, directors, shareholders, agents and employees in connection with injuries . . . sustained during the course and scope of the Employee's employment; and further, that the Employee's sole remedy for such injuries or death will be benefits under the Plan.
Defs.' App. at 45.
Mr. Garcia began his employment with LumaCorp on August 6, 1998, as a porter at the Highland Crest Apartments. On June 15, 1999, Mr. Garcia was transferred to the position of assistant maintenance worker and Service Technician and assigned to work at Meadow West. Shortly after he began his employment with LumaCorp, Mr. Garcia signed, on August 17, 1998, an election to participate in LumaCorp's employee benefit plan. That election form provided:
BY EXECUTION OF THIS DOCUMENT, I HEREBY VOLUNTARILY ELECT TO PARTICIPATE IN THE . . . OCCUPATIONAL BENEFITS PLAN (the " PLAN").
AS REQUIRED BY THE TERMS OF THE PLAN, THE UNDERSIGNED HEREBY IRREVOCABLY AND UNCONDITIONALLY RELEASES AND WAIVES ANY AND ALL CLAIMS OF ACTION, WHETHER NOW EXISTING OR ARISING IN THE FUTURE, THAT THE UNDERSIGNED MAY HAVE AGAINST . . . LUMACORP, INC. . . . THAT ARISE OUT OF OR ARE RELATED TO INJURIES . . . SUSTAINED BY THE UNDERSIGNED IN THE COURSE AND SCOPE OF THE EMPLOYMENT OF THE UNDERSIGNED BY . . . LUMACORP, INC.
I UNDERSTAND THAT BY EXECUTION OF THIS DOCUMENT, I WILL LOSE THE RIGHT TO SUE . . . LUMACORP, INC. . . . IN CONNECTION WITH INJURIES . . . SUSTAINED DURING THE COURSE AND SCOPE OF MY EMPLOYMENT WITH . . . LUMACORP, INC.; AND, FURTHER, THAT MY ONLY REMEDY WILL BE TO RECEIVE BENEFITS UNDER THE PLAN.
EXECUTION OF THIS DOCUMENT INVOLVES THE WAIVER AND RELEASE OF VALUABLE RIGHTS.
Pls.' Compl. (Ex. "B"); App. for Pls.' Mot. for Partial Summ. J. (Pls.' App.) at 13. The election form was not written in Spanish.
On October 23, 2000, Mr. Garcia sustained a work-related injury when a solution of chlorine and water he was mixing exploded in his face. Mr. Garcia suffered chemical burns to his face, head and body, and a cerebral injury as a result of his exposure to the chlorine solution.
The specific facts concerning how and why this accident occurred are in dispute. Plaintiffs allege that Mr. Garcia was preparing to clean the pool at Meadow West when he informed his supervisor that the pool chlorine was "old"; that his supervisor instructed him to go ahead and use the chlorine; and that while in the process of mixing the pool cleaning chemicals (powdered chlorine and water), the solution exploded in his face. Defendants, on the other hand, dispute that the age of the chlorine affected its volatility, or that the age of chlorine makes it more volatile or explosive. They maintain that the circumstances under which chlorine can become explosive are when chlorine is in a bucket and then water is added to it or when granular chlorine is mixed with chlorine in tablet form. They further contend that the proper manner in which chlorine should be mixed is that water should be added to the bucket first and then chlorine added. They contend that if chlorine is placed in the bucket first and then water added, an explosion could result, especially if air is trapped in the chlorine. Defendants maintain that the explosion in this case was caused because Mr. Garcia's improperly placed pool chlorine in a bucket without first putting water in the bucket.
At the time of Mr. Garcia's injury, the 1993 Benefit Plan was in effect, and he began receiving benefits under that Plan for both wage replacement and medical treatment. Approximately four months after Mr. Garcia's injury, LumaCorp, on February 16, 2001, instituted a new benefit plan for its employees injured on the job, namely, the "LumaCorp, Inc. Occupational Injury Benefit Plan," which had an effective date of December 1, 2000 (the "New Benefit Plan"). As with the previous Benefit Plan, Mattingly was also the Plan Administrator for the New Benefit Plan, which, among other things, increased the aggregate amount of benefits available to an eligible employee for a work-related injury from $100,000 to $1,000,000. In addition, the New Benefit Plan revoked and terminated all other previous employee benefit plans established by LumaCorp. Specifically, the New Benefit Plan provides:
11.13 Revocation of All Plans: By adopting this Plan, the Employer revokes and terminates all other plans, agreements, or arrangements of any nature whatsoever whereby any Employee may be entitled to receive any benefits as a result of a job-related Injury or Death.
LumaCorp processed the medical invoices for Mr. Garcia's medical services and submitted them to Providence Risk Insurance Services ("Providence Risk"), a third-party administrator. LumaCorp paid the provider bill, and Providence Risk, after determining whether they were payable under the 1993 Benefit Plan, forwarded the invoices to Reliance National, the insurance provided selected by LumaCorp to secure payment of the Benefit Plan, for subsequent reimbursement to LumaCorp.
