Martineau v. Arco Chemical Co., No. 99-20092

• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)
• Writing for the Court: Before KING, Chief Judge, and DUHE and DeMOSS; DUHE
• Citation: 203 F.3d 904
• Parties: (5th Cir. 2000) ESTATE OF RICHARD J. MARTINEAU, Plaintiff-Appellant, v. ARCO CHEMICAL COMPANY; ET AL, Defendants, ARCO CHEMICAL COMPANY, Defendant-Appellee
• Docket Number: No. 99-20092
• Decision Date: 25 February 2000

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203 F.3d 904 (5th Cir. 2000) ESTATE OF RICHARD J. MARTINEAU, Plaintiff-Appellant,
v.
ARCO CHEMICAL COMPANY; ET AL, Defendants, ARCO CHEMICAL COMPANY, Defendant-Appellee. No. 99-20092 UNITED STATES COURT OF APPEALS, Fifth Circuit February 25, 2000

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Appeal from the United States District Court for the Southern District of Texas

Before KING, Chief Judge, and DUHE and DeMOSS, Circuit Judges.

DUHE, Circuit Judge:

The Estate of Richard Martineau ("Martineau") appeals the grant of summary judgment in favor of ARCO Chemical Co. ("ARCO") in this discrimination and harassment case on several grounds. Martineau also contends that the district court failed to remand the case to the Texas state court. We affirm the district court's grant of summary judgment and its decision not to remand.

I. FACTS

Martineau began working at ARCO in 1976, and by 1996 he served as a lab supervisor in ARCO's Pasadena, Texas, chemical plant. ARCO contends that in 1996 employees and supervisors complained about Martineau's behavior which included cursing, yelling, slamming doors, and creating an unpleasant work environment. Martineau's supervisor, Eric Kolodziej ("Kolodziej"), counseled him regarding this behavior, and ARCO arranged for Martineau to attend an interpersonal skills class.

ARCO claims that complaints continued regarding Martineau's behavior. In September 1996, Lisa Sweeney ("Sweeney") filed a harassment complaint with ARCO accusing Martineau of giving her sexually suggestive poems, attempting to continually contact her at home, and starring at her at work. In response to these complaints, ARCO transferred Martineau to a non-supervisory role and prohibited him from all non-work-related contact with Sweeney. However, Martineau continued to call Sweeney at home, including one call, which registered on Sweeney's caller identification at 11:48 p.m. She again complained to ARCO. Martineau gave excuses for the

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calls, and ARCO gave Martineau the benefit of the doubt. Nevertheless, he continued to call Sweeney and to visit her at work.

By late 1996, ARCO terminated Martineau for violating company policy and for violating ARCO's instructions not to contact Sweeney. When Martineau appealed his termination to ARCO, he did not claim he was fired because of his national origin; rather, he accused ARCO of conspiring against him, and he accused the phone company of falsifying Sweeney's telephone records.

Martineau claims that ARCO employees continually discriminated against him because he is Canadian. Martineau suggests that in 1976 ARCO employees began making offensive comments regarding his national origin, including calling him "dumb Canadian" and "foreigner." Although he filed numerous complaints with ARCO, management ignored him. Martineau asserts the abuse became worse when Kolodziej became his supervisor. Kolodziej apparently demanded Martineau's green card and demanded to know why Martineau had not become a U.S. citizen even though he had been in the United States for 20 years. As for his relationship with Sweeney, Martineau contends that she viewed him as a father figure who gave her advice and provided loans to purchase a home. Sweeney then conned Martineau out of this money. When Martineau demanded reimbursement, Sweeney began to accuse him of harassment.

II. PROCEEDINGS AND REMOVAL

On June 11, 1997, Martineau sued ARCO and Sweeney in Texas state court. He claimed ARCO discriminated against him because of his Canadian national origin in violation of the Texas Commission on Human Rights Act ("TCHRA"). He also alleged that Sweeney and ARCO had defamed and intentionally inflicted emotional distress on him. Both Martineau and Sweeney are Texas citizens. ARCO is a Delaware Corporation with its principle place of business in Pennsylvania. Thus complete diversity of citizenship did not exist when Martineau initially filed the action.

28 U.S.C. 1446 allows a defendant to remove a case to federal court at any time, prior to the entry of judgment, when complete diversity is found to exist pursuant to 28 U.S.C. 1332. 28 U.S.C. 1446(b), however, limits the right of removal - a defendant cannot remove if more than a year has passed since the commencement of the action.

