TYCO Valves & Controls, L.P. v. Colorado, No. 01–10–00113–CV.

CourtTexas Court of Appeals
Writing for the CourtJustice MASSENGALE
Citation365 S.W.3d 750
Docket NumberNo. 01–10–00113–CV.
Decision Date19 January 2012
PartiesTYCO VALVES & CONTROLS, L.P., and TV & C GP Holdings, Inc., Appellants, v. Arsenio COLORADO, Steven Craig, Umit Davulcu, Richard Gonzales, Lanny Heinrich, Leonard Hill, Andy Huynh, Chris Kahrig, Lay Keonakhone, Greg Lambousy, Tung Le, Chris Luckey, Fernando Macias, Jorge Martinez, Raul Martinez, Kenneth Nash, Jimmy Phoumlavanh, and Souk Vongsamphanh, Appellees.

365 S.W.3d 750

TYCO VALVES & CONTROLS, L.P., and TV & C GP Holdings, Inc., Appellants,
v.
Arsenio COLORADO, Steven Craig, Umit Davulcu, Richard Gonzales, Lanny Heinrich, Leonard Hill, Andy Huynh, Chris Kahrig, Lay Keonakhone, Greg Lambousy, Tung Le, Chris Luckey, Fernando Macias, Jorge Martinez, Raul Martinez, Kenneth Nash, Jimmy Phoumlavanh, and Souk Vongsamphanh, Appellees.

No. 01–10–00113–CV.

Court of Appeals of Texas,
Houston (1st Dist.)
.

Jan. 19, 2012.


[365 S.W.3d 755]


Angela Lynne North, Michael W. Fox, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Austin, TX, James R. Staley, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Houston, TX, for Appellants.

David C. Holmes, Law Offices of David C. Holmes, Houston, TX, for Appellees.


Panel consists of Justices KEYES, SHARP, and MASSENGALE.

OPINION

EVELYN V. KEYES, Justice.

Appellees (collectively, “the Gimpel employees”), sued appellants, Tyco Valves & Controls, L.P. and TV & C GP Holdings, Inc. 1 (collectively, “Tyco”) for breach of contract. Following a bench trial, the trial court entered judgment in favor of the Gimpel employees. In nine issues, Tyco appeals, arguing that: (1) the trial court erred by finding that the Gimpel employees' claims were not preempted by the Employee Retirement Income Security Act (“ERISA”); (2) the trial court's finding that the Gimpel employees' contracts were not related to Tyco's ERISA Severance Plan was not supported by legally and factually sufficient evidence; (3) the Gimpel employees' claims are related to ERISA because they sought and were awarded severance pay damages in amounts identical to the severance pay that they would have been due under Tyco's ERISA Severance Plan, as stipulated by the Gimpel employees; (4) the Gimpel employees' claims are related to ERISA because the severance pay amounts the Gimpel employees stipulated they were owed can only be accurately calculated under Tyco's ERISA Severance Plan.; (5) the Retention Incentive Agreements' use of the terms “the standard Severance” and “severance schedule associated with the closure of this facility” are clear references to Tyco's ERISA Severance Plan; (6) the trial court's conclusion that Tyco entered binding and enforceable oral and/or written contracts to pay severance was based on legally and factually insufficient evidence; (7) the trial court's findings concerning alleged oral contracts and an alleged bulletin board posting are legally and factually insufficient; (8) the trial court's finding that the Retention Incentive Agreements are valid and enforceable contracts is not supported by legally and factually sufficient evidence because there was no evidence or insufficient evidence to establish a meeting of the minds regarding the meaning of the term “standard Severance” in the Retention Incentive Agreements; and (9) the evidence supporting the trial court's conclusion that Tyco breached its agreements with the Gimpel employees is legally and factually insufficient.

We reverse and render judgment that appellees take nothing by their claims.

Background

In 2006, appellees were all employees of Tyco working in a unit that made specialized valves, known as Gimpel valves. The Gimpel Unit was located in Tyco's West Gulf Bank facility, which also housed several other Tyco units. The appellees performed

[365 S.W.3d 756]

a variety of different functions within the Gimpel Unit.

In mid–2006, Tyco decided to close the West Gulf Bank Facility and began to relocate or sell the various units housed there. Holly Kriendler, the Human Resources Director of Tyco, created a document titled “Tyco Valves and Controls Severance,” (hereinafter “West Gulf Bank Severance Schedule”) which provided:

Effective August 1, 2006, Tyco Valves and Controls West Gulf Bank location will follow the following Severance schedule.