Defs.' App. at 103. Under the New Benefit Plan, the term "Coverage Period" means "the period of time within which benefits are payable to Participants. The coverage period begins on the date the Injury occurred or disease diagnosis is made. A separate Coverage Period will start for each Injury or disease diagnosis." Id. at 87. Mr. Garcia was not required to sign any documents to become covered under the New Benefit Plan after the previous benefit plan was revoked and terminated.
In April 2001, Mr. Garcia's medical bills began to exceed the $100,000 maximum benefit amount allowed under the 1993 Benefit Plan. In May 2001, LumaCorp received correspondence from Providence Risk stating that: "no further reimbursement can be considered without the pre-approval from Reliance National via Providence Risk, as the combined single limit has been exceeded in this matter." By this time, LumaCorp had already paid additional medical bills for which it had not been reimbursed, and Mr. Garcia had outstanding medical bills in the amount of $14,441.96.
Mr. Garcia remained an employee of LumaCorp and received medical disability and wage replacement benefits from October 30, 2000 until October 31, 2001. On October 23, 2001, Mattingly, along with two other LumaCorp employees, namely, Rick Moncibais and Kelly Young, presented Mr. Garcia with a proposed Settlement Agreement and Release and Compromise of Claims ("Settlement Agreement"), which was written entirely in English. The settlement discussion occurred at Mr. Garcia's home when only he and his wife were present. Mattingly explained to Mr. Garcia the terms of the Settlement Agreement, including the release language, and informed him that he had exhausted his benefits under the 1993 Benefit Plan, and that there could be no further payments under the Benefit Plan. He further stated that LumaCorp would pay his then outstanding medical bills in the amount of $14,441.96, plus an additional $10,000 if he would sign the Settlement Agreement. Mr. Moncibais, who is fluent in English and Spanish, translated this information to Mr. Garcia in Spanish. Thereafter, Mr. Garcia signed the Settlement Agreement that same day. Pursuant to the terms of the Settlement Agreement, Mr. Garcia agreed to release all claims against LumaCorp and MDWR arising out of his work-related injury, in exchange for Defendants paying his then outstanding medical bills and an additional $10,000.
Rick Moncibais serves as LumaCorp's Director of Service. Kelly Young is an Executive Assistant at LumaCorp.
A little over a year after Mr. Garcia signed the Settlement Agreement, Plaintiffs brought this lawsuit on November 6, 2002, alleging federal and state law claims against LumaCorp and LumaCorp, as agent for MDWR for gross negligence, loss of consortium, fraud, fraud in the inducement, intentional infliction of emotional distress, race discrimination under 42 U.S.C. § 1981, public policy violations, wrongful termination, breach of fiduciary duty under ERISA and common law, breach of contract, failure of consideration, and declaratory judgment. Plaintiffs now move for partial summary judgment on their claims of gross negligence, loss of consortium, fraud, fraud in the inducement, and intentional infliction of emotional distress. Defendants move for summary judgment on all of Plaintiffs' claims.
II. Summary Judgment Standard
Summary judgment shall be rendered when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986); Ragas v. Tennessee Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998). A dispute regarding a material fact is "genuine" if the evidence is such that a reasonable jury could return a verdict in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). When ruling on a motion for summary judgment, the court is required to view all inferences drawn from the factual record in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986); Ragas, 136 F.3d at 458. Further, a court "may not make credibility determinations or weigh the evidence" in ruling on motion for summary judgment. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000); Anderson, 477 U.S. at 254-55.
Once the moving party has made an initial showing that there is no evidence to support the nonmoving party's case, the party opposing the motion must come forward with competent summary judgment evidence of the existence of a genuine fact issue. Matsushita, 475 U.S. at 586. Mere conclusory allegations are not competent summary judgment evidence, and thus are insufficient to defeat a motion for summary judgment. Eason v. Thaler, 73 F.3d 1322, 1325 (5th Cir. 1996). Unsubstantiated assertions, improbable inferences, and unsupported speculation are not competent summary judgment evidence. See Forsyth v. Barr, 19 F.3d 1527, 1533 (5th Cir.), cert. denied, 513 U.S. 871 (1994). The party opposing summary judgment is required to identify specific evidence in the record and to articulate the precise manner in which that evidence supports his claim. Ragas, 136 F.3d at 458. Rule 56 does not impose a duty on the court to "sift through the record in search of evidence" to support the nonmovant's opposition to the motion for summary judgment. Id.; see also Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 915-16 n. 7 (5th Cir.), cert. denied, 506 U.S. 832 (1992). "Only disputes over facts that might affect the outcome of the suit under the governing laws will properly preclude the entry of summary judgment." Anderson, 477 U.S. at 248. Disputed fact issues which are "irrelevant and unnecessary" will not be considered by a court in ruling on a summary judgment motion. Id. If the nonmoving party fails to make a showing sufficient to establish the existence of an element essential to its case and on which it will bear the burden of proof at trial, summary judgment must be granted. Celotex, 477 U.S. at 322-23.
