Sarradet v. Riverbend Envtl. Servs., LLC

• Decision Date: 24 July 2017
• Docket Number: CIVIL ACTION NO. 16-80-EWD
• Parties: JANIE SARRADET v. RIVERBEND ENVIRONMENTAL SERVICES, LLC, ET AL.
• Court: U.S. District Court — Middle District of Louisiana

JANIE SARRADET v. RIVERBEND ENVIRONMENTAL SERVICES, LLC, ET AL.

CIVIL ACTION NO. 16-80-EWD

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF LOUISIANA

July 24, 2017

CONSENT CASE

RULING AND ORDER ON DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

Before the Court is a Motion for Summary Judgment (the "Motion"), filed by defendants Riverbend Environmental Services, LLC ("Riverbend"), R.E. Services, Inc., Singleton "Mac" McInnis, III ("McInnis"), and Andrew Densing ("Densing")(collectively, "Defendants").¹ The Motion is opposed² and Defendants have filed a reply.³

For the reasons set forth herein, Defendants' Motion for Summary Judgment is GRANTED in part and DENIED in part. The Motion is DENIED to the extent Defendants seek dismissal of Plaintiff's breach of contract claim concerning Defendants' refusal to recognize that Plaintiff earned a two percent equity interest in Riverbend during the course of her employment. To the extent Defendants seek dismissal of the remainder of Plaintiff's claims for breach of contract, alleged violations of the Louisiana Unfair Trade Practices Act ("LUTPA") and intentional interference with a contract, the Motion is GRANTED and those claims are DISMISSED with prejudice.⁴

I. Background

On or about February 5, 2016, Plaintiff filed a Complaint in this Court against Defendants asserting claims for breach of contract, unpaid wages under Louisiana Wage Payment Statutes ("LWPS"), La. R.S. 23:631, et seq., unfair trade practices under the LUTPA and intentional interference with a contract.⁵ Plaintiff alleges that on or about March 29, 2012, she was hired as the Business Development Manager for Riverbend.⁶ Riverbend is a limited liability company that owns a landfill in Fayette, Mississippi for the disposal of solid and special waste, as well as three transfer stations in Louisiana and Mississippi where waste is temporarily stored for delivery to the landfill.⁷ The initial terms and conditions of the Business Development Manager position were set forth in an offer letter dated March 29, 2012 (the "offer letter"), which the parties ultimately signed.⁸ Under the terms of the offer letter, Riverbend agreed to pay Plaintiff an annual base salary of $85,000, commissions at a rate of two percent on new and existing business and Plaintiff was also eligible to receive a one percent equity interest in Riverbend the first year annual "gross landfill revenue" exceeded $5 million, another one percent equity interest if "annual landfill revenue" reached $6 million, "and at $7m another 0.5 percent equity will be granted to max out at 2.5 percent."⁹

The Complaint alleges that in 2014, Riverbend "arbitrarily and capriciously and without cause unilaterally reduced Plaintiff's commission on new and existing business by fifty percent in violation of the written agreement between the parties."¹⁰ Plaintiff also alleges that Riverbend withheld her commissions and never provided or paid Plaintiff her equity interest in the companywhen Riverbend obtained the targeted "gross landfill revenue" pursuant to the terms of the offer letter. According to Plaintiff , the Defendants engaged in a "fraudulent bait and switch scheme in which Plaintiff was enticed to come work for Defendants in exchange for monetary incentives once goals were achieved," but when Plaintiff reached those goals Defendants refused to perform their obligations under the employment contract.¹¹ As a result, Plaintiff seeks damages for, among other things, lost income, lost commissions and lost equity interest. Plaintiff also asserts claims against individual defendants McInnis and Densing, the managers of Riverbend, alleging that McInnis and Densing "conspired to perform the bad faith bait and switch scheme," which negates any corporate immunity they seek to assert in this case.¹²

On May 26, 2017, Defendants filed the instant Motion for Summary Judgment.¹³ Defendants argue that Plaintiff's breach of contract claims should be dismissed because the undisputed evidence shows that Riverbend did not breach any terms of the offer letter.¹⁴ Defendants also seek dismissal of Plaintiff's remaining claims under the LUTPA and for intentional interference with a contact. First, Defendants contend that because Plaintiff's breach of contract claims fail as a matter of law, Plaintiff's intentional interference with a contract claim necessarily fails, as well.¹⁵ Defendants further assert that McInnis and Densing, as managers of a limited liability company,¹⁶ cannot be held liable for intentional interference with a contract, which is a claim that must be directed at an individual corporate officer.¹⁷ Finally, Defendants assert that Plaintiff's LUTPA claim should be dismissed because it is not within the scope of activityprotected by the LUTPA. In opposition, Plaintiff asserts the Motion to Dismiss should be denied because there are genuine issues of material fact with respect to each of the claims raised in her Complaint.¹⁸

