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Stanissis v. DynCorp International LLC

United States District Court, N.D. Texas, Dallas Division

August 2, 2017

ZANI STANISSIS, INDIVIDUALLY and AS REPRESENTATIVE OF THE ESTATE OF HER HUSBAND, CAVIN STANISSIS, et al., Plaintiffs,
v.
DYNCORP INTERNATIONAL LLC, et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          SIDNEY A. FITZWATER UNITED STATES DISTRICT JUDGE.

         In this action by, or on behalf of, several South African security workers seeking to recover on contract, fraud, and related theories for the denial disability benefits for employment performed in Iraq and Afghanistan, defendant DynCorp International LLC (“DynCorp”) moves to dismiss for failure to state a claim, for summary judgment, and to strike plaintiffs' summary judgment evidence or for related relief. For the reasons that follow, the court grants in part and denies in part the motions for summary judgment, denies the motion to strike, and denies the motion to dismiss as moot. Plaintiffs' breach of contract claims and the promissory estoppel claims of all but two plaintiffs remain for trial; the other claims are dismissed.

         I

         The court has issued several memorandum opinions and orders in this case, and the relevant background facts are set out in Stanissis v. DynCorp International LLC, 2015 WL 1931417, at *1-2 (N.D. Tex. Apr. 29, 2015) (Fitzwater, J.), Stanissis v. DynCorp International LLC, 2015 WL 9478184, at *1-2 (N.D. Tex. Dec. 29, 2015) (Fitzwater, J.) (“Stanissis II”), and Stanissis v. DynCorp International LLC, 2016 WL 4159397, at *1-2 (N.D. Tex. Aug 5, 2016) (Fitzwater, J.). The court will therefore limit its discussion of the facts to those that are relevant to this memorandum opinion and order.

         These are consolidated actions brought by plaintiffs Zani Stanissis (“Stanissis”), individually and as representative of the estate of her husband, Cavin Stanissis (“Cavin”), Leon Botha (“Botha”), Andre Cronje (“A. Cronje”), Johanna M. Cronje (“J. Cronje”), Jaco Botes (“Botes”), Henry Bredenkamp, Dean Capazorio, Gideon Delport (“Delport”), Stefanus Du Preez, Carel Fourie (“Fourie”), Gert Hitzeroth (“Hitzeroth”), Arnoldus Kieser (“A. Kieser”), George Kieser (“G. Kieser”), Catharina Louw (“Louw”), Gerard Merrick, Christiaan Oosthuizen (“Oosthuizen”), Hady'n Potgieter (“Potgieter”), Danie Rademeyer (“Rademeyer”), Chris Badenhorst (“Badenhorst”), Johann Steenberg (“Steenberg”), and Adriano Manuel (“Manuel”). Plaintiffs seek disability benefits that they maintain DynCorp promised them in exchange for undertaking employment as security workers in Iraq and Afghanistan.[1] Plaintiffs all signed employment contracts with DynCorp FZ International (“DynCorp FZ”), a separate company based in Dubai, which then leased the employees back to DynCorp.[2] They allege that DynCorp's promise was separate from any employment contract with DynCorp FZ, but the details of the promise were included in a document attached to their employment contracts with DynCorp FZ, entitled “Attachment A.” Plaintiffs contend that DynCorp never provided the benefits it promised, including disability benefits for mental illnesses such as post-traumatic stress disorder (“PTSD”).

         In the court's prior opinions, it considered DynCorp's and then-codefendant Midlands Claim Administrators, Inc.'s (“Midlands'”) motions to dismiss. The court dismissed all claims against Midland, and it dismissed all claims against DynCorp except for some plaintiffs' claims for fraud and fraudulent inducement, [3] breach of oral or implied contract, promissory estoppel, and breach of the duty of good faith and fair dealing. Plaintiffs' operative pleadings are their second amended complaint (“amended complaint”) and Manuel's first amended complaint (“amended complaint”).[4]

         Six motions are pending for decision: (1) DynCorp's motion to dismiss the fraud count of Manuel's amended complaint; (2) DynCorp's motion for summary judgment on the entire case; (3) DynCorp's motion for summary judgment on each cause of action; (4) DynCorp's motion for summary judgment on all claims of certain individual plaintiffs; (5) DynCorp's motion for partial summary judgment on damages as to the maximum amount of any potential disability benefits recovery, and plaintiffs' attorney's fees, extra-contractual damages, and punitive damages remedies; and (6) DynCorp's motion to strike plaintiffs' December 2016 declarations, or alternative reopening of discovery and requiring plaintiffs to file third amended complaint.[5] Plaintiffs oppose the motions.