III. Analysis
A. Plaintiffs' Motion for Partial Summary Judgment
Plaintiffs move for summary judgment on their claims of gross negligence, loss of consortium, fraud, fraud in the inducement, and intentional infliction of emotional distress. The court addresses these claims in turn.
1. Gross Negligence and Loss of Consortium
With respect to Plaintiffs' claims of gross negligence and loss of consortium, LumaCorp urges the court to deny Plaintiffs summary judgment on the these claims for several reasons. First, LumaCorp contends that Mr. Garcia waived his common-law right to bring such claims by participating in, and accepting payments under, the company's Benefit Plan. Second, Defendants contends that pursuant to the terms of the Settlement Agreement entered into between Mr. Garcia and LumaCorp, Mr. Garcia agreed to release LumaCorp and MDWR from all claims, demands, rights or causes of actions, including, among others, claims for personal injuries, arising from his work-related injury. Third, LumaCorp contends that Plaintiffs have failed to establish a claim of gross negligence by competent summary judgment evidence. Finally, Defendants contend that because Plaintiffs cannot establish their gross negligence claim, they cannot, as a matter of law, prevail on their claims of loss of consortium. The court agrees.
The summary judgment evidence establishes that at the time of Mr. Garcia's injury, LumaCorp was a nonsubscriber under the Texas Workers' Compensation Act, and that it had adopted an Employee Injury Benefit Plan that provided medical disability and wage replacement benefits for eligible employees who chose to participate in the Plan. The evidence further establishes that employees desiring to participate in the Plan were required to sign an election form, which signified the employee's desire to participate in the Plan and agreement to waive and release any and all claims or causes of action against LumaCorp arising out of a work-related injury. The evidence demonstrates that on August 17, 1998, Mr. Garcia signed an election to participate in the Benefit Plan. Mr. Garcia does not contend, nor does the evidence establish, that he was forced to sign the election form under duress or that his decision to participate in the Plan was anything other than voluntary.
In Lawrence v. CDB Servs., Inc., 44 S.W.3d 544 (Tex. 2001), the Texas Supreme Court held that voluntary pre-injury employee elections to participate in a nonsubscribing employer's benefit plan in lieu of exercising common law remedies were not prohibited by law. See id. at 551-53. Although the Texas Legislature subsequently amended the Texas Labor Code to prohibit pre-injury waivers, see Tex. Lab. Code § 406.033, Lawrence governs this case because Mr. Garcia signed a non-subscriber agreement and suffered his injury before September 1, 2001. See Storage Processors, Inc. v. Reyes, 134 S.W.3d 190, 192 (Tex. 2004) (" Lawrence remains the law for those claims . . . brought by workers who both signed non-subscriber agreements and suffered injury before September 1, 2001). Pursuant to the plain language of the election form signed before his injury, Mr. Garcia waived his rights to pursue common law remedies against LumaCorp arising out of his work-related injury. Therefore, Plaintiffs are now barred from pursuing personal injury claims against LumaCorp for gross negligence and loss of consortium, as those claims arise out of Mr. Garcia's work-related injury. Moreover, pursuant to the terms of the Settlement Agreement, Mr. Garcia released LumaCorp from all claims or causes of action arising out of his work-related injury.
Plaintiffs allege in their Complaint that they were urged by employees of LumaCorp to sign the Settlement Agreement. In particular, Plaintiffs contend that Mr. Moncibais indicated to Mr. Garcia that he had to sign the Settlement Agreement immediately and that he could not wait to allow Mr. Garcia's son to return home to read the agreement. These allegations, however, are not supported by competent summary judgment evidence. Although the Settlement Agreement was written in English, there is no evidence in the record to suggest that Mr. Garcia did not understand what he was signing, that he was coerced into signing the document, or that he signed it under duress. To the contrary, the uncontroverted summary judgment evidence demonstrates that Mr. Garcia did not inform anyone that he wanted to rearrange the meeting time because his son was not going to be present; that he did not request to speak with his son; that he was never told that he had to sign the Settlement Agreement at that moment; and that he was not pressured to sign the document.
Even if Plaintiffs' claims of gross negligence and loss of consortium are not barred by the waiver set forth in the election form or the Settlement Agreement, Plaintiffs are not entitled to summary judgment on either of these claims. To prove gross negligence, Plaintiffs must establish that (1) "viewed objectively from the actor's standpoint, the act or omission . . . involve[d] an extreme degree of risk, considering the probability and magnitude of the potential harm to others," and (2) "the actor . . . [had] actual, subjective awareness of the risk involved, but nevertheless proceed[ed] in conscious indifference to the rights, safety, or welfare of others." Mobil Oil Corp. v. Ellender, 968 S.W.2d 917, 921 (Tex. 1998). Plaintiffs have wholly failed to point to any evidence which establishes either of these elements. First, Plaintiffs have failed to establish that the use of "old" chlorine as a pool cleaning agent involves an extreme degree of risk. Second, although Plaintiffs argue that LumaCorp was aware of the danger of using chlorine, they point to no evidence to support this contention, or to any evidence which demonstrates that LumaCorp was actually aware of any risk associated with the use of "old" chlorine to clean pools. Plaintiffs have, therefore, failed to establish the necessary elements to prove a claim of gross negligence, and summary judgment on this claim must be denied.