In May 1998, almost a year after Martineau's June 11, 1997 filing of the action, he and Sweeney agreed to settle their dispute. On May 11, 1998, Sweeney's counsel wrote Martineau's counsel indicating that the "letter will memorialize our settlement agreement" and instructing the attorney to sign and return the letter "if it meets with your client's approval." Martineau's attorney signed and returned the letter and filed it with the court on May 22, 1998. The letter listed specific terms of the agreement, such as the exchange of money and property, and suggested a manner and time of performance.

The May 11 letter provided that Martineau "will execute and file with the court a Non-suit with prejudice as to all of his claims" in reference to Sweeney. "In addition, Martineau will exchange executed full and final releases of any and all claims with Lisa Sweeney. This Non-suit with prejudice will be submitted to the court for the Judge's signature on June 12, 1998." Notably, June 12, 1998 was one year and one day after the original action was filed.

After the exchange and signature of the May 11 letter but before that letter was filed with the court, Martineau's and Sweeney's attorneys, on May 19, filed a different letter advising the court only that they had reached a settlement "in principle." The second letter specified that the "settlement is being reduced to writing for each party to review and sign." The letter also stated that "[o]nce the agreement is finalized and signed and the exchanges made, [Martineau] will file a motion to

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non-suit Ms. Sweeney with prejudice on or about June 12, 1998 at the earliest."

Three days later, on May 22, Martineau's counsel filed the May 11 letter with the court. Learning of the filing, ARCO immediately removed the case to federal district court. The district court determined that it had subject matter jurisdiction. ARCO then moved for summary judgment regarding Martineau's removed claims and his supplemental slander claims. The district court concluded that Martineau had failed to raise material fact issues concerning essential elements of each of his claims. In granting ARCO's summary judgment motion, the court concluded that (1) Martineau had not raised factual issues as to a prima facie case of discrimination; (2) his hostile environment claim was untimely; (3) his intentional infliction of emotional distress claim had not risen to a legally actionable level; and (4) he had raised no issues of material fact as to the slander and defamation claims.

III. DISCUSSION

A. Removal

Martineau contends that because a legal settlement did not exist between him and Sweeney removal was improper because complete diversity did not exist among the parties. Martineau asks that we remand the case because we lack subject matter jurisdiction. We review a district court's determination of the propriety of removal de novo. We impose upon the removing defendant, ARCO, the burden of establishing the existence of subject matter jurisdiction. Vasquez v. Alto Bonito Gravel Plant Corp., 56 F.3d 689, 692 (5th Cir. 1995).

Federal courts must look to state law to determine whether removal is proper on the ground that the nondiverse defendant is no longer effectively a party to the case. A case may be removed based on any voluntary act of the plaintiff that eliminates that nondiverse defendant from the case. Id. at 693. We must determine (1) whether there was a binding settlement agreement between Martineau and Sweeney on May 22, the date of removal, and (2) what procedural safeguards must be taken in order for the agreement to be enforceable and to "effectively eliminate" the nondiverse defendant from the litigation.

Under Texas Rule of Civil Procedure 11, a settlement agreement will be enforceable only if it is (1) in writing, (2) signed, and (3) filed as part of the record. Tex. R. Civ. P. 11; Cherco Properties, Inc. v. Law, Snakard & Gambill, P.C., 985 S.W.2d 262, 265 (Tex. App. 1999). Texas case law further requires that, to be enforceable, a settlement agreement must include all material terms - even if performance is to be completed later. Padilla v. LaFrance, 907 S.W.2d 454, 460 (Tex. 1995). Evidence of the parties' intent to enter into a binding agreement is also required. Premier Oil Refining Co. v. Bates, 367 S.W.2d 904, 907 (Tex. App. 1963).

The agreement between Sweeney and Martineau satisfies the three elements of Texas Rule 11: (1) There was a writing - in the form of two letters, one dated May 11 and the other dated May 19; (2) both letters were signed by counsel for both parties; and (3) both letters were filed with the court. The letters also contain all material terms. The May 11 letter specifically described the property Sweeney would return to Martineau; it mentioned and provided sample copies of the letter of apology and the affidavit she would provide; and specified the monetary settlement amount.

Martineau contends that...