         II

         DynCorp's summary judgment burden depends on whether it is addressing a claim or defense for which it will have the burden of proof at trial. To be entitled to summary judgment on a defense for which it will have the burden of proof, DynCorp “must establish ‘beyond peradventure all of the essential elements of the . . . defense.'” Bank One, Tex., N.A. v. Prudential Ins. Co. of Am., 878 F.Supp. 943, 962 (N.D. Tex. 1995) (Fitzwater, J.) (quoting Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986)). This means that DynCorp must demonstrate that there are no genuine and material fact disputes and that it is entitled to summary judgment as a matter of law. See Martin v. Alamo Cmty. Coll. Dist., 353 F.3d 409, 412 (5th Cir. 2003). “The court has noted that the ‘beyond peradventure' standard is ‘heavy.'” Carolina Cas. Ins. Co. v. Sowell, 603 F.Supp.2d 914, 923-24 (N.D. Tex. 2009) (Fitzwater, C.J.) (quoting Cont'l Cas. Co. v. St. Paul Fire & Marine Ins. Co., 2007 WL 2403656, at *10 (N.D. Tex. Aug. 23, 2007) (Fitzwater, J.)).

         When Dyncorp will not have the burden of proof at trial as to a claim, it need only point the court to the absence of evidence of any essential element of plaintiffs' claim. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once it does so, plaintiffs must go beyond their pleadings and designate specific facts demonstrating that there is a genuine issue for trial. See Id. at 324; Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc) (per curiam). An issue is genuine if the evidence is such that a reasonable jury could return a verdict for the party with the burden of proof. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Plaintiffs' failure to produce proof as to any essential element of a claim renders all other facts immaterial. TruGreen Landcare, L.L.C. v. Scott, 512 F.Supp.2d 613, 623 (N.D. Tex. 2007) (Fitzwater, J.). Summary judgment is mandatory where plaintiffs fail to meet this burden. Little, 37 F.3d at 1076.

         III

         The court turns initially to DynCorp's motion to strike plaintiffs' December 2016 declarations, or alternative reopening of discovery and requiring plaintiffs to file third amended complaint. DynCorp contends that plaintiffs' declarations are improper for two reasons: (1) they raise new legal claims and factual bases for legal theories, and (2) they are inconsistent with, and contradict, plaintiffs' deposition testimony and undisputed facts in the case, and are invented to create factual disputes to defeat summary judgment.

         The court can “disregard claims or theories of liability not present in the complaint and raised first in a motion opposing summary judgment.” De Franceschi v. BAC Home Loans Servicing, L.P., 477 Fed.Appx. 200, 204 (5th Cir. 2012). And the court in its discretion can disregard declarations submitted in response to a summary judgment motion that, without explanation, contradict prior testimony. Keller v. Coastal Bend Coll., 629 Fed.Appx. 596, 601 n.4 (5th Cir. 2015) (reviewing district court's exclusion of contradictory later statement for abuse of discretion). It is therefore unnecessary in the context of this lawsuit for the court to strike plaintiffs' declarations in toto; instead, if material to the court's decision on one of DynCorp's motions, the court will individually analyze whether plaintiffs are raising a new legal claim or factual basis for a legal theory, or are relying on declarations that are inconsistent with, and contradict, their deposition testimony and undisputed facts in the case. Nor is it necessary, given this approach, to reopen discovery or to require that plaintiffs file a third amended complaint.

         The court therefore denies DynCorp's motion to strike or reopen discovery and require plaintiffs to file a third amended complaint.

         IV

         The court next considers DynCorp's motion for summary judgment on the entire case.