To support their claim of gross negligence, Plaintiffs point to the allegations in their Complaint that: LumaCorp maintained chemicals for cleaning the pool at Meadow West, which Mr. Garcia used in the normal course of his employment; that Mr. Garcia informed his supervisor, Ms. Barbara Lopez, that the chlorine on site was "old,"; that despite these statements, Ms. Lopez instructed that he use the chlorine; that while in the process of preparing the chemicals (powdered pool chlorine and water), they "exploded" in Mr. Garcia's face; and that Mr. Garcia suffered chemical burns to his face, head and body, and inhaled and swallowed the harmful chemical solution. Plaintiffs also point to the Incident Report taken after the accident which states that the accident could have been prevented by "investigating chlorine." Plaintiffs argue that LumaCorp was aware of the danger of using chlorine, a caustic chemical; and that despite the risk, Ms. Lopez required Mr. Garcia to use chlorine that was old and potentially dangerous. None of these allegations, however, is supported by Mr. Garcia's sworn statement, affidavit or declaration.
Insofar as Plaintiffs' claims of loss of consortium, they are derivative of a spouse's claim for personal injury. See Reagan v. Vaughn, 804 S.W.2d 403, 467 (Tex. 1990). To recover, the spouse must prove that the defendant is liable for the personal injuries suffered by his or her spouse. Id. Here, Mr. Garcia has waived and released any claims that he may have had for gross negligence. Moreover, Plaintiffs have failed to establish by competent summary judgment evidence that they are entitled to judgment on their gross negligence claim. Since Plaintiffs have failed to establish that LumaCorp is liable for Mr. Garcia's alleged personal injuries, they cannot recover on their loss of consortium claims. Plaintiffs' request for summary judgment on their claims of loss of consortium must therefore be denied.
2. Fraud and Fraud in the Inducement
Plaintiffs allege claims against Defendants for fraud and fraud in the inducement. To prevail on a claim of fraud, a plaintiff must prove that (1) the defendant made a material representation that was false; (2) it knew the representation was false or made it recklessly as a positive assertion without any knowledge of its truth; (3) it intended to induce the plaintiff to act upon the representation; and (4) the plaintiff actually and justifiably relied upon the representation and thereby suffered injury. Ernst Young, L.L.P. v. Pacific Mut. Life Ins. Co., 51 S.W.3d 573, 577 (Tex. 2001). Fraudulent inducement is a particular species of fraud that arises only in the context of a contract and requires the existence of a contract as part of its proof. Haase v. Glazner, 62 S.W.3d 795, 798-99 (Tex. 2001). In other words, in a claim of fraudulent inducement, the elements of fraud must be established as they relate to an agreement between the parties.
Defendants argue that Mr. Garcia waived these claims when he elected to participate in LumaCorp's Benefit Plan. The court disagrees. Plaintiffs' fraud claims do not arise out of or relate to the injuries Mr. Garcia suffered on his job; rather, they are based on alleged misrepresentations made to Mr. Garcia by representatives of LumaCorp regarding the availability of benefits under the Benefit Plan. The court, therefore, concludes that these claims have not been waived by Mr. Garcia's election to participate in the Benefit Plan.
In this case, Plaintiffs assert that Defendants made false and or misleading statements to Mr. Garcia to induce him sign the Settlement Agreement to his detriment. In particular, Plaintiffs allege that Mr. Garcia was intentionally given false information on rights available to him under the Benefit Plan. They contend that employees of LumaCorp falsely represented to Mr. Garcia that all of his benefits under the Benefit Plan had been exhausted, when in reality there were benefits available to him under the New Benefit Plan. Plaintiffs contend that although Mr. Garcia was an employee of LumaCorp on December 1, 2000 and February 16, 2001, he was not informed that the old Benefit Plan had been revoked and terminated, or that the New Benefit Plan was retroactive. Plaintiffs contend that had they been informed of the New Benefit Plan, Mr. Garcia would not have signed the Settlement Agreement. Plaintiffs also contend that LumaCorp made the alleged false statements with the intent that Mr. Garcia act on them, as the company would have otherwise been responsible for continuing his benefits under the New Benefit Plan. Mr. Garcia further contends that he relied upon the representations made by Defendants' agents; that he signed the Settlement Agreement to his detriment; and that Defendants have wrongfully benefited by him signing the Settlement Agreement.
