Kirkindoll v. Nat'l Credit Union Admin. Bd.

• Decision Date: 13 April 2015
• Docket Number: Civil Action No. 3:11-CV-1921-D
• Parties: GARY KIRKINDOLL, Plaintiff, v. NATIONAL CREDIT UNION ADMINISTRATIVE BOARD, AS CONSERVATOR OF TEXANS CREDIT UNION, et al., Defendants.
• Court: U.S. District Court — Northern District of Texas

GARY KIRKINDOLL, Plaintiff, v. NATIONAL CREDIT UNION ADMINISTRATIVE BOARD, AS CONSERVATOR OF TEXANS CREDIT UNION, et al., Defendants.

Civil Action No. 3:11-CV-1921-D

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION

April 13, 2015

MEMORANDUM OPINION AND ORDER

In its prior memorandum opinion and order in this case, Kirkindoll v. NCUAB, 2014 WL 7178005 (N.D. Tex. Dec. 17, 2014) (Fitzwater, J.) ("Kirkindoll V"), the court raised sua sponte that defendants are entitled to summary judgment dismissing plaintiff's breach of contract claim, and it gave plaintiff an opportunity to respond. The court later granted defendants leave to file a summary judgment motion addressed to plaintiff's other remaining claims. For the reasons that follow, the court concludes that neither plaintiff Gary Kirkindoll ("Kirkindoll") nor defendant National Credit Union Administration Board ("NCUAB") is entitled to summary judgment on Kirkindoll's breach of contract claim, but that the other defendants are entitled to summary judgment dismissing that claim; that defendants are entitled to summary judgment dismissing Kirkindoll's other remaining claims; and that Kirkindoll's breach of contract claim against NCUAB, limited to the relief available under12 U.S.C. § 1787(c)(3), is the only claim that remains for trial. The court today enters a Fed. R. Civ. P. 54(b) final judgment dismissing Kirkindoll's actions against all defendants except NCUAB.

I

Because this case is the subject of several prior memorandum opinions and orders, including Kirkindoll V, the court will limit its discussion of the background facts and procedural history to what is pertinent to this decision.¹

Kirkindoll was hired in 2005 as President of defendant Texans CUSO Services, LLC d/b/a Texans Financial ("Texans"), a credit union service organization owned by defendant Texans Credit Union ("TCU"). As a tool to retain certain key company executives, TCU created and implemented the Texans Credit Union Section 457(f) Executive Deferred Compensation Plan ("Plan")—a "top hat" plan—which was offered to Kirkindoll and two other TCU executives.

In 2010, after TCU began experiencing severe financial distress, its Board of Directors decided to terminate the Plan. In March 2011 TCU's then-President and Chief Executive Officer, Mike Sauer ("Sauer"), proposed to Kirkindoll that his interest in the Plan be partially vested in exchange for Kirkindoll's surrender and cancellation of any rights he had under thePlan. In a March 15, 2011 letter (the "March 2011 Agreement"), Sauer proposed that the Plan terminate on April 1, 2011 and that Kirkindoll receive $234,068.18 within 30 days. Kirkindoll signed the March 2011 Agreement, and, by unanimous consent, the Board of Directors terminated the Plan effective April 1, 2011.

On April 15, 2011 NCUAB placed TCU into conservatorship and appointed itself as conservator. NCUAB notified Kirkindoll in a May 11, 2011 letter (the "Repudiation Letter") that, in accordance with its federal regulatory powers, it was repudiating the March 2011 Agreement. It cited, among other reasons, that the TCU Board of Directors had acted outside its allowable authority in purporting to partially vest Kirkindoll's account, and that continuation of the March 2011 Agreement would be burdensome and hinder the orderly administration of TCU's affairs. The Repudiation Letter also stated, in relevant part:

[NCUAB] as Conservator is not liable for damages for the repudiation of a contract, 12 U.S.C. § 1787(c)(3), except for certain actual and direct compensatory damages. Damages are determined from the date of the appointment of the Conservator and may not include punitive damages, damages for lost profits or opportunity, or damages for pain and suffering. Please direct any inquiries regarding actual and direct damages to [name of contact person] at [telephone number of contact person].

P. 6/28/12 App. 65. Kirkindoll neither telephoned nor otherwise contacted NCUAB.

On May 18, 2011 NCUAB adopted a resolution ratifying the TCU Board of Directors' termination of the Plan and nullifying any payments that had been made to Kirkindoll. On May 23, 2011 Kirkindoll's employment was terminated as part of a reduction in force.