         A

         DynCorp contends on three grounds that it is entitled to summary judgment as a matter of law on all of plaintiffs' claims: (1) DynCorp is not a party to the employment contracts and therefore is not liable for DynCorp FZ's promises; (2) the employment contracts contained integration clauses that disclaimed any other representations made about benefits outside of Attachment A, and DynCorp can enforce those terms as a third-party beneficiary; and (3) the offer letters contain similar integration clauses stating that each plaintiff did not rely on benefits descriptions in Attachment A in accepting employment. DynCorp's arguments rely on the assumption that “Plaintiffs' entire case is that [DynCorp] promised and did not later provide them the disability benefits described in . . . Attachment A[.]” D. 10/28/16 Br. 3 (ECF 147).[6]

         Plaintiffs maintain that any promise DynCorp made, although referenced in Attachment A, was completely separate from their employment contracts with DynCorp FZ. Plaintiffs posit that DynCorp “promised the $250, 000.00 in insurance benefits. This contract was separate and distinct from DynCorp FZ's conduct, which referenced $85, 000.00 in insurance benefits in its contract.” Ps. 12/9/16 Br. 3 (ECF 167). Plaintiffs counter that nothing in the employment contracts they executed with DynCorp FZ foreclosed any separate promise by DynCorp for benefits.

         The court agrees with plaintiffs. DynCorp cites no case law supporting the theory that plaintiffs cannot have entered into contracts for benefits with DynCorp that were separate from their employment agreements with DynCorp FZ. Therefore, it is not dispositive under plaintiffs' theory of the case that DynCorp is not a party to plaintiffs' employment contracts with DynCorp FZ.

         Nor is DynCorp entitled to summary judgment based on the integration clauses in the employment contracts and offer letters with DynCorp FZ.[7] Even assuming that such integration clauses could effectively bar plaintiffs' claims, DynCorp has not established that it is a third-party beneficiary of the contracts or letters.

Courts should presume that an agreement confers no third-party enforcement rights unless it clearly appears that the contract intends that the third party benefit, to the point of suing upon the contract. A contract does not confer third-party beneficiary rights unless (1) the contract plainly expresses the third-party obligation of the bargain-giver, (2) it is unmistakable that a benefit to the third party is within the contemplation of the primary contracting parties, and (3) the primary parties contemplate that the third party would be vested with the right to sue for enforcement of the contract.

Hudson v. Chartoni Inc., 2016 WL 828053, at *3 (Tex. App. Mar. 3, 2016, no pet.) (mem. op.) (citation omitted). DynCorp has not demonstrated that it can enforce the integration clauses in plaintiffs' employment contracts and offer letters with DynCorp FZ as a third-party beneficiary.

         Accordingly, the court denies summary judgment on the entire case on these three grounds.

         B

         DynCorp also maintains that plaintiffs have no evidence that any recruiter made promises of benefits before employment began, or that the recruiter was a DynCorp employee or agent.[8] DynCorp contends that this precludes recovery on all of plaintiffs' claims because each claim requires that plaintiffs establish that they relied on Attachment A in accepting employment.

         The court concludes that DynCorp has failed to shift the summary judgment burden on this issue because it does not point to a lack of evidence of an essential element of plaintiffs' claims. See Saunders Family Ventures, LLC v. Domestic Natural Res., LLC, 2017 WL 106794, at *8 (N.D. Tex. Jan. 11, 2017) (Fitzwater, J.) (holding that, where defendants failed to point to absence of evidence of any essential element of plaintiffs' breach of fiduciary duty claim, they failed to shift the burden to plaintiffs and were not entitled to summary judgment). Plaintiffs' claims rest on allegations that “[DynCorp] (specifically employee Jas Gil) promised [pre-2006 plaintiffs] that they would [be] covered for $125, 000.00 in disability benefits[, ]” Ps. 12/9/16 Br. 6 (ECF 167), and DynCorp “promised [post-2006 plaintiffs] $250, 000.00 in disability benefits[, ]” id. at 9. Plaintiffs do not allege that only recruiters promised benefits. It is thus entirely possible and consistent with the allegations of plaintiffs' amended complaint that, in addition to recruiters, someone else acting on DynCorp's behalf represented that employees would receive disability benefits. See, e.g., Am. Compl. ¶¶ 28 & 29 (ECF 52) (alleging that when plaintiff Botha arrived in Baghdad in October 2004 and signed documents, including employment agreement, his benefits were explained to him by Human Resources Manager Sonja Edwards; that in 2005 DynCorp Director Jas Gill (“Gill”) also explained the benefits to Botha at a meeting in Baghdad; that Botha's benefits were explained to him by his team leader Rick Bonus and PSD Commander Garry Lawrence; and that in December 2006 DynCorp again represented to Botha that he would receive personal accident benefits under Attachment A if he suffered an on-the-job injury; and alleging that “before accepting his employment offer, [Botha] was promised personal accident benefits by [DynCorp], described in attachment ‘A.' [DynCorp's] representatives told Botha that he was covered for disability claims for personal injury accidents, and that he would receive both workers' compensation and personal accident insurance if he was injured on-the-job, ” id. at ¶ 29.).

