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Allen v. Noah Precision, LLC

United States District Court, E.D. Texas, Sherman Division

July 5, 2017

BRIAN R. ALLEN, Plaintiff,
v.
NOAH PRECISION, LLC, Defendant.

          MEMORANDUM OPINION AND ORDER REGARDING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT AND MOTION TO STRIKE

          KIMBERLY C. PRIEST JOHNSON UNITED STATES MAGISTRATE JUDGE

         This matter is before the undersigned for all pre-trial and trial matters pursuant to 28 U.S.C. § 636 and the consent of the parties (see Dkt. 7). Now pending is Defendant Noah Precision, LLC's (“Noah” or “Defendant”) Motion for Summary Judgment (Dkt. 117). Plaintiff Brian R. Allen[1] (“Allen” or “Plaintiff”) has filed a response in opposition. See Dkt. 127 (Sealed). Defendant's reply (Dkt. 139) objects to and moves to strike much of Plaintiff's summary judgment evidence. See id. As set forth below, Defendant's motion to strike (Dkt. 139) is DENIED as moot, and Defendant's motion for summary judgment is (Dkt. 117) is GRANTED in part and DENIED in part.

         I. BACKGROUND

         Plaintiff filed his state court action on August 15, 2014, in the 199th District Court for Collin County, asserting claims against Noah for breach of contract and quantum meruit. Defendant Noah timely filed a notice of removal on September 23, 2014, on the basis of diversity jurisdiction (see Dkt. 1). On January 29, 2015, Plaintiff's Fifth Amended Complaint (the “Complaint”) (Dkt. 42), the operative complaint herein, asserted an additional claim against Noah for fraudulent transfer, alleging that Noah transferred its assets with the intent of preventing Plaintiff from obtaining reimbursement for alleged business expenses and from redeeming his ownership units (the “Units”) at an allegedly agreed price. See id. Defendants Peter M. Adams (“Adams”), Lauda-Noah, LP (“Lauda-Noah”), and Lauda-Noah Management, Inc. (“LNM”) have been dismissed from this lawsuit. See Dkt. 89. Thus, Noah is the only remaining Defendant.

         According to Plaintiff, he was an employee of Noah from the date of its organization in 2004 until August 2014. See Dkt. 42 at ¶8. Plaintiff alleges that during the course of his employment with Noah, he was required to “travel extensively on a national and international basis” and to purchase equipment, which he stored in his home in Collin County, Texas. See id. at ¶12. Plaintiff further alleges that Noah agreed to reimburse him for his “reasonable and necessary business expenses.” See id. at ¶13. Plaintiff claims he was not given any deadline for submission of his business expenses, and was told to spend his time performing “income-generating” work rather than taking the time to prepare and submit his expenses, which according to Plaintiff, is an “extremely complicated and time-consuming task, involving thousands of receipts from different countries with different currencies.” See id. at ¶14. Plaintiff contends that when he submitted approximately $89, 000.00, in unpaid business expenses in August 2014, Noah refused to reimburse him and then terminated him to avoid reimbursing his business expenses and to avoid redeeming his Units at a previously-agreed price. See id. at ¶18.

         Noah asserts that during Plaintiff's ten (10) years of employment with the company, he submitted a business expense report to Noah only once, in April 2005; that Plaintiff was reimbursed for those expenses submitted in 2005; and thereafter Plaintiff never submitted another business expense report, despite repeated requests from Noah. See Dkt. 117 at 8-9. Noah further asserts that Plaintiff was issued a company credit card in May 2006, so that Noah could timely track and pay for Plaintiff's business-related expenses. Id. at 9. Yet, according to Noah, Plaintiff chose to charge most of his expenses on multiple personal credit cards and repeatedly failed to account for his expenses. Id. Noah implemented a formal expense reimbursement policy applicable to all employees in March 2012, which Noah alleges merely memorialized what its expectations had been prior to formally publishing the policy-that business expenses be submitted and accounted for on a monthly basis. Id. The policy provided that employees with business expenses prior to April 1, 2012, had ninety (90) days to submit those expenses or they would not be reimbursed. Id. According to Noah, Plaintiff still refused to comply with the policy despite multiple communications specifically informing Plaintiff that the Policy did indeed apply to him. See id.

         As for Plaintiff's claim he was to receive a previously agreed price for his Units, Noah asserts there was never an agreed redemption price for Plaintiff's Units, but rather the redemption price was to be a fair market value as determined by the methodology set forth in the company's operating agreement (the “Operating Agreement”). See Dkt. 117 at 15.

         Noah argues it is entitled to summary judgment for the following reasons:

1. Plaintiff's breach of contract claim for unreimbursed business expenses fails because he cannot prove he performed under any contract; he failed to comply with conditions precedent that would have triggered Noah's performance under any contract; he failed to follow Noah's policy regarding submission of business expenses; and he admits he does not know what his damages are, if any;
2. Plaintiff's quantum meruit claim fails because he cannot prove he provided services or materials to Noah for which he was not already compensated, and he admits he does not know what his damages are, if any;
3. Alternatively, even if fact issues exist as to Plaintiff' claims for business expenses, claims for expenses incurred prior to 2010 are barred by the applicable statutes of limitations;
4. Plaintiff cannot raise a genuine issue of material fact on his claim related to his Units because he failed to perform under the Operating Agreement; he cannot show Noah breached the Operating Agreement; and he admits he does not know what his damages are, if any; and
5. Plaintiff cannot establish a fraudulent transfer claim because he admits he has no evidence that Noah had the intent required by the applicable fraudulent transfer statute.