II. Law and Analysis

A. Summary Judgment Standard

Summary judgment shall be granted when the record shows that there is no genuine dispute as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56; 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." Moreland v. United States, 3:11-CV-358-L, 2013 WL 3283700, at *1 (N.D. Tex. June 28, 2013) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986)). Once the moving party has demonstrated the absence of a material fact issue, the party opposing summary judgment may not rest on the mere allegations of his pleadings and must come forward with "specific facts showing that there is a genuine issue for trial." Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986). When considering summary judgment evidence, the court must view all facts and inferences in the light most favorable to the nonmoving party and resolve all disputed facts in favor of the nonmoving party. Boudreaux v. Swift Transp. Co., Inc., 402 F.3d 536, 540 (5th Cir. 2005). However, the court must "not weigh the evidence or evaluate the credibility of witnesses." Morris v. Covan World Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir. 1998).

B. Genuine Issues of Material Fact Exist with Respect to Plaintiff's Breach of Contract Claim and Whether Plaintiff Earned a Two Percent Equity Interest in Riverbend

In the Complaint, Plaintiff asserts that she earned a one percent equity position in Riverbend for the year 2013 and earned another one percent equity position in Riverbend for the year 2014 because gross landfill revenues exceeded the targets established in the offer letter in those years. Plaintiff relies on Defendants' financial documents which show that Riverbend's "Total Income/Gross Profit" was $5,201,036.88 in 2013 and $6,239,365.88 in 2014.¹⁹ Defendants counter that Plaintiff did not earn any equity interest in Riverbend because Plaintiff erroneously relies upon Riverbend's gross revenue without the deduction of transfer station expenses.²⁰ Although the offer letter does not define the phrase "gross landfill revenue," nor specify the manner in which "gross landfill revenue" is to be calculated, Defendants have submitted a Declaration from Densing to show that Defendants intended for the amount to be calculated by deducting the transfer station expenses, which is why the qualifying word "landfill" was included in the offer letter.²¹

All parties rely on the offer letter with regard to their arguments about whether or not Plaintiff should have a two percent equity position in Riverbend. The offer letter states the following with regard to Plaintiff acquiring an equity position:

4. Equity: The first year the company exceeds $5m in gross landfill revenue the company will offer a 1 percent equity position. At $6m annual landfill revenue, another 1 percent will be granted, and at $7m another 0.5 percent equity will be granted to max out at 2.5 percent.²²

The parties also agree that whether Plaintiff is entitled to a two percent equity position in Riverbend turns on the meaning of the phrase "gross landfill revenue."

A federal court sitting in diversity applies the substantive laws of the forum state. Learmonth v. Sears, Roebuck and Co., 710 F.3d 249, 258 (5th Cir. 2013)(citations omitted).

Under Louisiana law, a contract is ambiguous when the contract is 'uncertain as to the parties' intentions and susceptible to more than one reasonable meaning under the circumstances and after applying established rules of construction.' Shocklee v. Massachusetts Mut. Life Ins. Co., 369 F.3d 437, 440 (5th Cir. 2004), citing In re Liljeberg Enterprises, Inc., 304 F.3d 410, 440 (5th Cir. 2000) (internal quotation marks and citations omitted). When a contract is ambiguous, 'the agreement shall be construed according to the intent of the parties.' Guidry v. American Public Life Ins. Co., 512 F.3d 177, 181 (5th Cir. 2007), citing Kuswa & Assocs., Inc. v. Thibaut Constr. Co., 463 So.2d 1264, 1266 (La.1985). 'Intent is an issue of fact which is to be inferred from all of the surrounding circumstances.' Guidry, 512 F.3d at 181, citing Kuswa & Assoc., 463 So.2d at 1266 (emphasis added); see also Liberty Mut. Ins. Co. v. Pine Bluff Sand & Gravel Co., 89 F.3d 243, 246 (5th Cir. 1996) ('[A]mbiguity in the terms of a contract gives rise to a fact question concerning the intent of the parties.'). Therefore, the Fifth Circuit has held 'when a contract is ambiguous, the trier of fact must resolve the factual issue of intent, and judgment on the pleadings or summary judgment is improper.' Guidry, 512 F.3d at 181, citing Investors Syndicate of Am., Inc. v. City of Indian Rocks Beach, 434 F.2d 871, 877-78 (5th Cir. 1970) (finding that dismissal on the pleadings was

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