Kirkindoll filed the instant lawsuit in Texas state court against TCU, Texans, TexansCUSO Partners, LLC ("Texans Partners"), and Texans CUSO Insurance Group, LLC ("TIG").² He asserted state-law claims for breach of contract, promissory estoppel, debts, fraudulent misrepresentation, negligent misrepresentation, fraudulent inducement, and breach of fiduciary duty. Defendants removed the case to this court, and on defendants' unopposed motion, the court ordered that NCUAB be substituted in place of TCU as a defendant. After the court denied Kirkindoll's motion to remand based on NCUAB's status as a party-defendant, he amended his complaint to add an alternative claim under the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001-1461 ("ERISA").³

In Kirkindoll V the court denied Kirkindoll's motion for summary judgment, granted in part and denied in part defendants' motion for summary judgment, and raised sua sponte that summary judgment should be granted in defendants' favor on certain grounds. Kirkindoll V, 2014 WL 7178005, at *15.⁴ Because the court raised grounds for summary judgment sua sponte, it permitted Kirkindoll to file an opposition response addressing these grounds. Id. The court separately granted defendants' motion for leave to file a motion forsummary judgment directed to Kirkindoll's three remaining state-law claims. Kirkindoll has filed his response to Kirkindoll V,⁵ and defendants have filed their summary judgment motion.

II

The court turns first to Kirkindoll's breach of contract claim. It considers initially whether Kirkindoll has pleaded such a claim, and, if he has, whether he is entitled to summary judgment establishing this claim, or whether defendants are entitled to summary judgment dismissing this claim.

A

In Kirkindoll V the court addressed Kirkindoll's and defendants' summary judgment motions concerning Kirkindoll's breach of contract claim. The court denied Kirkindoll's motion on the ground that NCUAB could not have breached the March 2011 Agreement by exercising its statutory authority under 12 U.S.C. § 1787(c)(1) to repudiate the contract. Id. at *6 ("[T]he court holds that NCUAB was empowered in its broad discretion to repudiate the March 2011 Agreement as burdensome and to promote the orderly administration of TCU's affairs[.]"). The court then held that Kirkindoll was not entitled to summary judgment in his favor—awarding him the sum of $234,068.18 as actual direct compensatory damagesunder 12 U.S.C. § 1787(c)(3)(A) arising from NCUAB's repudiation of the March 2011 Agreement—because he had not pleaded a claim under § 1787(c)(3)(A). Id. The court concluded that Kirkindoll "ha[d] not pleaded a claim that rests on the premise that NCUAB lawfully repudiated the March 2011 Agreement and that he is entitled to recover the sum of $234,068.18 as actual direct compensatory damages under § 1787(c)(3)(A)." Id. at *7.

Regarding whether defendants were entitled to summary judgment dismissing Kirkindoll's breach of contract claim against NCUAB, the court raised sua sponte that this claim (among other state-law claims) was preempted by 12 U.S.C. § 1787(c)(1). Id. The court dismissed Kirkindoll's state-law breach of contract claim against NCUAB in its entirety, without deciding whether Kirkindoll could recover the same relief as actual direct compensatory damages under § 1787(c)(3)(A), on the ground that he had not asserted such a claim. Id. at *8. The court raised sua sponte that Texans, Texans Partners, and TIG were entitled to summary judgment dismissing Kirkindoll's breach of contract claim because he had failed to adduce any evidence that they were in privity of contract with him. Id. at *9.

B

The court holds that Kirkindoll has failed to present a basis for a reasonable jury to find that Texans, Texans Partners, and TIG were in privity of contract with Kirkindoll. Accordingly, Texans, Texans Partners, and TIG are entitled to summary judgment dismissing Kirkindoll's claim for breach of contract.

C

The court considers next whether Kirkindoll has pleaded a breach of contract claim against NCUAB.

Kirkindoll maintains that he has a breach of contract claim based on NCUAB's repudiation of the March 2011 Agreement, despite the limitation on available remedies imposed by 12 U.S.C. § 1787(c)(3)(A). In response to the court's conclusion in Kirkindoll V that he has not pleaded such a claim, Kirkindoll contends that "the Court should reconsider its determination that Kirkindoll cannot recover under the March 2011 Contract on the ground that Kirkindoll did not cite 12 U.S.C. § 1787(c)(3)(A)." P. 1/14/15 Br. 3 (emphasis added). He argues that the United States Supreme Court's recent decision in Johnson v. City of Shelby, Miss., ___ U.S. ___, 135 S.Ct. 346 (2014) (per curiam), "makes clear that the Federal Rules of Civil Procedure do not require [him] to cite a statute, to articulate the statute or authority to make a claim." P. 1/14/15 Br. at 4.⁶

Although Kirkindoll correctly reads Johnson, he misapplies it to the court's decision in Kirkindoll V. In Kirkindoll V the court rejected Kirkindoll's assertion that, even if he could not recover for breach of contract, "he [was] nonetheless entitled to recover the sum of $234,068.18 as 'actual direct compensatory damages' under 12 U.S.C. § 1787(c)(3)(A)." Kirkindoll V, 2014 WL 7178005, at *6. The court explained that

Kirkindoll is not entitled to summary judgment awarding him the sum of $234,068.18 as actual direct compensatory damages under 12 U.S.C. § 1787(c)(3)(A) arising from NCUAB's repudiation of the March 2011 Agreement. This is so because he has not pleaded a claim under § 1787(c)(3)(A), that is, he has not pleaded a claim that rests on the premise that NCUAB lawfully

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