See Dkt. 117 at 12-23.

         In response, Plaintiff maintains he was told he need not submit his expense reports because customer visits were considered a higher priority by Noah (see Dkt 127 at ¶¶ 7, 13), and that Noah's expense submission policies were not conducive to reporting and accounting for Plaintiff's extensive business-related foreign travel on behalf of the company (see Dkt 127 at ¶¶ 11-14). Plaintiff also maintains that the redemption value Noah offered for his Units was insufficient. See id. at 15-17.

         The Court notes that Plaintiff's response raises other matters not relevant to his claims herein. For example, Plaintiff's claim that he was not paid his full salary (see Dkt. 127 at 6) is not an asserted claim in Plaintiff's lawsuit. See Dkt. 42. Plaintiff's Complaint asserts three (3) causes of action: (1) a breach of contract claim for business expenses and the redemption value of his Units; (2) a quantum meruit claim (alternative to his breach of contract claim) for his business expenses; and (3) a fraudulent transfer claim. Id. at 6-9. Therefore, Plaintiff has not timely asserted a claim for salary payments, and the Court will not consider it here. The Court will also not address any assertions by Plaintiff regarding the circumstances of his termination, as no employment-related claims have been asserted in this action.

         II. LEGAL STANDARD

         Summary judgment is appropriate when, viewing the evidence and all justifiable inferences in the light most favorable to the non-moving party, there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Hunt v. Cromartie, 526 U.S. 541, 549 (1999). The appropriate inquiry is “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986).

         When ruling on a motion for summary judgment, the court is required to 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). Further, a court “may not make credibility determinations or weigh the evidence” in ruling on a motion for summary judgment. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000); Anderson, 477 U.S. at 254-55.

         The party moving for summary judgment has the initial burden to prove there are no genuine issues of material fact for trial. Provident Life & Accident Ins. Co. v. Goel, 274 F.3d 984, 991 (5th Cir. 2001). In sustaining this burden, the movant must identify those portions of pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). The moving party, however, “need not negate the elements of the nonmovant's case.” Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc). The movant's burden is only to point out the absence of evidence supporting the nonmoving party's case. Stults v. Conoco, Inc., 76 F.3d 651, 655 (5th Cir. 1996).

         In response, the nonmovant's motion “may not rest upon mere allegations contained in the pleadings, but must set forth and support by summary judgment evidence specific facts showing the existence of a genuine issue for trial.” Ragas v. Tennessee Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998) (citing Anderson, 477 U.S. at 255-57). Once the moving party makes a properly supported motion for summary judgment, the nonmoving party must look beyond the pleadings and designate specific facts in the record to show there is a genuine issue for trial. Stults, 76 F.3d at 655. The citations to evidence must be specific, as the district court is not required to “scour the record” to determine whether the evidence raises a genuine issue of material fact. E.D. Tex. Local R. CV-56(d). Neither “conclusory allegations” nor “unsubstantiated assertions” will satisfy the nonmovant's burden. Stults, 76 F.3d at 655.

         III. EVIDENCE PRESENTED

         Defendant has submitted the following evidence in support of its summary judgment motion:

1) Exhibit A: Transcript from April 17, 2017 deposition of Plaintiff Brian Allen with the following deposition exhibits:
a) Exh. 3: Defendant Noah Precision LLC's Second Set of Interrogatories to Plaintiff Brian R. Allen;
b) Exh. 4: Plaintiff's Original Petition;
c) Exh. 5: Noah Precision LLC Employee Business Expense Report Policy;
d) Exh. 10: Email from Brian Allen dated April 18, 2012;
e) Exh. 11: Email from Brian Allen dated April 26, 2012;
f) Exh. 12: Email from Pete Adams dated April 26, 2012;
g) Exh. 13: Email from Brian Allen dated April 26, 2012;
h) Exh. 14: Email from Brian Allen dated April 27, 2012;
i) Exh. 15: Email from Brian Allen dated May 9, 2012;
j) Exh. 16: Email from Brian Allen dated June 5, 2012;
k) Exh. 17: Email from Brian Allen dated April 7, 2013;
l) Exh. 18: Email from Vince Calvo dated February 5, 2014;
m) Exh. 19: Email from Bruce Seifried dated February 5, 2014;
n) Exh. 20: Email from Brian Allen dated March 11, 2014;
o) Exh. 21: Email from Bruce Seifried dated July 15, 2014;
p) Exh. 22: Email from Brian Allen dated July 24, 2014;
q) Exh. 23: Email from Pete Adams dated July 24, 2014;
r) Exh. 24: Email from Brian Allen dated July 24, 2014;
s) Exh. 25: Email from Brian Allen dated July 27, 2014;
t) Exh. 26: Email from Brian Allen dated July 27, 2014;
u) Exh. 27: Email from Pete Adams dated July 28, 2014;
v) Exh. 28: Email from Pete Adams dated July ...

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