Salaried employees will receive 2 weeks of pay continuation for each full year of continuous service, subject to a minimum of 6 weeks and a maximum of 26 weeks.

Hourly employees will receive 1 week of pay continuation per full year of continuous service, subject to a minimum of 6 weeks and a maximum of 26 weeks.

This policy shall apply to bands 4—7 and supersede any prior plan, program or policy under which the Company provided severance benefits prior to the Effective Date of the Policy.

This document listed conditions that must be met, including executing and complying with a release provided by the company and authorizing the deduction of amounts owed to the company prior to the payment of severance. It concluded with a list of circumstances in which employees would not be eligible for severance benefits, but it did not include any provisions relating to termination of employment due to a sale or outsourcing of the unit or relating to calculation of an employee's years of service when the service was not continuous.


In December 2006, Tyco announced that it would attempt to sell the Gimpel Unit. In connection with this process, the Gimpel employees entered into various Retention Incentive Agreements (“RIAs”) that were signed by eleven of the Gimpel employees and either Sal Vaccaro, the plant manager, or Paddy Warman, Tyco's Human Resources representative. These agreements were all dated between January 5, 2007 and January 15, 2007 and were made “by and between Tyco Valves and Controls, its successors and assigns (‘Tyco’ or ‘Company’),” and the specific employee listed in each RIA. The RIAs expressed Tyco's desire to retain the employees named in the RIAs because Tyco considered the “continuing services, leadership and support by Employee during the Retention Period (as defined below) to be very important to the ongoing effective management and maintenance of the facility.”

The RIAs provided that if the employee stayed through the retention period, Tyco would pay:

(i) in the event that the Employee is not offered Comparable Employment with Tyco, an amount equal to [between $3,000 and $10,000] (Retention Bonus) plus the standard Severance in accordance to the severance schedule associated with the closure of this facility....

OR

(ii) in the event that the Employee is offered Comparable Employment with Tyco, a cash payment of [between $3,000 and $10,000] subject to the Employee's acceptable performance during the Retention Period.

The RIA defined “Comparable Employment”:


For purposes of this agreement, Comparable Employment shall mean that within 30 days after the end of the Retention Period, the Employee is offered employment with [“Tyco”] of comparable pay, status and skill level at a location that is

[365 S.W.3d 757]

within 25 miles of Employee[']s current work location.

Finally, the RIAs provided:


This Agreement sets forth the entire understanding of Tyco and the employee, and supersedes all prior agreements and communications, whether oral or written, pertaining to eligibility for stay incentives of the type described herein.... This Agreement shall not be modified except by written agreement of the Employee and Tyco.

The RIAs did not state a specific dollar amount of severance benefits or provide a severance schedule.


In April 2007, Dresser Rand Company (“Dresser Rand”) agreed to purchase the Gimpel Unit. As part of that transaction, Tyco and Dresser Rand entered into an Asset Purchase Agreement. In relevant part, that agreement states that the “Purchased Assets transferred ... will exclude the following assets[:] ... all Seller Benefit Plans, the assets thereof and the benefits available to participants thereunder ...”

The Asset Purchase Agreement further states that Dresser Rand shall not assume liability for

(i) any wages, salary, severance, bonuses ... (ii) any duties, obligations or liabilities arising under any employee benefit plan, policy, or practice ... or (iii) any other amounts due to any employees or former employees of the Business, in each case which accrue or arise prior to the Closing Date....

In the section of the Asset Purchase Agreement concerning covenants and agreements on employees, the agreement states:

Purchaser shall at the Closing (or as soon as practicable thereafter) offer employment to all or substantially all of Seller's employees involved in the operation of the Business and listed on Schedule 4.1(a) (the “Prospective Employees”) at substantially the same base salary or hourly rate as such Prospective Employees are employed by Seller immediately prior to closing.... All Prospective Employees ... who accept Purchaser's offer of employment (the “Hired Employees”) shall become employees of Purchaser as of the date specified in the offer letter delivered to each such Hired Employee in accordance with Section 4.1 or such later date that such Hired Employee satisfies Purchaser's conditions of employment including, without limitation, background checks and drug testing. Seller shall terminate the employment of each Prospective Employee with Seller immediately prior to the date on which such person becomes a Hired Employee. Each Hired Employee shall be eligible, from and after the first day of the month following the date on which such Hired Employee becomes an employee of Purchaser, for the same benefit plans of Purchaser as those offered to similarly situations employees of Purchaser; provided, that each Hired Employee, shall be eligible for coverage under Purchaser's short-term disability plan(s) from and after the date on which such Hired Employee becomes an employee of Purchaser. Following the Closing Date, Purchaser shall ensure that no exclusions or limitations with respect to any pre-existing conditions, evidence of insurability or good health are applicable to any Hired Employees or their dependents or beneficiaries under any health plan(s) in which such Hired Employees may be eligible to participate.