The court first notes that Plaintiffs present no evidence to support their allegations that employees of LumaCorp made false representations to Mr. Garcia regarding benefits available under the Benefit Plan. These statements are merely unsubstantiated assertions and speculation. The only evidence regarding the representations made to Mr. Garcia are provided by Defendants through the Affidavit of James Mattingly. According to Mattingly, he explained to Mr. Garcia in English the terms of the Settlement Agreement, including the release language, and that his benefits under the Benefit Plan had been exhausted. Mattingly also informed Mr. Garcia that under the terms of the Settlement Agreement, LumaCorp would pay his then outstanding medical bills. Mr. Moncibais translated this information to Mr. Garcia in Spanish.
Under the Benefit Plan in effect at the time of Mr. Garcia's injury, the maximum cumulative amount of benefits available to any one participant for a work-related injury was $100,000. The summary judgment evidence establishes that at the time Mattingly presented the settlement proposal to Plaintiffs, Mr. Garcia had not only exhausted the benefits allowed under the Benefit Plan, but had received benefits in excess of the maximum amount allowed under the Benefit Plan. Moreover, Mr. Garcia had then outstanding medical expenses in the amount of $14,441, which LumaCorp was willing to pay as part of the Settlement Agreement. While it is true that the New Benefit Plan revoked and terminated the previous Benefit Plan and had an aggregate benefit limit of $1 million, the New Benefit Plan did not take effect until December 1, 2000, more than a month after Mr. Garcia's injury. LumaCorp interpreted the New Benefit Plan to mean that it applied to injuries that occurred after December 1, 2000, and that an employee could not assert a claim under the New Benefit Plan for an injury occurring before that date. Plaintiffs point to no evidence which shows that LumaCorp believed the New Benefit Plan covered, or had been applied to, injuries sustained prior to its effective date. Plaintiffs have failed to establish that Defendants made any false misrepresentations regarding the benefits available to Mr. Garcia under the Benefit Plan, or concerning LumaCorp's agreement to pay his then outstanding medical bills. Plaintiffs are therefore not entitled to judgment as a matter of law on either of their fraud claims, and their request for summary judgment on these claims must be denied.
3. Intentional Infliction of Emotional Distress
Both Plaintiffs assert claims for intentional infliction of emotional distress. In support of these claims, Plaintiffs contend that they were subjected to severe emotional distress as a result of LumaCorp failing to inform Mr. Garcia of the New Benefit Plan and coercing him to sign the Settlement Agreement (which was completely written in English), and by insisting that the Settlement Agreement be signed the same day it was presented to him. Plaintiffs contend that as a result of Defendants' actions, they have suffered sleeplessness, depression, and, in the case of Mrs. Garcia, severe crying episodes. LumaCorp counters that Plaintiffs' claims for intentional infliction of emotional distress fail, as a matter of law, because they cannot demonstrate that LumaCorp engaged in extreme or outrageous conduct. The court agrees.
To prevail on their claim of intentional infliction of emotional distress, Plaintiffs must show that: (1) LumaCorp acted intentionally or recklessly; (2) LumaCorp's conduct was extreme and outrageous; and (3) LumaCorp's conduct caused them severe emotional distress. Randall's Food Mkts., Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex. 1995); Ward v. Bechtel Corp., 102 F.3d 199, 203 (5th Cir. 1997) (citing Twyman v. Twyman, 855 S.W. 2d 619, 621 (Tex. 1993). "Extreme and outrageous conduct" is that which is so extreme in degree, or so outrageous in character, as to go beyond all bounds of decency, to be regarded as atrocious, and utterly intolerable in a civilized community. Id; see also Ugalde v. W.A. McKenzie Asphalt Co., 990 F.2d 239, 243 (5th Cir. 1993) (conduct is "outrageous," for purposes of claim of intentional infliction of emotional distress, "if it surpasses all bounds of decency, such that it is utterly intolerable in a civilized community."). "Liability does not extend to mere insults, indignities, threats, annoyances, or petty oppressions." Ugalde, 990 F.2d at 243.
Here, Plaintiffs' allegations and evidence simply do not rise to the level necessary to show that LumaCorp's conduct is outrageous in the sense that it exceeds all bounds of decency such that it would be totally unacceptable in a civilized society. As previously stated, although Plaintiffs allege that Defendants coerced Mr. Garcia to sign the Settlement Agreement, this allegation is not supported by competent summary judgment evidence. Further, the summary judgment evidence establishes that Mr. Garcia was not given false information regarding his available benefits under the Benefit Plan; rather, he was correctly informed that because he had exhausted his benefits under the Benefit Plan, he was not entitled to receive any more benefits. Plaintiffs have failed to establish that Defendants conduct was so extreme and outrageous as to go beyond the bounds of human decency in a civilized society. See Randall's Food Mkts., 891 S.W.2d at 644. Because Plaintiffs have failed to present evidence to establish, or create a genuine issue of material fact with respect to an essential element, outrageous conduct by LumaCorp, their request for summary judgment on this claim must be denied.