         Because DynCorp has not established that it is entitled to summary judgment on plaintiffs' entire case, the court denies the motion and proceeds to consider DynCorp's remaining motions.

         V

         The court next considers DynCorp's motion for summary judgment on all claims of certain individual plaintiffs.

         A

         DynCorp first contends that nine plaintiffs' claims fail because they testified in their depositions that they had not seen or did not recall seeing Attachment A.[9] At least as to the two claims that remain following today's decision-breach of contract and promissory estoppel-the court disagrees.

         Plaintiffs' breach of contract claim rests on the premise that plaintiffs and DynCorp entered into implied or oral contracts. See Am. Compl. ¶ 209 (ECF 52) (“While this contract was not a written agreement, an implied or verbal contract existed between the Plaintiffs and DynCorp[.]”). Attachment A is alleged to set out the benefits to which plaintiffs are entitled. See, e.g., Id. at ¶ 8. But plaintiffs need not have actually seen Attachment A to prevail on their contract claims because they are not relying on it as the contract with DynCorp but instead to prove that they entered into implied or oral contracts with DynCorp. See Ps. 12/9/16 Br. 15 (ECF 167) (“But importantly, Attachment A only provides evidence of the implied contract with DynCorp International. Attachment A is not the actual agreement between Plaintiff[s] and DynCorp International.” (bold font omitted)).

         Nor do plaintiffs' promissory estoppel claims fail on this basis. Plaintiffs rely for these claims on the premise that “Defendant [DynCorp] (and its agents) promised benefits to Plaintiffs in exchange for their work overseas.” Am. Compl. ¶ 216 (ECF 52). A plaintiff need not have actually seen Attachment A if DynCorp represented orally the benefits that Attachment A conferred. And plaintiffs have introduced evidence that it did. See, e.g., Ps. 12/9/16 App. 5 (ECF 167) (Badenhorst declaration) (averring that it was his “understanding from the verbal statements and conduct of [DynCorp] that the terms of the insurance that was allegedly secured by [DynCorp] mirrored those outlined in the May 12, 2003 Attachment A benefits summary.”).

         DynCorp's motion is therefore denied on this ground.

         B

         DynCorp next contends that Stanissis' claims on behalf of her husband Cavin for breach of contract, promissory estoppel, and breach of the duty of good faith and fair dealing fail because (1) she has insufficient evidence to support her claims, and (2) she does not have standing on his behalf. The court will consider the standing argument here; it will defer consideration of DynCorp's argument regarding the sufficiency of Stanissis' evidence for each of her three claims when it discusses the claims below.

         Although DynCorp and Stanissis both discuss whether Stanissis has standing to bring her suit, the question is one of capacity to sue rather than standing. “The issue of standing focuses on whether a party has a sufficient relationship with the lawsuit so as to have a ‘justiciable interest' in its outcome, whereas the issue of capacity ‘is conceived of as a procedural issue dealing with the personal qualifications of a party to litigate.'” Austin Nursing Ctr., Inc. v. Lovato, 171 S.W.3d 845, 848 (Tex. 2005) (citing Charles Alan Wright,, Federal Practice and Procedure § 1559, at 441 (2d ed. 1990)). Whether someone may bring suit on an estate's behalf is a question of the individual's “capacity to bring a survival claim.” Id. at 850. The court will therefore construe the parties' arguments as relating to whether Stanissis has the capacity to sue.