Thus, the agreement between Tyco and Dresser Rand provides that, after a prospective employee accepted an offer of employment with Dresser Rand, Tyco would

[365 S.W.3d 758]

terminate that employee. The Asset Purchase Agreement...

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12 practice notes
  • Headington Royalty, Inc. v. Finley Res., Inc., No. 05-19-00291-CV
    • United States
    • Court of Appeals of Texas
    • 18 Marzo 2021
    ...LLC as a corporate predecessor of Starside Custom Builders, LLC following bankruptcy); Tyco Valves & Controls, L.P. v. Colorado , 365 S.W.3d 750, 774 (Tex. App.—Houston [1st Dist.] 2012), aff'd , 432 S.W.3d 885 (Tex. 2014) (extending liability to the purchaser of a facility as the successor......
  • Harding Co. v. Sendero Res., Inc., No. 06–11–00005–CV.
    • United States
    • Court of Appeals of Texas
    • 29 Febrero 2012
    ...duty and fraudulent inducement. We conclude that a fact issue exists as to whether TWW Tyler and Associates, L.P., acted as Harding's [365 S.W.3d 750]agents and thereby owed Harding fiduciary duties, including the duty of loyalty. Harding presented some evidence TWW Tyler and Associates, L.......
  • Colorado v. Valves, No. 12–0360.
    • United States
    • Supreme Court of Texas
    • 27 Junio 2014
    ...found for the employees, awarding them severance pay. The court of appeals reversed in a divided opinion and rendered judgment for Tyco. 365 S.W.3d 750. Three issues are presented for our review. First, we determine whether the employees' breach-of-contract claims are preempted by the Emplo......
  • Rogers v. RREF II CB Acquisitions, LLC, NUMBER 13–15–00321–CV
    • United States
    • Court of Appeals of Texas
    • 17 Noviembre 2016
    ...summary judgment response as a matter of plain and unobjectionable background fact).4 See, e.g., Tyco Valves & Controls, LP v. Colorado, 365 S.W.3d 750, 773 (Tex. App.–Houston [1st Dist.] 2012), aff'd, 432 S.W.3d 885 (Tex. 2014). ("When applied to corporations, the term ‘successor’ ... is n......
  • Request a trial to view additional results
12 cases
  • Headington Royalty, Inc. v. Finley Res., Inc., No. 05-19-00291-CV
    • United States
    • Court of Appeals of Texas
    • 18 Marzo 2021
    ...LLC as a corporate predecessor of Starside Custom Builders, LLC following bankruptcy); Tyco Valves & Controls, L.P. v. Colorado , 365 S.W.3d 750, 774 (Tex. App.—Houston [1st Dist.] 2012), aff'd , 432 S.W.3d 885 (Tex. 2014) (extending liability to the purchaser of a facility as the successor......
  • Harding Co. v. Sendero Res., Inc., No. 06–11–00005–CV.
    • United States
    • Court of Appeals of Texas
    • 29 Febrero 2012
    ...duty and fraudulent inducement. We conclude that a fact issue exists as to whether TWW Tyler and Associates, L.P., acted as Harding's [365 S.W.3d 750]agents and thereby owed Harding fiduciary duties, including the duty of loyalty. Harding presented some evidence TWW Tyler and Associates, L.......
  • Colorado v. Valves, No. 12–0360.
    • United States
    • Supreme Court of Texas
    • 27 Junio 2014
    ...found for the employees, awarding them severance pay. The court of appeals reversed in a divided opinion and rendered judgment for Tyco. 365 S.W.3d 750. Three issues are presented for our review. First, we determine whether the employees' breach-of-contract claims are preempted by the Emplo......
  • Rogers v. RREF II CB Acquisitions, LLC, NUMBER 13–15–00321–CV
    • United States
    • Court of Appeals of Texas
    • 17 Noviembre 2016
    ...summary judgment response as a matter of plain and unobjectionable background fact).4 See, e.g., Tyco Valves & Controls, LP v. Colorado, 365 S.W.3d 750, 773 (Tex. App.–Houston [1st Dist.] 2012), aff'd, 432 S.W.3d 885 (Tex. 2014). ("When applied to corporations, the term ‘successor’ ... is n......
  • Request a trial to view additional results

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