B. Defendants' Motion For Summary Judgment
Defendants move for summary judgment on each of Plaintiffs' claims. With respect to Plaintiffs' claims of gross negligence, loss of consortium, fraud, fraud in the inducement, and intentional infliction of emotional distress, the court determines that, based upon the law as previously discussed herein and the lack of competent summary judgment evidence, Plaintiffs have failed to raise a genuine issue of material fact regarding the essential elements of these claims. Defendants are therefore entitled to judgment as a matter of law. The court now addresses Plaintiffs' remaining claims of discrimination under 42 U.S.C. § 1981, public policy violations, wrongful termination, breach of fiduciary duty under ERISA and common law, breach of contract, failure of consideration, and declaratory judgment in turn below.
1. Discrimination Under 42 U.S.C. § 1981
Plaintiffs contend that Defendants violated Mr. Garcia's rights under 42 U.S.C. § 1981. In particular, Plaintiffs allege that Mr. Garcia is a male of Mexican descent; that LumaCorp was required to provide him with information regarding his employment, benefits and discharge; that LumaCorp was aware of Garcia's limitations with the English language and, therefore, was required to provide him information in Spanish concerning his employee benefits under the Benefit Plan; and that LumaCorp failed to provide such information in Spanish. Plaintiffs also contend that LumaCorp had an employee falsely "interpret" in Spanish a legal document written in English which terminated Mr. Garcia's employment and purported to limit his claims against LumaCorp arising out of his work-related injury; that these actions were taken against Mr. Garcia because of his race or nationality. LumaCorp counters that Plaintiffs' § 1981 claim fails, as a matter of law, because § 1981 provides a cause of action for employment discrimination based on race, not upon issues related to speaking Spanish. Moreover, LumaCorp argues that when Mr. Garcia applied for work, he completed an Employee Application form wherein he indicated that he could "read," "speak," and write English and Spanish.
To establish a § 1981 claim, a plaintiff must show that (1) he or she is a member of a racial minority; (2) that the defendant had intent to discriminate on the basis of race; and (3) that the discrimination concerned one or more of the activities enumerated in the statute; in this case, the making and enforcing of a contract. See Arguello v. Conoco, Inc., 330 F.3d 355, 358 (5th Cir.), cert. denied, 124 S.Ct. 567 (2003); Morris v. Dillard Dep't Stores, Inc., 277 F.3d 743, 751 (5th Cir. 2001); Bellows v. Amoco Oil, Co., 118 F.3d 268, 274 (5th Cir. 1997), cert. denied, 522 U.S. 1068 (1998). Here, Plaintiffs have failed to offer, or point to, any evidence which shows that LumaCorp intentionally discriminated against Mr. Garcia because of his race. Such proof is an essential element of a cause of action under § 1981. Because Plaintiffs have failed to point to evidence which establishes, or creates a genuine issue of material fact, that Defendants intentionally discriminated against Mr. Garcia on account of his race, Defendants are entitled to judgment as a matter of law on Plaintiffs' § 1981 claim.
2. Violations of Public Policy
Plaintiffs contend that the Benefit Plan, as written and implemented by LumaCorp, violates public policy and the intent of the Texas Workers' Compensation Act. LumaCorp disagrees, contending that employee benefit plans, such as the one at issue here, are allowable in Texas and do not violate public policy.
As previously stated, although the Texas Legislature subsequently amended the Texas Labor Code to prohibit pre-injury waivers, see Tex. Lab. Code § 406.033, the Supreme Court's decision in Lawrence governs this case, which held that agreements by workers to limit employers' liability in exchange for benefits under nonsubscriber benefits plans were not prohibited by the Texas Workers' Compensation Act or in violation of public policy. Plaintiffs' claim is therefore unsupportable, and Defendants are entitled to judgment as a matter of law on this claim.
3. Wrongful termination
Plaintiffs contend that Mr. Garcia was terminated in an attempt to deny him plan benefits in violation of Texas law. LumaCorp counters that Mr. Garcia received all the benefits to which he was entitled under the Benefit Plan, and that he was terminated because he never returned to work because of his injury.
Plaintiffs have wholly failed to offer, or point to, evidence which shows that Mr. Garcia was entitled to receive additional benefits under the Benefit Plan. Moreover, Plaintiffs fail to offer, or point to, any evidence which shows, or creates a genuine issue of material fact, that LumaCorp terminated Mr. Garcia to avoid paying him benefits to which he was entitled under any benefit plan. Defendants, on the other hand, have presented competent summary judgment evidence establishing that the reason Mr. Garcia was terminated from his employment was because he never returned to work after his injury. Plaintiffs have failed to create a genuine issue of material fact that Mr. Garcia was terminated by LumaCorp to avoid having to pay him benefits under the Benefit Plan. Defendants are therefore entitled to judgment as a matter of law on Plaintiffs' claim of wrongful termination.