         In the amended complaint, plaintiffs allege that Stanissis has capacity to sue under Tex. Civ. Prac. & Rem. Code Ann. §§ 71.004 and 71.021 (West 2017), and Texas common law. But § 71.004 addresses wrongful death actions, and § 71.021 pertains to personal injury claims, neither of which is relevant to plaintiffs' claims. Stanissis must therefore rely on Texas common law to establish her capacity to sue.

         “[U]nder the common law, actions for breach of contract . . . survive[] the death of either party.” Launius v. Allstate Ins. Co., 2007 WL 1135347, at *4 (N.D. Tex. Apr. 17, 2007) (Boyle, J.) (citing Thomes v. Porter, 761 S.W.2d 592, 594 (Tex. App. 1988, no writ)). This is because “the basic rule under the common law [was] that actions primarily affecting property and property rights survived the death of the aggrieved party whereas actions asserting purely personal rights did not.” Id. It follows that other actions sounding in contract, such as promissory estoppel, survive the death of either party. See id.

         The general rule under Texas law is that an estate administrator has the exclusive capacity to sue for recovery of estate property. Kenseth v. Dall. Cnty., 126 S.W.3d 584, 595 (Tex. App. 2004, pet. denied) (citing Frazier v. Wynn, 472 S.W.2d 750, 752 (Tex. 1971)). When no administration is pending or necessary, an heir may sue on the decedent's behalf. Frazier, 472 S.W.2d at 752. Heirs have capacity to sue “if they allege and prove that there is no administration pending and that none is necessary.” McPeak-Torres v. Brazoria Cnty., 2014 WL 12591850, at *4 (S.D. Tex. Nov. 5, 2014) (emphasis omitted), rec. adopted, 2015 WL 12748276, at *3 (S.D. Tex. Jan. 22, 2015).

         DynCorp contends that Stanissis cannot establish standing to sue because she concedes in response that she did not have standing when the lawsuit was filed. As DynCorp correctly notes, standing must be established at the time suit is filed and cannot be cured. See, e.g., Lewis v. Ascension Parish Sch. Bd, 662 F.3d 343, 347 (5th Cir. 2011) (per curiam). But as the court explains above, the issue here is capacity, not standing, to sue. And “[u]nlike standing . . . capacity to sue can be cured.” Id. (quoting Fed.R.Civ.P. 17(c)). In Lovato, for example, the plaintiff lacked capacity to sue when she initially filed suit because the limitations period for the estate to sue had not expired. Lovato, 171 S.W.3d at 852. But the limitations period elapsed while the suit was pending, and the plaintiff gained capacity to sue. Id. The Supreme Court of Texas held that the plaintiff's newfound capacity after filing suit cured the defect in capacity. Id.

         Here, Stanissis declared that Cavin's estate closed in 2014, and all of the estate's debts were resolved. Whether the estate was closed when she filed the suit is immaterial. See Id. Stanissis has proved that there is no administration pending and no need for future administration. See, e.g., McPeak-Torres, 2014 WL 12591850, at *3 . The court therefore concludes that she has established her capacity to sue.

         C

         DynCorp next challenges all of Badenhorst's claims as time-barred based on deposition testimony that DynCorp alleges shows his claims accrued in 2009.[10]

         1

         “As a general rule, a cause of action accrues and the statute of limitations begins to run when facts come into existence that authorize a party to seek a judicial remedy.” Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 221 (Tex. 2003) (citing Johnson & Higgins of Tex., Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 514 (Tex. 1998)). “In most cases, a cause of action accrues when a wrongful act causes a legal injury, regardless of when the plaintiff learns of that injury or if all resulting damages have yet to occur.” Id. (citing S.V. v. R.V., 933 S.W.2d 1, 4 (Tex. 1996)).

         “A cause of action for breach of contract generally accrues when the contract is breached.” TIB-The Indep. BankersBank v. Canyon Cmty. Bank, 13 F.Supp.3d 661, 668 (N.D. Tex. 2014) (Fitzwater, C.J.) (citing Stine v. Stewart, 80 S.W.3d 586, 592 (Tex. 2002)). A cause of action for promissory estoppel “accrues at the time the promisor breaches its promise to the promisee.” Bloom v. Burkholder Corp., 1995 WL 379272, at *3 (Tex. App. May 30, 1995, no pet.) (not designated) (citing Wheele ...


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