4. Alleged Breach of Fiduciary Duty Under ERISA and common law
Plaintiffs allege that the Plan Administrator breached his fiduciary duty by settling Mr. Garcia's claims for an amount that he knew would be insufficient for him and, in the alternative, by failing to provide a safe work place environment. Plaintiffs present no evidence to establish that the Plan Administrator breached any fiduciary duty under the Benefit Plan. Defendants are entitled to judgment as a matter of law on these claims.
5. Breach of Contract
Plaintiffs contend that LumaCorp is bound to proceed to arbitration of all employment injury matters, but has failed and refused to do so. LumaCorp counters that this claim fails, as a matter of law, because the applicable Benefit Plan does not provide for arbitration of claims. The court agrees.
The summary judgment evidence establishes that the Benefit Plan in effect at the time of Mr. Garcia's injury did not contain an arbitration provision. The arbitration provision to which Plaintiffs refer is contained in the New Benefit Plan, which did not take effect until December 1, 2000. As stated before, because Mr. Garcia's injury occurred prior to the effective date of the New Benefit Plan, his work-related injury was not covered under that Plan. Plaintiffs have failed to raise a genuine issue of material fact that the arbitration provision about which they complain is applicable to the facts of this case, or that Defendants had an obligation to arbitrate Plaintiffs' claims under the Benefit Plan. Defendants are entitled to judgment as a matter of law on Plaintiffs' breach of contract claim.
6. Failure of Consideration
Plaintiffs contend that the $10,000 amount offered under the Settlement Agreement was insufficient consideration for Mr. Garcia to waive and release all of his rights and claims against LumaCorp, given that he had incurred, and was likely to incur, medical bills and lost wages far in excess of the settlement amount. LumaCorp counters that Mr. Garcia had already received all of the benefits to which he was entitled under the Benefit Plan, and thus waived no rights related to that Plan. LumaCorp further contends that consideration for the agreement was not insufficient.
Although Plaintiffs characterize their claim as one for "failure of consideration," they do not assert facts consistent with this type of claim as it is recognized under Texas law. Under Texas law, failure of consideration is recognized as an affirmative defense to an action on a written agreement. See Nat'l Bank of Commerce v. Williams, 84 S.W.2d 691, 692 (Tex. 1935); see also Parker v. Dodge, 98 S.W. 3d 297, 301 (Tex.App. — Houston [1st Dist.] 2003, no pet); Gensco, Inc. v. Transformaciones Metalurgicias Especiales, S.A., 666 S.W.2d 549, 553 (Tex.App.-Houston [14th Dist.] 1984, writ dism'd). Generally, failure of consideration occurs when, because of some supervening cause after the agreement is reached, the promised performance fails. Parker, 98 S.W. 3d at 301; O'Shea v. Coronado Transmission Co., 656 S.W.2d 557, 563 (Tex.App. — Corpus Christi 1983, writ ref'd n.r.e.); see also Matter of Topco, Inc. v. Webb, 894 F.2d 727, 742 (5th Cir. 1990). Plaintiffs cite no Texas case that recognizes a claim for failure of consideration in the context asserted by them. Moreover, Plaintiffs do not contend, and the record does not establish, that LumaCorp failed to pay Mr. Garcia's outstanding medical bills or to pay him an additional $10,000 in release and settlement of all claims arising out of his work-related injury.
What Plaintiffs really complain about is the adequacy of consideration offered to Mr. Garcia for his release of rights and claims under the Settlement Agreement. Normally, a court will not inquire into the adequacy of consideration supporting a contract; however, in the interest of equity, a court may inquire into the adequacy of a contract if there is such a gross disparity in the relative values exchanged as to show unconscionability, bad faith, or fraud. Parker, 98 S.W. 3d at 301; see also Birdwell v. Birdwell, 819 S.W.2d 223, 227 (Tex.App.-Fort Worth 1991, writ denied) (Upon a challenge to the adequacy of consideration, a court will generally not look beyond the face of the contract unless there is unconscionability, bad faith, or fraud, in which case, in the interest of equity, a court may consider the adequacy of consideration."). "In order for the consideration to be deemed inadequate, it must be so grossly inadequate as to shock the conscience, being tantamount to fraud. Birdwell, 819 S.W. 2d at 227-28.
In this case, Mr. Garcia was paid more than he was entitled to under the Benefit Plan. As previously stated, the Benefit Plan in effect at the time of Mr. Garcia's injury had a maximum cumulative limit of $100,000. During the year after his injury, Mr. Garcia's medical bills and wage replacement benefits exceeded the cumulative benefit limit. In exchange for Mr. Garcia's release of claims, LumaCorp agreed to pay his then outstanding medical bills and to pay him an additional $10,000. The court fails to see how there was inadequate, or a failure of, consideration when LumaCorp was under no obligation to pay any amount under the Benefit Plan, as the $100,000 had already been paid out to Plaintiffs. Plaintiffs have failed to raise a genuine issue of material fact as to the adequacy of the consideration, and Defendants are entitled to judgment as a matter of law on this claim.
7. Declaratory Judgment and Injunction
Plaintiffs contend that a declaratory judgment and injunction should be issued to require Defendants to attend arbitration. As previously stated, the Benefit Plan in effect at the time of Mr. Garcia's injury did not provide for arbitration. As the parties have not agreed to arbitrate any of the claims asserted by Plaintiffs, the court has no basis to grant the relief requested. Defendants are entitled to judgment as matter of law on these claims.
C. Objections to Summary Judgment Evidence
Plaintiffs and Defendants both object to, and move to strike, certain summary judgment evidence. The court has previously set forth the applicable standard for competent summary judgment evidence. The court has only considered summary judgment evidence that met the standards of Fed.R.Civ.P. 56(c) and of that set forth in section II of this opinion. Evidence or statements which did not meet this standard were disregarded by the court in ruling on the summary judgment motions. Accordingly, the parties' respective objections are overruled as moot, and their motions to strike are denied as moot.
D. Plaintiffs' Request for Continuance
Plaintiffs in their reply to Defendants' response to their summary judgment motion request, pursuant to Fed.R.Civ.P. 56(f), the court, if it "finds that any of Plaintiffs' affidavits are lacking in any, shape or form, . . . permit [them to supplement] any deficient affidavits." Plaintiffs also move the court for additional time to seek the Affidavits of Jose Cruz and Barbara Lopez, who they contend are key witnesses that have been difficult to find for purpose of an interview. Pls.' Reply to Defs.' Resp. to Pls.' Mot. for Partial Summ. J. at 8-9.
Rule 56(f) authorizes a court to grant a continuance when the nonmovant has not had an opportunity to conduct discovery that is essential to his or her opposition to a motion for summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. at 250 n. 5. The Rule is an important ingredient of the federal summary judgment scheme, and provides a mechanism for dealing with the problem of premature summary judgment motions. Celotex Corp. v. Catrett, 477 U.S. at 326. The court does not believe that a Rule 56(f) continuance is appropriate in this case.
Rule 56(f) provides:
Should it appear from the affidavits of a party opposing the motion [for summary judgment] that a party cannot for reasons stated present by affidavit facts essential to justify the party's opposition, the court may refuse the application for judgment or may order a continuance to permit affidavits to be obtained or depositions to be taken or discovery to be had or may make such other order as is just.
Plaintiffs' request for a Rule 56(f) continuance is not in response to Defendants' summary judgment motion; rather, it is made in their reply to Defendants' response to their summary judgment motion. As those bringing the motion, Plaintiffs certainly should have been able to present the evidence on which they rely to support their motion. Instead, Plaintiffs submit affidavits that are totally lacking in detail and specificity, and offer absolutely no evidence of their version of the events giving rise to the causes of action alleged in their Complaint. For example, there is no sworn statement by either Plaintiff that the allegations contained in their Complaint, their summary judgment motion, their summary judgment brief, or any exhibits are true and correct or within the personal knowledge of Plaintiffs. It is not incumbent on the court to notify the parties when their evidence is inadequate, and the court will not do so in this case.
Moreover, even if Plaintiffs' request for a continuance may be considered in response to Defendants' summary judgment motion, Plaintiffs have not submitted an affidavit identifying specific facts that they believe additional discovery will show, or how the additional facts will create an issue for trial. See Stearns Airport Equip. Co. v. FMC Corp., 170 F.3d 518, 535 (5th Cir. 1999). The mere assertion that discovery is incomplete is insufficient to satisfy Rule 56(f). Washington v. Allstate Ins. Co., 901 F.2d 1281, 1285 (5th Cir. 1990). As the parties seeking a continuance, Plaintiffs had the burden of (1) identifying precisely what discovery was sought; (2) explaining how the additional discovery would help them meet their burden in opposing summary judgment; and (3) demonstrating that they had diligently pursued discovery. Plaintiffs have failed to meet any of these requirements. See Leatherman v. Tarrant County Narcotics Intelligence and Coordination Unit, 28 F.3d 1388, 1396 (5th Cir. 1994).
With respect to the first and second requirements, Plaintiffs not only failed to submit any affidavits, but they also failed to explain how the discovery sought would allow them to defeat LumaCorp's motion for summary judgment. As for the third requirement, there is no evidence that Plaintiffs diligently pursued discovery. Plaintiffs have failed to establish that they are entitled to a Rule 56(f) continuance. Accordingly, Plaintiffs' request for a Rule 56(f) continuance is denied. IV. Conclusion
For the reasons herein stated, Plaintiffs have failed to establish as a matter of law their claims of gross negligence, loss of consortium, fraud, fraud in the inducement, and intentional infliction of emotional distress. Plaintiffs' Motion for Partial Summary Judgment is therefore denied. Defendants, on the other hand, as previously stated, have established by competent summary judgment evidence that they are entitled to judgment as a matter of law on each of Plaintiffs' claims. Accordingly, Defendants' Motion for Summary Judgment is granted, and this action is dismissed with prejudice. The court will issue judgment by separate document as required by Fed.R.Civ.P. 58.